Australia to fund $100M in aid to Indo-pacific region

Australia is shifting over $100 million in foreign aid to support the Indo-Pacific, following Trump’s massive US aid cuts.

With the US pulling the plug on around $54 billion in overseas development funding, Australia is stepping in to fill some of the gaps—especially in neighboring regions facing economic, health, and climate challenges.

What’s changing?

Australia’s official development assistance (ODA) budget will hit $5.1 billion in 2025-26, an increase of $135.9 million from this year. However, $119 million is being reprioritised to focus on urgent needs in Pacific and Southeast Asia.

Foreign Affairs Minister Penny Wong said these were “hard strategic decisions”, especially after Trump’s administration decided to pause US foreign aid and later slash the budget.

Who’s getting less funding?

Three major institutions are seeing cuts:

• Global Partnership for Education and the Global Fund to Fight HIV, Malaria, and TB → Reduced to $16.4 million

• UN Development Program → Losing $13 million in core funding (but Australia is still contributing $189.5 million to UN agencies overall)

Where is the money going?

• Indo-Pacific region → Three-quarters of the aid budget will focus here

• $1 billion over five years → Building economic resilience

• $370 million over three years → Humanitarian aid for Myanmar, where US cuts have led to food shortages

• Health funding → Essential services for HIV and tuberculosis

• Climate action → Helping the region cope with extreme weather events

Why does this matter?

Wong emphasized that Australia’s development program is key to regional stability.

“In these uncertain times, we’re making sure more of our aid goes to the Pacific and Southeast Asia, where Australia’s interests are most at stake,” she said.

But not everyone is on board. Opposition leader Peter Dutton hasn’t ruled out cutting foreign aid—something that’s sparked internal debate among Liberal backbenchers. Many are pushing back, warning against slashing aid to fund big-ticket defense projects.

What do experts say?

Tim Costello, head of Christian aid group Micah, welcomed Australia’s aid shift but warned that Trump’s decision could cost millions of lives.

“With USAid being absolutely smashed by Elon Musk and Donald Trump … some millions of people are going to die. That’s not metaphorical.”

The Australian Council for International Development also stressed the importance of maintaining aid funding, arguing that any cuts would have immediate humanitarian and diplomatic consequences—not to mention, allow other countries to increase their influence in the region.

The US aid cuts at a glance

• Trump paused all foreign aid in January for a 90-day review

• Marco Rubio (US Secretary of State) announced in March that 83% of USAid programs will be canceled

• That means $54 billion in funding gone

Australia’s response?

Wong immediately asked the Foreign Affairs Department to assess the fallout and identify programs needing urgent funding.

Already, $5 million has been allocated to keep HIV programs running in PNG, Fiji, and the Philippines—which were at risk after US cuts.

Australia is stepping up, but the global aid landscape is shifting dramatically. With the US pulling back, there’s growing pressure on other nations to fill the void—especially in regions like the Pacific and Southeast Asia, where stability and security are at stake.