OECD Development Co‑operation Peer Reviews: Australia 2025

Report

OECD Development Co‑operation Peer Reviews

20 January 2026

Findings

Abstract

This report presents the findings of the 2025 development co-operation peer review of Australia and includes the relevant recommendations approved by the Development Assistance Committee (DAC). It focuses on five areas of Australia’s development co‑operation that were identified in consultation with the Australian government and its partners. Following a review of Australia’s development co-operation architecture and the extent to which it is fit for purpose, the review analyses Australia’s global role including its support for multilateralism and policy coherence for sustainable development. It then explores Australia’s policies through the lens of partner and locally led development, and how effectively Australia’s co‑operation supports peace and stability objectives. Finally, the review takes stock of Australia’s growing innovative finance and infrastructure investments in the Indo-Pacific. For each of these areas the report identifies strengths and challenges as well as opportunities that lie ahead.

Context of the review

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An influential and stable democracy in the Indo-Pacific, Australia benefits from a strong, open economy

Political stability and a parliamentary majority put the current government in a solid position to advance key priorities. Following an election shaped by economic concerns, the centre-left Labor government of Prime Minister Albanese was re-elected to a second term in May 2025 with a large parliamentary majority, having been first elected in 2022 after three terms of the centre-right Liberal-National Coalition (2013-2022). Australians generally hold positive views about government openness1 and the quality of Australian democracy is consistently ranked as relatively high performing (Dunleavy and Evans, 2024[1]; International IDEA, 2025[2]). Compared to 2021, trust in Australian institutions has increased with 46% of Australians expressing high or moderately high trust in the federal government in 2023, exceeding the Organisation for Economic Co‑operation and Development (OECD) average of 39% (OECD, 2025[3]).

Australians enjoy a high quality of life; however, this is not experienced equally by all groups. Australia ranks seventh globally on the Human Development Index and above average on all metrics of the OECD Better Life Index (OECD, 2025[4]). Yet inequality is growing and exceeds the OECD average, with socio-economic inequalities worsening in wealth, housing, health and education (Monash University, 2025[5]).2 First Nations Australians in particular experience significantly lower outcomes in health, education and life expectancy, and several priority reform areas under the National Agreement on Closing the Gap – including rates of incarceration and suicide – have worsened (Productivity Commission, 2025[6]; Australian Human Rights Commission, 2024[7]).3 Rural and remote areas often lack access to basic services (AIHW, 2024[8]) and the increasing impacts of climate change disproportionately affect the livelihoods and cultures of groups living in more remote areas (Australian Government, 2021[9]).

Despite global uncertainties Australia’s economy continues to show resilience. Cost-of-living relief programmes, addressing the housing affordability crisis and accelerating progress toward net zero carbon emissions are key priorities of the government and are generating some fiscal pressure. However, Australia’s macroeconomic context remains strong following decades of nearly uninterrupted growth, which has helped to sustain Australia’s high gross domestic product (GDP) per capita. Australia’s GDP growth is projected to rise in 2025 and 2026 (1.8% and 2.2% respectively) and net debt to GDP remains modest – expected to be just 6.6% in 2026 (OECD, 2025[10]). Gross debt to GDP (57.1%) is also below the OECD average of 111.7% as of 2024 (OECD, 2025[11]). The main sources of risk to the OECD’s GDP projections are external, notably import demand in the People’s Republic of China (hereafter “China”), Australia’s largest export market and the largest consumer of Australia’s main export commodities (OECD, 2025[11]), alongside broader global uncertainties. Australia remains among the top three fossil fuel exporters worldwide and accelerating Australia’s own energy transition while pivoting the economy towards alternative exports are important structural challenges (Climate Change Authority, 2024[12]).

Australia’s neighbourhood has become increasingly framed by major power competition, yet internal governance challenges and tensions are also key drivers of instability in the region. The Indo-Pacific has come into focus as a critical stage for global power dynamics since Australia’s last peer review in 2018. The intersection of geopolitical and economic ambitions is illustrated in the proliferation of security initiatives and economic partnerships in the region (Australian Government, 2025[13]). While less prominent in public discourse, governance challenges, such as state effectiveness, societal cohesion and violence, and severe environmental fragility, are themselves risk factors for stability and all interact with major power competition (OECD, 2025[14]). Tensions in the South China Sea and the crisis in Myanmar are among the significant flashpoints in the region, alongside the destabilising impacts on the region of recent global trade disruption.

