Policy Updates

On February 8, 2024, Prime Minister of Papua New Guinea James Marape visited Australia for the 5^th Papua New Guinea – Australia Annual Leaders’ Dialogue to meet with Australian Prime Minister Anthony Albanese and discuss, amongst other topics, ODA issues.

Papua New Guinea is the largest recipient of Australian ODA. The two prime ministers discussed Papua New Guinea’s budget repair plans and fiscal situation, with Marape welcoming budget support from Australia to assist with budget shortfalls. Marape also addressed Australia’s parliament during his visit.

They noted the importance of continued support for agriculture to improve supply and quality, especially to provide continued support for women. Marape and Albanese also discussed Australia’s assistance to Papua New Guinea’s national road network and 30-year master plan for port rehabilitation.

The leaders pledged to act in response to Papua New Guinea’s need for more reliable green energy. Australia has provided US$150 million to upgrade and repair major energy assets, including refurbishing the Ramu 1 hydroelectric power station.

Marape also noted Australia’s assistance in completing new solar farms in Bougainville and West Sepik, Papua New Guinea. Separately, small energy projects in Papua New Guinea are being funded by Australia through the Pacific Climate Infrastructure Financing Partnership. Australian ODA has also been provided to improve education and support health services aimed at tuberculosis and malaria, as well as MNCH.

In May 2023, the Australian National University’s Development Policy Centre announced the dates of its annual series of conferences focusing on development, particularly in the Pacific region.

The 2023 Pacific was scheduled for June 13-14, 2023 in Fiji. It is co-hosted with the University of the South Pacific’s School of Accounting, Finance and Economics. The Update conference is a major forum for discussing economic, political, social, and environmental issues in the South Pacific.

The 2023 Papua New Guinea update was scheduled to be co-hosted with the School of Business and Public Policy at the University of Papua New Guinea on August 17-18, 2023, at the Waigani campus of the University of Papua New Guinea, Port Moresby. The conference was announced under the theme of resilient and diverse development, and the program topics included climate change, gender equality, health and the impact of COVID-19, and education.

The Development Policy Centre's annual 3-day Australasian AID Conference was scheduled for December 5-7, 2023 in Canberra, in partnership with The Asia Foundation.

On March 7, 2023, the Development Policy Centre at Australian National University announced the dates of its two 2023 Update conferences on development.

The Centre announced that the Pacific Update conference will be held on June 13-15, 2023, at the University of the South Pacific in Suva, Fiji. The Pacific Update conference is the main forum for discussing economic, political, environmental, and social issues in the region. The conference will be co-hosted with the School of Accounting, Finance, and Economics at the University of the South Pacific.

The organization also announced a call for conference papers with a deadline of April 3, 2023. Possible topics include education and health, economic development, social protection, poverty reduction, climate change, environment, social inclusion and gender equality.

Separately, the Centre announced that the annual PNG Update conference will be held on August 17-18, 2023 at the University of Papua New Guinea on the Waigani campus, Port Moresby. The conference will be co-organized by the Australian National University and the School of Business and Public Policy at the University of Papua New Guinea.

In February 2023, the Australian DFAT published submissions to the Australian aid policy review released in February 2023, revealing widespread calls for reform of Australian ODA to education.

One proposal from the Australian Technology Network of Universities called for the inclusion of Australian universities to assist entrepreneurial growth in partner countries.

This position was echoed by the Lowy Institute, an Australian development think tank, which called for reform and innovation in education assistance to Southeast Asia. In particular, the think tank urged Australia to focus less on international students as a market opportunity and prioritize capacity-building in the region.

Offering solutions, the think tank argued Australia should provide more scholarships for long-term studies, become more active in technical education, and assist partners in developing necessary skills for the ongoing industrial revolution in many Southeast Asian countries.

Moving beyond scholarships to Australia, proposals also argued that development cooperation programs should also prioritize improving partner countries' own vocational and technical education systems.

On February 3, 2023, the Lowy Institute launched its IPDC to focus on emerging and developing economies in the Pacific Islands, Southeast Asia, and South Asia.

The center will cover six key themes:

• Climate finance and decarbonizing development;
• Post-COVID-19 recovery and growth;
• Globalization and regional integration;
• Technology and the digital economy;
• The intersection of security and development; and
• The future of international development finance.

The IPDC was established with multi-year funding from DFAT.

