Murray McCully

Wellington, June 9 NZPA - Labour says a $900,000 funding cut for non-government organisations (NGOs) that manage overseas aid undermines their ability to do an effective job but Foreign Minister Murray McCully is rejecting criticism.

Labour's associate foreign affairs spokesman, Phil Twyford, said today the funding cut had hit the NGOs umbrella group, the Council for International Development (CID), which had more than 100 members including World Vision, Save the Children Fund, Oxfam and others.

The result was that 10 out of a total of 11 staff had been laid off, Mr Twyford said.

"The minister says he is committed to NGOs but he slashes their funding.

"He says he believes in accountability for aid funds but he has just shut down an operation specifically designed to improve accountability," he said.

Mr McCully said he signalled last year the CID's funding would be reduced and it had been worked through "in a careful and considered manner".

"Every dollar spent on aid bureaucracy is a dollar less for projects to help the poor in the developing world," he said.

"Results on the ground are what counts, not administration arrangements in Wellington."

Mr McCully said the Government planned to make more funding available for NGO partnerships in developing countries.

"Details are being finalised but a substantial increase in the allocation for aid NGO partnerships is an absolute certainty next financial year," he said.

"Agreement has recently been reached with CID on services to be purchased by the ministry in the future. This will include helping co-ordinate New Zealand aid NGOs, including on emergency and disaster relief."