Australia’s development co‑operation continues to prioritise the Indo-Pacific in line with its regional stability and security objectives

Recent budget decisions have stabilised Australia’s official development assistance (ODA) volumes, with the Indo-Pacific remaining the focus. Having declined since the last review in 2018 (OECD, 2025[15]), Australia’s total ODA volume is now steady based on the government’s decision to index the ODA budget at 2.5% per year. Since largely withdrawing from Africa and Latin America in the 2010s, Australia continues to allocate most of its ODA within its neighbourhood. Australia’s ODA was strongly focused on the Indo-Pacific over the review period, with 38% of gross bilateral ODA allocated to countries in Oceania and 35% allocated to countries in Asia, excluding the Middle East (Figure 1). Most of Australia’s main ODA recipients are near neighbours, such as Papua New Guinea, Solomon Islands and Timor-Leste, all contexts exposed to high fragility. This geographical proximity shapes Australia’s policies and approach to partnerships in Southeast Asia and the Pacific – its two priority regions.

Figure 1. Australia’s bilateral ODA is heavily focused on Asia and Oceania
Copy link to Figure 1. Australia’s bilateral ODA is heavily focused on Asia and Oceania

In responding to the current context of global disruption, the government is reallocating ODA to support needs in the region. The closure of the United States Agency for International Development (USAID) has led the Australian government to review subsequent impacts on the Indo-Pacific region and reallocate ODA where needed. In Timor-Leste, for example, Australia responded to the USAID withdrawal in 2025 by stepping in to ensure that vaccination, school food programmes and gender equality initiatives continue, with similar efforts in Lao People’s Democratic Republic and Viet Nam (Minister for Foreign Affairs, 2025[17]). To enable this, funding reallocations have largely been from global programmes and multilateral funding for global health and education, rather than from new ODA resources.4 Australia has at the same time increased its use of non-ODA resources in delivering its stability and security objectives. Recognising the challenges of ODA graduation for Pacific Small Island Developing States (SIDS), the 2025/26 federal budget included a small allocation of development support to graduated countries, not reported as ODA (DFAT, 2025[18]).

The Department of Foreign Affairs and Trade (DFAT) continues to lead delivery of Australia’s international development policy through a significant whole-of-government effort. Over 25 agencies and departments are involved in the delivery of Australian international development policy, steered by DFAT. Approximately 93% of Australia’s ODA is delivered by DFAT with the remaining 7% delivered by other government agencies with funding appropriated separately (Figure 2). State and territory governments also play a role through direct agreements with partner country governments.

Figure 2. Oversight and delivery of Australia’s international development co-operation
Copy link to Figure 2. Oversight and delivery of Australia’s international development co-operation

Respective appropriations for ODA by key agencies in the 2025/26 budget

Changes to the development co-operation architecture are ongoing in a context of strengthened political and public support. Public support for Australia’s international development co‑operation has grown, reaching its highest level in eight years in 2025 (Lowy Institute, 2025[20]). Following the integration of the agency AusAID into DFAT in 2014 and significant deprioritising of development in DFAT’s wider engagement, the current review period has been focused on rebuilding and re‑embedding Australia’s international development work into its foreign policy. The Albanese Labor government has explicitly committed to rebuilding Australia’s development capability, alongside a growing focus on diversifying the types of development finance Australia delivers. The 2025 federal election and subsequent cabinet changes also saw an increase in the number of ministers directly involved in Australia’s international development efforts. Three ministers with development responsibilities now sit in cabinet: the Minister for Foreign Affairs, the Minister for International Development and the Minister for Pacific Island Affairs. Notably, the Minister for International Development is also responsible for the Multicultural Affairs and Small Businesses portfolios, with International Development and Pacific Island Affairs now split between two ministerial roles. The Minister for Pacific Island Affairs retained responsibility for Defence Industry.