The Lowy Institute also announced plans to launch a new ODA map tracking flows into Southeast Asia in 2023.

In January 2023, the Australian government published 213 submissions to its 'Aid Policy Review'.

The submissions were part of a public consultation by DFAT on Australian ODA and invited stakeholders at all levels to submit commentary on Australian development policy. The review was announced in anticipation of the creation of a new Australian development policy, which is scheduled to be completed by May 2023.

DFAT also appointed an expert panel to guide the review of international development policy. The diverse group includes former Minister for International Development and the Pacific, Concetta Fierravanti-Wells, and Doctor Robert Glasser, formerly the Secretary General of CARE International and head of the UN Office of Disaster Risk Reduction.

An associated Development Finance Review has been delayed and is expected to be completed in early 2023. The government has not indicated if the Development Finance Review will be publicly released.

On November 30, 2022, Australian Minister for International Development and the Pacific Pat Conroy flagged priorities for future Australian development cooperation.

Speaking at the Australian National University's annual development conference in Canberra, Conroy stated he would seek to embed a First Nations approach in Australia’s development program.

He also emphasized that climate change, gender equality, and disability were key issues, and announced that Australia would develop a new disability strategy to be launched later in 2023.

In delivering its assistance, Conroy stated Australia will work to increase localization in its cooperation efforts through strategies such as local procurement.

The new development cooperation policy is expected to be delivered by mid-2023.

On October 25, 2022, the Australian government released a revised federal budget, which indicated an ODA would rise to A$4.7 billion (US$3.0 billion) in 2022-23, up from A$4.5 billion (US$2.9 billion).
Substantial ODA increases were also announced for the years following 2022-23. Planned ODA budget increase average of A$0.44 billion (US$0.28 billion) in each of the following three financial years. While the increases reduced the aid cuts made by the previous government, Australia's ODA and ODA/GNI ratio are expected to continue to decline, given expected inflation. The ODA/GNI ratio will likely fall from 0.2% to 0.19%, rather than to 0.17%, as expected under the previous government.
Major sectors for assistance included gender, climate security, and infrastructure spending. The revised budget provided a major boost in ODA to the Pacific. Health spending is estimated to make up 20% of the total aid budget, while education is expected to account for 11%.

In a report released on October 8, 2022, the Lowy Institute suggested Australian Foreign Minister Penny Wong's September 2022 announcement of research into ODA restructuring is simply a repeat of the past two administrations.
The Lowy Institute's report outlined efforts by the previous government to research options for a major expansion of non-grant-based development finance. The previous government’s 'Eyers Report' in 2019 outlined a range of possible organizational arrangements for such financing. These possibilities included allocating funds to the Department of Foreign Affairs and Trade (DFAT), creating an entirely new body, or distributing non-ODA financing responsibilities across a number of agencies.
The previous government subsequently established the Australian Infrastructure Financing Facility for the Pacific (AIFFP), managed within DFAT. The facility combined market loan financing of up to A$3 billion (US$2.9 billion) with ODA grant finance of up to AU$500 million (US$348 million). The ODA component was drawn from other areas in the existing Australian development assistance program. Australian NGOs were critical of the potential diversion of funds from social sectors to infrastructure.
A different proposal, in the separate 2021 'Sedgwick Report,' proposed improved coordination between export finance agency projects and grant aid projects. This simpler approach would aim to demonstrate a long-term and well-considered Australian development partnership approach.
The current government plans to complete its own review of innovative financial arrangements by the end of 2022.

The UK government, along with Australia, Japan, New Zealand, and the US, set up a new informal ‘Partners in the Blue Pacific (PBP)’ initiative to support more effective and efficient cooperation with the Pacific Islands.

The partners of the initiative are longstanding development partners with the Pacific region, providing a combined US$2.1 billion in ODA. The initiative commits its partners to supporting the Pacific Islands' own priorities and to respecting the Islands' regionalism, sovereignty, transparency, and accountability. Partners of the initiative have committed to three core aims.

1. Deliver results more effectively by aligning development assistance with the Pacific Island Forum’s upcoming 2050 Strategy for the Blue Pacific Continent and increasing ambition for the region;
2. Support Pacific regionalism by strengthening engagement with Pacific Governments and the Pacific Islands Forum; and
3. Seek out opportunities to expand cooperation between the Pacific region and the world – including identifying opportunities at global fora.

Press release – UK government