Australia takes on role of Pacific region’s biggest donor

By Wendellyn Mateo

Australia is taking on the role of being the Pacific region’s biggest donor after its Labor government unveiled its latest budget last week.  

The annual Pacific Aid Map released by the Lowy Institute in 2024 revealed Australia overtook China and the United States to become the largest donor in the region.

The latest budget, which will directly allocate AU$2.157 billion to Pacific Island nations, will increase Canberra’s overall contribution to the region to double that of a decade ago and account for about 42 per cent of the region’s total aid.

The timing couldn’t have been better, with the United States announcing foreign aid cuts under the new administration of President Donald Trump.  

Fund bumps for the Pacific, Southeast Asia  

About AU$5.1 billion ($3.2 billion) has been set aside for Canberra’s official development assistance, up from the AU$135.9 million in the 2024-25 budget.

According to The Guardian, nearly AU$119 million will be utilised to support economic, health, humanitarian, and climate responses in neighbouring regions. 

Among the nations to benefit, the Federated States of Micronesia and Tonga will receive the largest aid increases.  

Tonga in particular will secure AU$85 million over the next four years to support its economy – part of a broader AU$296 million package that seeks to assist Pacific Island nations in responding to economic setbacks while bolstering resilience.  

Climate resilience projects will be a key priority, with AU$355 million to be provided over four years in Pacific and Southeast Asian nations.  

Included in the budget as well is Myanmar, where Australia will inject AU$370 million over three years to tackle the humanitarian crisis there.  

READ MORE: Global community responds to deadly earthquake in Myanmar

Concerns rise amid ‘uncertain times’

Foreign Minister Penny Wong said the aid was going to “where Australia’s interests are most at stake” in the Pacific and Southeast Asia, citing “uncertain times”.

“We’ve had to make hard strategic decisions and focus on where our development assistance can have the greatest impact.”

Since President Trump froze nearly all foreign aid in an executive order in January, concerns have mounted across the Pacific region regarding the impact on health programmes like those dealing with tuberculosis (TB) and HIV.

Cameron Hill, a senior research officer at The Australian National University’s Development Policy Centre, said at a panel on the budget’s aid component that the US move might affect TB and HIV programmes in Papua New Guinea and Fiji. 

“That is an area where I think the government is concentrating some effort and also some civil society programmes in the Pacific …  which aren’t big in dollar terms, but the US has traditionally played a big role in those,” he was quoted as saying by BenarNews.  

For interim chief executive officer of the Australian Council for International Development (ACFID), Matthew Maury, the budget sent “a clear signal” that Canberra was not retreating from the Pacific region. 

However, Maury in a report from the Australian Broadcasting Corporation said the aid still dropped to its “lowest level ever”.

“While holding the line is commendable and we welcome the initial steps to fill the gap in this budget, ACFID looks to further commitments that meet the escalating needs across the world,” Maury added.

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