Fit-for-purpose systems in a time of rapid change

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Political messaging on the value of development as a “tool of statecraft” has provided renewed strategic clarity for Australia’s international development programme

The 2023 International Development Policy (IDP) is providing a strengthened framework and greater strategic clarity for Australia’s development programme. Launched in 2023, the IDP (DFAT, 2023[21]) acknowledges climate change as a major driver of instability and recognises the need to incorporate First Nations input, leadership and traditions into Australia’s development responses. These reflect notable shifts in Australia’s policy framework and underpin a significantly refreshed approach to development co-operation and partnerships since the last review.5 The 2023 IDP was produced relatively quickly and in consultation with domestic and international stakeholders including partner governments, civil society and local organisations.6 It also takes forward findings of several strategic government reviews, notably the 2023 Defence Strategic Review, the 2023 Development Finance Review and the earlier DFAT capability review, helping to align cross-government efforts behind common objectives.7 Implementation of the policy has been supported by consistent political and cross government messaging on the value of leveraging all tools of statecraft, including development, for Australia’s national interests.

Based on broad political consensus, Australia seeks to be the partner of choice in its regional neighbourhood. Over the review period (2018-2025), Australia delivered approximately 75% of its ODA in its immediate neighbourhood, with almost 40% in the Pacific alone. This makes Australia a significant provider of ODA in its own region, providing more than half of total ODA in key partner countries. Recognising the Indo-Pacific as “a region under pressure”, and that an effective development programme is key to building regional resilience to global shocks and climate change, the current government has committed to reinvesting in and rebuilding Australia’s development programme in the region with the objective to “make Australia a partner of choice” (Australian Government, 2025[13]). This approach – which includes a commitment to further focus Australia’s ODA on the Indo-Pacific – has benefitted from greater bipartisan consensus on the strategic relevance of ODA. Reinforced following the COVID-19 pandemic, this consensus also reflects greater recognition in Australia of the impacts of climate change and shifting donor landscape in Asia and the Pacific, including the declining presence of some DAC members and increased engagement by China.8

The 2023 policy links regional stability and prosperity to poverty reduction at a high level but lacks actionable commitments or details on how its implementation will address poverty. The 2023 policy and its performance framework (DFAT, 2023[22]) describe the core objective of Australia’s development co‑operation as advancing the stability and prosperity of the Indo-Pacific region, linking this at a high-level to poverty reduction:

The objective of Australia’s development program is to advance an Indo-Pacific that is peaceful, stable, and prosperous. A region that is predictable—where differences are resolved by international law and norms, and where we can cooperate, trade, and thrive. To achieve this requires sustainable development and lifting people out of poverty (DFAT, 2023[21]).

The policy mentions links between Australia’s key priority areas such as gender equality and climate change, and poverty reduction. It acknowledges that “social exclusion, marginalisation, and poverty are interconnected.” However, it lacks actionable commitments or details on how delivery of the policy will address poverty in practice. This contrasts with the tangible details on gender equality and disabilities that are included in the policy and its performance framework. The absence of concrete commitments on poverty reduction and significant scope for discretion in the policy’s implementation in Australia’s decentralised model presents a risk given the strong pull towards geostrategic considerations. Importantly, DFAT is investing in mandatory pre-posting training on poverty and social analysis for all development economic and policy roles, and all ODA programmes are expected to identify risks to vulnerable populations. While staff are prompted to think about poverty reduction outcomes, the inclusion of such analysis is optional. Integrating more tangible requirements relating to poverty reduction into the performance framework, through programme design scoring matrixes or explicitly requiring poverty reduction impacts in ODA allocations, would help protect against undermining or blurring of long-term sustainable development objectives in the delivery of Australia’s policy goals.

Recent bilateral agreements in the form of treaties illustrate a shift to more formally integrating development, soft power, security and diplomacy in Australia’s region. The Australian government is increasingly using treaty-level agreements to structure and define bilateral relations with its key development partners, reflecting efforts to build partnerships that encompass economic, climate, foreign and defence policy, and migration considerations alongside development. For example, the Falepili Union Treaty signed between Australia and Tuvalu in 2023 recognises the shared security interests of both countries and commits to work together in the face of the existential threat posed by climate change (Box 1). While the treaty’s migration pathway has been welcomed by many Tuvaluans, it has also been challenged by some Tuvaluan experts for not directly addressing the climate crisis that threatens Tuvalu’s territorial integrity (Marinaccio, 2025[23]). Additional treaty agreements are under negotiation, including with Vanuatu, while others have recently been signed, including with Papua New Guinea. Recent treaty and security agreements have also been accompanied by highly publicised soft-power agreements such as the National Rugby League agreement with Papua New Guinea.9 While geostrategic drivers have helped to create a modernised, bipartisan narrative for development co-operation in Australia, it also risks the diversion of increasingly limited development finance towards more reactive foreign policy objectives and away from significant structural challenges and human development needs in Australia’s region.10 As treaty instruments play a growing role in shaping Australia’s development partnerships, managing this will require robust development leadership within DFAT and continued political support on the value of patient, long‑term development partnerships. It will also rely on accountability and demand from partner country stakeholders to ensure Australia’s investments address development needs, benefit local communities and reach the poorest, rather than serving only elite or narrow interest groups.

