THE Department of Foreign Affairs and Trade faces a $109million budget cut at the very time Kevin Rudd sees a more prominent role for Australia on the world stage.
The cuts promise to undermine the Prime Minister's new ``soft power'' diplomatic strategy, proclaimed during his current world trip.
The budget cuts will generate additional staff cuts on top of the 19 redundancies in overseas posts announced earlier this year.
Last month, Mr Rudd said the federal Government intended to prosecute an ``active, creative middle-power diplomacy in partnership with the community of nations''.
``The truth is that Australia has been too quiet for too long across the various councils of the world,'' Mr Rudd said.
``That is why during the course of the next three years the world will see an increasingly activist Australian international policy.''
The expenditure review committee has cut by $32 million additional budget support committed by the Howard government to meet DFAT's normal administrative expenses.
The special 2 per cent efficiency dividend ordered by the Government's razor gang will now deliver another $50 million in savings over the forward estimates period to 2011.
DFAT sources argue the impact of the special dividend has a disproportionate impact, in that the department does not administer any spending programs and any cuts impact squarely on the diplomatic corps.
DFAT has a total staff of 2165, of which only 548 are diplomats serving overseas. The Government has ruled out post closures but has already flagged a range of new diplomatic initiatives, including a reinvigorated Pacific strategy and a bid for a seat on the UN Security Council.
The department has endured a 25 per cent cut in overall staff numbers since 1996. This compares with civilian numbers in the Defence Department which have grown by almost 20 per cent since 2000.
In comparison with every other government department dealing with Australia's foreign relations, DFAT has fared badly over the past decade.
Since 2001, Defence spending has increased by more than 55per cent to $22 billion while the budgets of all the key security agencies, including ASIO, AFP, ASIS and ONA, have more than doubled.
By contrast, DFAT's budget has been increased in actual dollars by only 18 per cent over the same period, from $660million in 2001-02 to $777 million in 2007-08 -- an estimated 10 per cent cut in real terms.
The Government has already axed the ``Australia on the World Stage'' fund, which will deliver $19 million in savings, and trimmed spending on the Australia-China Free Trade Agreement negotiations ($6million).
Opposition finance spokesman Peter Dutton said the Government had locked itself into a tightening of fiscal policy, which placed a question mark over the ability of departments to maintain high levels of efficiency and professionalism.
Liberal senator and foreign affairs expert Russell Trood told The Australian DFAT's budget remained far less than the $1billion-a-year savings now being sought from Defence.
``The consequences of these severe cutbacks in DFAT is to emasculate the Australian foreign service at a time when the global challenges are increasing,'' Senator Trood said.
Source: The Australian