The Intel

In Canberra, Australian development stands at a crossroads in 2025. Three scenarios seem possible following a federal election:

Scenario one: Business as usual. A returned Labor Government or a Coalition Government with limited interest in aid reform could mean little change. Aid budget increases are unlikely, and the International Development Policy will remain in implementation mode. A key question: would a Coalition Government retain a Development Minister and their inclusion on the National Security Committee?

Scenario two: Reform windows. A hung Parliament empowering internationalist or equality-minded independents, or a Labor Government prioritising development reform in a second term as promised, could open small opportunities. Expect continuity on gender equity and climate change, albeit with less fanfare.

Scenario three: Aid cuts. Watching the US, it’s hard not to wonder if this could happen in Australia. While I tend to think the drastic nature of the Trump approach to aid is less likely here, an increasingly securitised approach—or more ruthless self-interest—remain possible.

For my money, and with the current ‘cautious political consensus’ on aid, the business as usual scenario is the most likely. But aid cuts are possible and something for the contingency planning list.

Beyond politics, Australian development professionals will be watching:

1. US factor: US withdrawal from the Paris Agreement, cuts to multilateral contributions, and a diminished aid footprint will disrupt development efforts in the region and Australian development organisations.

2. Rise of AI: Exponential tech advancements will impact policy, social cohesion, and service delivery. Without investment and upskilling, Australia risks falling behind.

3. Conflict prevention: With regional fragility rising, Australia’s national security and conflict approach may broaden beyond inter-state conflict to squarely address sub-national conflict prevention. This could involve re-prioritising governance, informal justice systems, resilience, and peacebuilding.

4. Non-ODA increases: Finally, with more Australian Government expenditure in lower and middle-income countries coming from non-ODA sources, a bottom-up renovation of development will continue beyond traditional aid paradigms.

In the Pacific, 2024 saw genuinely big picture Australian policy achievements. I’m watching to see if that momentum is sustained in 2025, with an eye to some of the thorny issues already on the horizon.  

Last year’s slew of announcements had major development, diplomatic and security implications. The Falepili Union with Tuvalu incorporates major freedom-of-movement advances, and the Treaty with Nauru tied budget support to a close security partnership. The Pacific Policing Initiative and Pacific Response Group intensified Australia’s existing whole-of-government efforts.  

In the Pacific, Australia is bringing its relative financial weight, labour mobility offerings and much else to bear in a more integrated way. The question becomes: are there more of these deals to be struck? And how will the politics of both individual Pacific islands countries and Pacific regionalism respond to an assertive Australian position that really does appear to have ‘stepped up’?  

There are several sources of friction in the year ahead. How the future status of Bougainville will be resolved remains unclear and fraught. Eyes are already on the September 2025 Pacific Islands Forum meeting in Honiara. And a potential, long-awaited COP31 announcement is an opportunity for Pacific partners and Australia alike – but comes with tension around deeply divergent climate politics.  

I also wonder about the contrast between Australia in the Pacific and Southeast Asia. Australia must be more circumspect in the latter; any offering to populous, rapidly growing partners like Indonesia is always going to look very different to that with Pacific islands partners.  

We must not let a justifiable focus on the Pacific, whether in development or defence terms, occlude the significance of what is happening for Australia’s northwestern neighbours.

In Southeast Asia, I’ll be watching Australia’s reinvigorated mission to be both the development partner of choice and deepen economic engagement.  

These two objectives are, of course, linked. But in a region that has simultaneously seen some of the most remarkable growth in the world and still houses millions of people living in poverty, I’m interested in whether Australia can engage to expand economic opportunities without exacerbating inequality – an issue that has many experts concerned.

With some high-level policies settled - Australia’s Southeast Asia Economic Strategy to 2040 (‘Invested’) and bilateral and Southeast Asia Regional Development Partnership Plans published or close to - I’ll be watching how Australia balances its economic interests with the region’s inclusive growth and poverty reduction ambitions. With a particular eye to:

• Indonesia: As one of the wealthier, faster growing nations in the region, Australia’s economic interests are clear. But Indonesia is also home to over 26 million people living in poverty, and Australia’s largest Southeast Asian recipient of ODA. How Australia responds to policies like Prabowo’s ambitious free meals program this year will matter. My two cents: Australia should find ways to back Indonesia’s efforts trialling and implementing this agenda in the hardest-to-reach parts of the country.

• Timor-Leste: Negotiations on the development of the Greater Sunrise gas field remain a sticking point in Australia’s relationship with the poorest nation in Southeast Asia. I’ll be watching to see how continued deadlock or resolution impacts a petroleum fund that will either be sustained, transfer wealth to where it’s needed most or be depleted with little development benefit.

• Vietnam: The country’s agricultural sector - crucial for regional food security - is severely impacted by climate change, with rice production in the Mekong Delta especially at risk. Joint action on climate change is priority in Vietnam’s DPP, the new Comprehensive Strategic Partnership and Invested. So I’ll be watching to see whether all this fertile policy ground will trigger leaps forward in both Australian Government and private sector engagement on this.