Box 1. Treaties: A growing approach to balancing development and geopolitical objectives?

Copy link to Box 1. Treaties: A growing approach to balancing development and geopolitical objectives?

Australia is making growing use of treaty instruments to define comprehensive development and security partnerships with countries in its near neighbourhood.

Australia-Tuvalu Falepili Union Treaty

In November 2023, the governments of Australia and Tuvalu signed the Australia-Tuvalu Falepili Union treaty, which came into force in 2024. The treaty covers three main areas: climate co-operation, mobility with dignity and shared security. The Australia-Tuvalu Development Partnership Plan 2025-2030 is expected to translate the principles and priorities agreed in the treaty into action. Under the treaty component on uplifting the Australia-Tuvalu development partnership, the sectors listed are telecommunications, education, fiscal support, connectivity and health, also priorities in the DPP.

Under the treaty, Australia recognises Tuvalu's continuing statehood and sovereignty, notwithstanding the impact of climate change-related sea level rise; commits to assist Tuvalu in response to a major natural disaster, health pandemic or military aggression; and creates a special mobility visa pathway. Run through a ballot system and starting in 2025, the mobility pathway enables 280 Tuvaluans to apply for a visa each year to live, study and work in Australia permanently.

In return, any partnership, arrangement or engagement with any other State or entity related to Tuvalu’s security or defence must be mutually agreed with Australia. Tuvalu must also ensure its immigration, passport, citizenship and border controls meet international standards for integrity and security.

Nauru-Australia Treaty

Australia is Nauru’s primary security, economic and development partner, and Nauru’s economy currently relies on revenue from Australia’s regional processing centre for asylum seekers, ODA and fishing licence fees.

In 2024, the governments of Nauru and Australia signed the Nauru-Australia Treaty. As with the Falepili Union Treaty, the Nauru-Australia Treaty includes security dimensions: both countries will mutually agree on any engagement by others in Nauru’s security and key critical infrastructure sectors. The Treaty also agrees that no third party will use critical infrastructure for security purposes.

Under the Treaty, Australia will provide AUD 100 million over five years in direct budget support. The Commonwealth Bank of Australia also provides banking services to Nauru from 2025 to address risks of de-banking. Australia will also provide AUD 40 million over five years to support Nauru’s policing and security needs. Australia and Nauru are developing the 2025-2030 Development Partnership Plan, noting Nauru’s likely graduation from ODA-recipient status on 1 January 2027.

In addition to the two treaties covered here, as of October 2025, Australia is in the process of finalising a treaty with the government of Vanuatu, having recently signed the Papua New Guinea-Australia Mutual Defence Treaty.

Source: Governments of Australia and Tuvalu (2023[24]), Australia-Tuvalu Falepili Union, https://www.dfat.gov.au/sites/default/files/australia-tuvalu-falepili-union-treaty.pdf; Prime Minister of Australia (2024[25]), Nauru-Australia Treaty, https://www.pm.gov.au/media/nauru-australia-treaty; ADB (2025[26]), Nauru and ADB, https://www.adb.org/where-we-work/nauru.

Increased development resources would better equip the government to deliver on its ambitions

The current government has indexed the base ODA budget at 2.5% per year, although as a share of national income, ODA remains at a low and declining level. Since the 2022/23 October Budget, the government allocated additional resources in an effort to rebuild Australia’s ODA baseline.11 Australia’s 2023/24 Budget subsequently included a commitment to increase nominal ODA spending by 2.5% for a period of ten years starting in 2026/27 (DFAT, 2023[27]).12 This commitment essentially indexes ODA to inflation13 and falls short of the Labor Party’s 2023 commitment to allocate 0.5% of Australia’s GNI to international development by increasing the share of GNI spent on ODA each year (ALP, 2023[28]). It also remains below civil society’s calls to spend 1% of the federal budget on ODA – currently at 0.65%, the lowest level in a decade (ACFID, 2025[29]). In contrast, defence spending continues to increase and is almost 12 times ODA spending, at around 2.4% of GDP, one of the highest ratios in OECD countries (Figure 3).14 As envisioned in Australia’s 2023 IDP and the government’s “all tools of statecraft” approach to national security, development is a valuable lever for building regional stability and security, serving a critical role alongside defence and diplomacy. ODA also has unique comparative advantages over other flows of development finance including that it is countercyclical. Ensuring robust ODA resources are in place and are targeted to where they are needed most and have the most impact is important for protecting its unique value addition. Recognising Australia’s comparatively low ODA/GNI baseline, ranking 28 out of 32 DAC member countries in 2024 (Figure 4), going beyond the current 2.5% indexation would better enable delivery of the government’s commitment to long-term growth of the ODA budget.

