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Doubling of aid budget carries risks: Treasury

BY ILYA GRIDNEFF

AAP - A projected doubling of Australia's aid budget to nearly $9 billion over the next five years could become counterproductive and fail to deliver to the world's most needy, according to Australian Treasury officials.

The federal opposition seized on the warning as further evidence that an unchecked Foreign Affairs Minister Kevin Rudd, who last week was spruiking Australia's benevolence to the United Nations, will only accelerate the program's failure.

Deputy opposition leader and foreign affairs spokeswoman, Julie Bishop, told AAP the coalition would "ferociously" scrutinise Mr Rudd's handling of aid.

Ms Bishop said the massive aid budget now warranted a new ministry with a specific minster for international development.

"Instead the government has not replaced the parliamentary secretary on international development and allowed Kevin Rudd to take over completely," she said.

Mr Rudd's spokeswoman said his “direct engagement with AusAID and the aid program reflects the priority that the government attaches to the aid program".

But Australia's Treasury government brief, known as the `red book,' warns that more aid money means more problems.

"There is a risk that the increase in the budget, if not handled well, will result in less effective delivery and public criticism of the aid program,” it says.

"Aid and other development policies will require close scrutiny to ensure they meet basic value for money metric.

"Close monitoring of the developments in the Pacific is important, along with assessing the effectiveness of existing assistance strategies".

Last November an Australian National Audit Office report found "AusAID faces considerable management challenges amidst ongoing program growth".

The report stated Australia had "a tendency to rely too much" on technical assistance, which was about 46% of AusAID budgets, twice hat of other comparable countries.

Last year AAP reported that numerous advisers offering technical assistance in the Pacific earned more than the PM's base salary of $335,000.

One adviser in Papua New Guinea is on more than a million dollars tax free for two years while a transport adviser in Vanuatu, overseeing locals fixing potholes on 73km of paved road, costs Australian taxpayers $865,000.

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