The Australian government’s foreign aid handouts to other countries are at their highest level in a decade, yet one thinktank says the amount should be greatly increased.
Treasurer Jim Chalmers revealed in the March budget that Australia’s official development assistance – the money it sends to foreign nations – would exceed the $5billion mark for the first time in ten years.
Much of that funding went to nations in the Indo-Pacific, as the government attempts to counter China‘s growing influence in the region.
Foreign Minister Penny Wong said at the time that increase in funding was designed to ‘central to ensuring stability and security of our region’.
‘In these uncertain times, we are making sure Australia’s development assistance is going to the Pacific and Southeast Asia, where Australia’s interests are most at stake,’ she added.
The $2.2billion of taxpayer money given to neighbouring countries is intended to support infrastructure, connectivity, tourism, trade, banking and labour mobility.
Papua New Guinea was the largest single recipient, with $707 million in aid slated for 2025/26, not counting the $600million it will receive over ten years for a team to join the National Rugby League.
Indonesia, which has over ten times Australia’s population, is to receive $351.4million.
Three-quarters of Australia’s overseas aid funding – $2.2billion – went to nations in the Indo-Pacific, as the government attempts to counter China ‘s growing influence in the region (pictured: Prime Minister Anthony Albanese at the Pacific Islands Forum in 2023)
Prime Minister Anthony Albanese was keen to strengthen the relationship with Indonesia when he travelled to Jakarta on his first official visit since being re-elected on May 3.
This keenness was underlined when Indonesian President Prabowo Subianto rang Albanese to congratulate him on his landslide victory.
‘I have a request for you, and I want you to say yes,’ Albanese told his counterpart.
‘I want Indonesia to be my first visit. Not Washington, not Beijing, not anywhere else.’
The Solomon Islands came third with just shy of $171million, Timor-Leste fourth with almost $136million and the Philippines fifth with $124.8million.
Despite the $135.8million increase in overseas aid in the last financial year, Lowy Institute Research Associate Grace Stanhope has called on the Albanese administration to do more.
‘Currently, Australia spends 0.18 per cent of gross national income on aid – barely a quarter of the OECD (Organisation for Economic Co-operation and Development) target of 0.7 per cent,’ Ms Stanhope wrote for The Interpreter.
She added: ‘Ultimately, there’s no escaping that Australia’s aid budget is too low, threatening Australia’s standing as a global citizen.’
Prime Minister Anthony Albanese was keen to strengthen the relationship with Indonesia when he travelled to Jakarta on his first official visit since being re-elected on May 3 (pictured: the PM inspects a guard of honour with Indonesian President Prabowo Subianto)
Just 0.65 per cent of federal government spending currently goes on overseas aid.
Australia’s generosity has decreased over time.
For example, in 2015 Australia was ranked the 14th most generous country in terms of overseas aid, contributing around 0.29 per cent of gross national income (GNI),
Whereas in 2024, its ranking had slipped to 18th, with just 0.19 per cent of GNI going towards overseas aid, according to the Australian Aid Tracker.
This situation is unlikely to improve any time soon, as Ms Stanhope notes ‘there is little political appetite to meaningfully scale up’ overseas aid spending.
‘Labor’s first term promise of an aid program rebuild went largely unmet,’ she added.
This is against a global backdrop that has seen countries such as the US, UK, France and Germany all drastically reduce their overseas development assistance.
Many Australians were frustrated about billions of dollars being sent overseas while the country faces its own challenges.
‘How about aiding Australia first,’ one said on social media.
‘I find it funny that not one politician has asked me if they can use my money to send overseas after all it has come from my pay packet,’ a second added.
‘Five billion he could spend on electricity bills for his own people,’ another said.
‘Imagine if that was added to our defence budget – to buy more defence capability, to defend Australia perhaps,’ a third said.
Despite sending money overseas, Australia does not receive foreign aid from other countries.
‘So we’re nearly a trillion dollars in debt and giving five billion overseas, does that mean we borrow money to give it away,’ one said.
‘Five billion would stop ramping at hospitals, aid out flood and drought victims, reduce our national debt, build amazing infrastructure for Australia,’ a second said.