Figure 3. While ODA and DFAT’s departmental budget are steady, the Foreign Affairs and Trade Portfolio departmental budget is declining
Copy link to Figure 3. While ODA and DFAT’s departmental budget are steady, the Foreign Affairs and Trade Portfolio departmental budget is declining

Comparison of allocations in the 2024/25 and 2025/26 Federal Budget, by “tool of statecraft”

Increasing Australia’s ODA would minimise pressure to reduce global spending to support regional needs and better align with Australia’s values. The current government has committed to “rebuilding” Australia’s development programme to be a more effective and responsive delivery arm for long-term foreign policy. Australia’s experience in challenging contexts such as Papua New Guinea and Timor-Leste, and in remote Pacific SIDS, demonstrates that being the “partner of choice” requires well-resourced systems that can support flexibility and coherence based on skilled, knowledgeable diplomats along with stable and consistent resourcing. While Australia’s international climate finance is well targeted towards vulnerable Pacific countries and delivered mostly as grants, it is largely allocated from within the ODA budget and does not yet match Australia’s economic capacity and historical responsibility (Climate Action Tracker, 2025[33]; Oxfam Australia, 2022[34]) (see also Supporting stability, peace and equality). The constrained volume of Australia’s overall ODA envelope continues to require trade-offs. For example, in responding to funding gaps in Australia’s neighbourhood following the closure of USAID, Australia has reallocated funding away from global programmes and multilateral organisations including on health and education (see Australia as a global actor). As a country reliant on international norms, ensuring resources are available to maintain Australia’s shareholding and influence in the multilateral system would better align with its statements in support of an effective rules-based order. Increasing Australia’s ODA envelope would also better equip the government to meet objectives set in its response to the Defence Strategic Review and the policy goals clearly articulated in the 2023 IDP.

Figure 4. As a share of national income, ODA remains below earlier levels and Australia’s peers
Copy link to Figure 4. As a share of national income, ODA remains below earlier levels and Australia’s peers

Australia’s reported development finance beyond ODA focuses on peacekeeping, defence and security activities. Australia recognises that there are contexts where non-ODA resources are relevant, for example, in Asian middle-income countries (MICs) where the size and structure of economies can absorb non-concessional financing.15 Exploring opportunities for additional non-ODA financial flows to support development objectives, including global public goods and other development enablers, is in line with Australia’s all tools of statecraft approach. Australia reports non-ODA flows to the OECD DAC under the categories of other official flows (OOF) and Total Official Support for Sustainable Development (TOSSD). In 2022 and 2023, Australia’s OOF averaged USD 50.65 million annually (gross disbursements), focused on Asia and Oceania. This included loans to Viet Nam valuing USD 60.7 million and a single loan to Fiji of USD 28.6 million (OECD, 2025[35]). In 2022 and 2023, Australia reported USD 521 million and USD 567 million respectively via TOSSD, excluding ODA flows. In 2023, the largest activities were those of the Australian Defence Force, including USD 121 million for the Defence Co‑operation Program in Far East Asia and USD 68 million for activities of the Australian Defence Force in the Middle East (Figure 5). A further USD 20 million was reported for border security activities of the Department of Home Affairs, with smaller amounts capturing non-ODA funded policing partnerships (see Box 8). While reportable against the sustainable development goals (SDGs) and under TOSSD’s purpose codes on international peacekeeping, conflict prevention, police and immigration, this data is not yet validated for its developmental impacts for partner countries.

