Australia to inject $135.9m more on foreign aid after Trump Administration creates massive Indo-Pacific vacuum

Australia will spend an extra $135.87 million on foreign assistance in the next year, as part of an attempt to cushion the blow of the United States withdrawing billions of dollars’ worth of aid from the Indo-Pacific.

The total spend of the Official Development Assistance will reach $5.1 billion, but the investment falls short of calls for foreign aid to grow to one per cent of total budget expenditure, and for the gap between defence spending and assistance to narrow.

Money will also be reprioritised within the program to focus on Southeast Asia and the Pacific, amid fears the US’ decision would create a vacuum that China would seek to plug.

Foreign Affairs Minister Penny Wong said Australia had a central role to play in ensuring the stability and security of the region.

“In these uncertain times, we are ensuring more of Australia’s development assistance is going to the Pacific and Southeast Asia, where Australia’s interests are most at stake,” she said.

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

She said Australia’s reprioritised aid spend would be targeted at ensuring economic resilience, delivering essential health services, and climate action in the Pacific and Southeast Asia.

Secretary of State Marco Rubio confirmed earlier this month that the US would scrap 83 per cent of its USAID programs, equivalent to about USD$54 billion worth of development assistance. The remainder of the US development budget is now heavily concentrated in the Middle East and Eastern Africa.

It’s understood that DFAT, at Senator Wong’s direction, carried out an assessment of regional impacts. Experts had warned America’s withdrawal from Southeast Asia and the Pacific would be fortuitous for China.

The United Kingdom has also wound back its foreign aid spending to fund a significant ramp up of defence expenditures. This had little impact in the Indo-Pacific and Southeast Asia.

But Tim Costello, from the Safer World for All campaign, said Australia was failing its neighbours in not making a greater investment to foreign aid.

He said there needed to be a plan to lift spending to one per cent of budget expenditure – beyond the 0.64 per cent being spent next financial year – and it was even more crucial because of the US’ retreat and China’s attempts to grow influence in the region.

“What has been happening globally is the turning inwards with the fear that says we have to bolster our defence. That is false security, and it’s already costing lives,” he said from Parliament House on Tuesday morning before the budget.

“The US Government does not have an aid program, but China does.

“This is a moment for Australia as a middle power to show where our true security lies.”

He said Australia currently spends $1 on aid to every $10 on defence, which was lower than in the Cold War when the ratio was $1 to every $8.

To prioritise Australia’s backyard, $119 million in funding has been reprioritised from other aid programs, including the Global Partnership for Education and part of the payments to the Global Fund to fight HIV, malaria and TB.

Australia will not make a $13m core funding contribution to the UN Development Program this financial year and will also delay planned increases to some other development programs.