Australia will redirect over $100 million in foreign aid towards the Indo-Pacific region in order to urgently fill funding gaps following the decision by Donald Trump to cancel approximately $US54 billion worth of overseas development assistance programs.
The official development assistance (ODA) budget for 2025-26 will reach $5.1 billion, an increase of $135.9 million from 2024-25. However, $119 million will be reprioritized to support economic, health, humanitarian, and climate responses in neighboring regions.
Foreign Affairs Minister Penny Wong stated that difficult strategic choices had to be made in response to the Trump administration’s decision to pause US foreign aid funding pending a review. The funding for three institutions will be affected during the 2025-26 financial year, with reduced payments to the Global Partnership for Education and the Global Fund to Fight HIV, Malaria, and TB.
Australia will also provide $13 million less in its core funding contributions to the UN Development Programme. However, the government will still provide $189.5 million to UN agencies over 2025-26. Three-quarters of the ODA budget for the year will go towards the Indo-Pacific region, with $1 billion over five years aimed at building economic resilience.
A $370 million package over three years will be provided to address the humanitarian crisis in Myanmar, as USAid cuts have resulted in food shortages. Other assistance will be given to regional health resilience for HIV and tuberculosis and to support climate action in the face of climate-related shocks.
Wong emphasizes the importance of the foreign development program in ensuring the stability and security of the region. In uncertain times, more of Australia’s development assistance will be directed towards the Pacific and Southeast Asia, where Australia’s interests are most at stake.
The news has been welcomed by aid experts, with Tim Costello, the national director of Christian aid advocacy group Micah, stating that aid saves lives and urging the Coalition to back the commitment.
The Australian Council for International Development, the peak body for aid and humanitarian bodies, has also welcomed the extra funding and reprioritization, emphasizing that any reduction in aid will have humanitarian and diplomatic costs and allow other nations to expand their influence in the region.
Trump ordered a 90-day pause in January to foreign aid programs to undertake a review of their effectiveness. Marco Rubio, the US Secretary of State, later announced the cancellation of 83% of USAid programs, totaling around $US 54 billion in assistance.
Wong requested the foreign affairs department to assess the impact of Trump’s announcements and determine which programs needed immediate funding. An additional $5 million was provided in 2024-25 to maintain HIV programs in PNG, Fiji, and the Philippines after the US announcement.
Source: https://www.theguardian.com/australia-news/2025/mar/26/australia-to-redirect-100m-in-foreign-aid-to-indo-pacific-region-after-trump-pulls-aid-funding