Figure 5. Most of Australia’s TOSSD funding supports the ADF, Police and Home Affairs
Copy link to Figure 5. Most of Australia’s TOSSD funding supports the ADF, Police and Home Affairs

TOSSD reporting by purpose code, 2022-2023

While the government has built greater bipartisan support for international development co‑operation, DFAT could take a bolder approach to garnering political endorsement and buy‑in across government. Through regular ministerial speeches and statements, the government has crafted a more compelling narrative for Australia’s international engagement in the region, and the reintroduction of annual Performance of Australian Development Cooperation (PADC) reporting also provides communication on concrete results. To embed the current pivot to seeing a robust development programme as an integral foreign policy tool, building and sustaining broad-based understanding of the value of Australia’s global engagement will be essential. This will require ongoing communication with political leaders on the value of Australia’s engagement with the region and beyond. Visits to the Pacific by government and United Nations (UN) officials have proven to be a powerful strategy for building awareness of the unique challenges, realities and costs associated with supporting Pacific countries, in particular remote Pacific SIDS16 (see Australia as a global actor). DFAT could explore whether more active communication and knowledge sharing between members of parliament, public servants and experts could support honest conversations about the opportunities, challenges and impacts of Australia’s development engagement in the Pacific and the relevance and potential of Australia’s global engagement and influence more broadly. The United Kingdom’s International Development Committee and Finland’s Development Policy Committee are examples of the value of open dialogue and exchange on evidence, and with experts, for building understanding among members of parliament.17

Increased transparency is providing a foundation for building wider understanding of the value of Australia’s global engagement. As recommended in Australia’s 2018 OECD DAC review (Annex A), the government has improved the transparency of Australia’s ODA (Aly, 2025[37]). This has been achieved through the AusDevPortal launched in 202418, the resumption of reporting to the International Aid Transparency Initiative (IATI) in 2024, and the annual PADC reporting. Maintaining data portals such as the AusDevPortal and ensuring sufficient resources for the data and statistics that underpin them is vital. Recent improvements in the quality of Australia’s reporting to the OECD further reflect DFAT investments in internal statistical capacities and a greater commitment to transparency. Further transparency efforts should also include Australia’s growing use of non-ODA resources in the Indo-Pacific, as these resources are often not captured by the extensive reporting and transparency requirements applied to ODA (see also Scaling up innovative finance and investments in infrastructure).

Making the case to the Australian public should incorporate messaging on global public goods and engage diaspora. Moving from transparency to understanding and public support requires a strategic, modern and resourced approach to communicating backed by continued political and senior public service leadership. Investment by DFAT in developing curriculum resources for Australian schools on global citizenship, international development, and the SDGs are valuable to build awareness from an early age (see Annex A) and will benefit from continued cross government collaboration. Recent emphasis on a whole-of-nation foreign policy is a positive shift and speaks to the largely untapped potential of the wider Australian community, particularly given the close people-to-people links between many Australians and partner countries. Proactive engagement with Australia’s sizable diaspora communities within and outside major cities may prove powerful as other OECD members such as Italy, New Zealand and the United Kingdom have explored.19 That Australia’s new Minister for International Development also holds responsibility for the Multicultural Affairs portfolio presents important opportunities in this regard. With increasing global resistance to international co‑operation – as well as the significant interconnectedness between discourse in Australia and narratives elsewhere – ensuring that public understanding is more proactively informed by and tailored to Australia’s unique context will be important. This could include, for example, better illustrating the value for money of global public health investments and other global public goods for the Australian population. There may also be scope for state and territory governments to play a more active role in building public understanding and support for Australia’s regional and global engagement.

Strengthening the architecture for delivering a responsive international development policy is a work in progress

DFAT has a clear mandate to lead Australia’s whole-of-government international development co‑operation. DFAT manages the majority of Australia’s ODA and co-ordinates Australia’s ODA and growing non-ODA engagements in the Indo-Pacific, including co-ordination with approximately 25 other departments and agencies. Two whole-of-government offices within DFAT, for the Pacific and for South‑East Asia, support a coherent approach in each region. Established in 2019, the Office of the Pacific has enhanced co-ordination on policy challenges that go beyond ODA, benefitting from secondees from a range of government departments.20 This model facilitates collaboration by building understanding and buy-in among staff across government and by going beyond information exchange. However, working across two distinct geographic regions requires continued effort to avoid silos and ensure cross-learning, demanding strong policy and evidence functions (see below).21 The Indo-Pacific Centre for Health Security and the International Development Finance Advisory Committee in DFAT are further examples of sound whole-of-government co‑ordination, comprising sector experts and representatives from other government departments such as Treasury and the Department of Health, Disability and Aging.

