More details on New Zealand aid from the 2021/22 budget

Welcome to my promised second email on the New Zealand government’s aid budget. I’ve had more time to look at numbers, more time to struggle with spreadsheets, and more time to think about issues with the data. Here’s what I’ve found. Note first though that:

(1) I’ve made a data pack, which you can download, that shows source data and workings and more details.
(2) I was wrong in my last email to emphasise the importance of Cook Islands. It’s one of our larger aid recipients, and it is no longer eligible for ODA (as per OECD rules), but it doesn’t get enough New Zealand aid to change the high-level figures much. And so, for simplicity’s sake, all numbers in this newsletter include aid to the Cooks. (In the data pack l show what happens with it removed if you’re interested.)
(3) Government aid reporting is not nearly transparent enough. This is a broader issue. For now though, one consequence is that I have had to make estimates at times. You can read details in the data pack. The estimates will be off, no doubt, but they will not change the big picture much.

Future aid flows, and inflation adjusted aid
This chart shows you projected New Zealand aid (based on my estimates) until the end of the current triennial aid spend. The chart also shows you inflation adjusted aid figures (using Treasury data on past inflation and predicted future inflation).

As you can see from the orange line in the chart, with inflation taken into account, aid will fall in the coming financial year. It will grow, but only ever so slightly, in the following two financial years.

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What happened to aid in Budget 2021/22

What news did budget 2021/22 bring for New Zealand aid? It’s a good question, and it is also a frustratingly hard one to answer. As with last year, there was no Vote ODA in today’s budget, making it harder to work out the total aid spend. Worse than last year, there’s no annual information on aid spending for this triennium. All that’s available is information for the coming financial year, plus some lump sum totals which are not very easy to work with.

Still, here’s what we know thus far.

Aid is set to increase slightly in the coming financial year

Aid increased nearly 11% in the current financial year, but that is primarily making up for an under-spend in the financial year prior to that. Next year aid is budgeted to increase by just 0.7%. (None of the calculations in this email take into account inflation; if they did the slight increase would likely be a slight fall.)

New Zealand aid over time (nominal, million NZD)

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