Australia will fund new undersea telecommunications cables for Solomon Islands, provide a $600 million (US$397 million) bailout for Papua New Guinea and spend $400 million (US$264 million) to expand diplomatic posts in the Pacific in the contest with China for regional influence.
In the budget announced on Tuesday, the Department of Foreign Affairs will also get $188 million (US$124 million) to upgrade communications and security to protect its Canberra headquarters and network of foreign posts from cyber threats, and $40 million (US$26 million) more over two years to urgently carry out repairs and renovations at embassies.
DFAT’s annual budget will jump to $8.9 billion (US$5.89 billion), while the number of diplomats will rise by 324 to 6949. Foreign aid will rise almost $180 million (US$119 million) to $4.2 billion (US$2.78 billion) in 2024-25.
Amid China’s concerted campaign to woo Indo-Pacific nations with economic and security agreements, the Albanese government is responding with more than $1 billion (US$662 million) in loans and funding covering the Pacific.
As the antagonistic Solomon Islands leader Manasseh Sogavare relinquishes his grip on power, Canberra will provide a package through its Australian Infrastructure Financing Facility for the Pacific for telecommunications infrastructure.
The project will link islands with undersea cables, although the Albanese government has not published what it will cost to avoid disclosing individual financing arrangements with third parties.
The government will spend $206.5 million (US$136.7 million) over four years, and $6.9 million (US$4.57 million) annually thereafter, to enhance Australia’s Pacific presence.
This includes $160.4 million (US$106.25 million) between 2024-25 and 2027-28, and $237.3 million (US$57.20 million) from 2028-29 to 2033-34 to “rightsize” Australia’s overseas posts, many of which have been outgrown or no longer meet workplace health and safety requirements.
The main beneficiary is the high commission in Suva, Fiji which will be expanded to accommodate extra diplomats, federal police officers and defence personnel.
Another $40 million (US$26 million) will be spent to expand and relocate the Australian consulate general chancery in Honolulu. The government will also spend $5.5 million (US$3.64 million) to extend for one more year the Australian Federal Police presence the Solomon Islands. The AFP was deployed in late 2021 following anti-government riots.
The budget papers also revealed the size of the loan to Papua New Guinea’s government to help plug its budget shortfall. The loan was alluded to when PNG Prime Minister James Marape visited Canberra in February, but its size was not mentioned. It follows a $650 million (US$430.62) loan in 2021 to assist Port Moresby with a COVID-induced budget troubles.
On South-East Asian engagement, the government has bundled up a number of initiatives linked to former Macquarie Bank chief Nicholas Moore’s 2040 economic strategy and the ASEAN Special Summit in Melbourne, totalling $505.9 million ($335.13million over five years.
However, the stabilisation of relations with China will see $10.1 million (US$6.69 million) spent on tourism and trade promotion. The government has reinstated funding now worth $8.1 million (US$5.36 million) over four years to ensure Chinese tour groups visiting Australia deal with high-quality and reputable providers.
A one-off $2 million (US$1.3 million) will be spent helping agricultural exporters re-establish markets in China after Beijing lifted trade restrictions on commodities such as wine.