Recent strategic reviews recommend a stronger role for DFAT in an enhanced whole-of-government approach to engagement in the Indo-Pacific. In response to the May 2023 Defence Strategic Review, the 2023 IDP highlights the government’s commitment to “ramp up and reset whole-of-government coordination and proactive collaboration”. DFAT is seeking to deliver on this through strengthened consultation practices and investments in development capability. Ensuring DFAT can strike the balance between leadership and steering, versus control, will be important in further strengthening its ability to effectively drive whole-of-government co-ordination and collaboration. To achieve this, building the competencies of DFAT staff should go beyond development knowledge and skills to involve strengthening organisational culture, practical capability and confidence in working across different bureaucratic entities and with diverse international and multilateral partners (Australian Government, 2023[38]). Whole-of-government efforts would also benefit from a more concerted approach to building understanding of development and Australia’s global policy commitments within the broader Australian Public Service (APS). That APS staff have access to the Diplomatic Academy is positive and engagement could be further encouraged, recognising that shifting cultures also requires going beyond individual training (see also below on how Australia’s robust regulatory framework could be leveraged to more systematically assess and address areas of policy incoherence).

Enhanced steering and oversight structures are enabling a more integrated approach to development at country level. Heads of Mission in Australia’s embassies and high commissions have oversight across all of Australia’s engagements in the respective country, including where other government agencies are present at country level. Since the last review, this has now been coupled with the establishment of the Senior Responsible Officer (SRO) function – typically the Deputy Head of Mission – who has responsibility for driving alignment and integration between the development programme and Australia’s strategic objectives and broader engagement in a country or region. The SRO also ensures appropriate governance and oversight arrangements.22 As seen in Timor-Leste, this change has ensured greater alignment between the strategic environment and development programming. Development Partnership Plans (DPPs) also provide posts with a valuable tool to ensure development objectives remain prominent in guiding decision making and respond to the priorities of country and regional partners (see Enabling partner and locally led development for more information on DPPs).

Australia’s decentralised model supports responsive programming, by balancing strong guidance materials for staff with a high level of autonomy and delegation to posts. A relatively high degree of delegation to Australia’s posts is a key strength in its ability to partner effectively and deliver a joined-up whole-of-government effort that is context specific and responsive. As noted in the last review, Australia accomplishes this through a flexible division of responsibilities that considers the scale of ODA and level of engagement required in each country or regional context, together with a robust set of policies and guidance documents (Table 1). This provides posts with opportunities to help shape and influence programming decisions. However, this approach is also reliant on experienced staff and strong pre-posting training, both areas that warrant further attention (see Moving beyond a focus on training would enhance DFAT’s investments in capability).

DFAT should ensure its overall systems for steering, assurance and oversight are balanced and support effectiveness. Since 2023, the Development Program Committee (DPC) (formerly the Aid Governance Board) provides oversight and governance of the overall development co-operation programme. According to DFAT’s evaluation policy, it is also responsible for ensuring evaluation findings are used to inform the development strategies and investments it approves and endorses (DFAT, 2023[39]). Investments above a threshold of AUD 10 million are subject to quality assurance and peer review in accordance with the International Development Programming Guide (DFAT, 2024[40]), but are not subject to DPC scrutiny. All investments valued at AUD 100 million or more; deemed high or very high risk; or considered a facility, must go to the DPC for consideration at concept stage, proceeding to design once the concept has been endorsed. Investments requiring consideration by the DPC are also subject to an assessment by the department’s Quality and Risk Assurance Unit (DFAT, 2024[40]). The Terms of Reference for the DPC define its role as ensuring that development programming is consistent with government policy and, importantly, achieves development impact.23 Staff reported an imbalance between the level and extent of documentation required and the scope and opportunity for exchange on substance and concepts, with a risk of focusing on information exchange. The DPC could thus be further leveraged to provide space for critical reflection and debate, and drive a stronger focus on upstream design.

Level	Policy settings	Performance assessment	Reporting
Whole of Development Program	International Development Policy	Three tier indicator framework	DFAT Annual Report Annual bilateral Development Partnership talks Annual Performance of Australian Development Cooperation Report Online data portal
Country and Regional Programs	Development Partnership Plans	Annual reporting Mid-cycle strategic review
Multilateral Programs	Strategic Partnership Frameworks	Periodic multilateral performance assessment
Investments	Aid Programming Guide	Investment reports Independent evaluations Impact assessments

Source: DFAT (2023[22]), Australia’s International Development Performance and Delivery Framework, https://www.dfat.gov.au/sites/default/files/performance-delivery-framework.pdf

Reducing the extent to which programme management is outsourced to contractors may help strengthen strategic steering. DFAT continues to make significant use of contractors to design and manage the implementation of its programmes, with contractors serving as the “delivery partner” for approximately 25% of Australia’s total ODA expenditure, or a third of bilateral ODA, where they play an important intermediary role across diverse in-country partnerships. This has historically been a response to human resource constraints within the department (OECD, 2018[41]). However, as Australia’s policy ambitions evolve to more closely link development, diplomacy and security, and as programmes and the contexts in which Australia is operating have become more complex, DFAT might consider whether the current model provides sufficient opportunities for strategic steering towards longer-term change, as well as value for money. While working through managing contractors can provide DFAT with more control over programmes or greater reach into ministries when DFAT staff resources are limited, it can also undermine development effectiveness. For instance, interviews with diverse partners as well as recent evaluations highlight that a reliance on contractors can contribute to structural silos within and across programmes and inhibit flexibility (Strategic Development Group, 2024[42]; HDMES, 2023[43]), and that DFAT may be missing opportunities to steer programmes towards its goals (Ravindran and Teskey, 2024[44]; Strategic Development Group, 2023[45]).24 These challenges and risks were highlighted in Timor-Leste, where contractors expressed a willingness for greater engagement from the Australian government on strategic objectives. Evaluations and audits have also pointed to convoluted and layered contracting arrangements in complex programmes hindering value for money (ANAO, 2020[46]).25 This also raises risks of conflict of interest where contractors are hired for both project design and implementation, as well as evaluation. When coupled with high turnover and often limited development experience among DFAT staff posted to embassies, the reliance on contractors can create a tendency towards short-term, risk averse decision making, in turn generating missed opportunities for more strategic, innovative and transformative change as well as learning across Australia’s programmes. Accompanying reduced reliance on managing contractors with a move towards less complex programme designs may facilitate the transition, encourage greater clarity over programme objectives and increase flexibility and adaptation.

Reliance on a small pool of contractors also presents risks. Australia awards a relatively small number of high-value prime commercial contracts to a consistent pool of managing contractors. In financial year 2023/24, DFAT awarded 48 prime contracts, 96.6% of which were to a small set of contractors registered in Australia (OECD, 2025[47]). The earlier 2020 report of the ANAO also pointed out that “Approximately 97 per cent of aid delivered on behalf of the Australian Government through facility contractors was delivered by the top four contractors” (ANAO, 2020[46]). This reliance on a small pool of contracted partners can risk narrowing the scope for innovation. While Australia remains engaged in the Pacific and in Southeast Asia, the presence of fewer ODA providers in the region may further accelerate the concentration of expert organisations, a trend already perceived by some partners. Rebalancing steering to ensure it sits both in theory and in practice with DFAT would help mitigate these risks in the wider system and align with the ambitions of the 2023 IDP, including building DFAT capability. It would also respond to Australian government strategic priorities, such as the Defence Strategic Review, and reinforce the longer-term trajectory of the department. Reducing reliance on international contractors may also increase opportunities for less expensive, locally adapted alternatives, including by further empowering locally employed staff and through regional and triangular co-operation modalities.

Integrating diverse perspectives and evidence would support the bold programming needed to meet the government’s policy goals

While DFAT recognises the importance of knowledge management, there remains scope to better leverage the learning and evidence that programmes generate. Australia’s 2018 peer review recommended that DFAT resource its knowledge management framework and roadmap to better capitalise on the vast evidence generated from its performance reporting, evaluations, partners and research. Introduction of annual programme performance reports, accompanying investment level reports, and an Evaluation Improvement Strategy are key changes since the 2023 IDP. 26 However, progress has largely focused on updating systems and improving the quality of evaluations, with less attention to the systematic use of knowledge and evidence for greater effectiveness. For example, while PADC reports are rich with case studies, they are less focused on understanding and reflecting on underperformance. A 2024 review of the quality and use of DFAT evaluations (Bluebird Consultants, 2025[48]) also pointed to missed opportunities to make greater use of evidence in decision making, including through more frequent internal discussions and reflection on evaluation findings. Staff also report challenges in accessing findings, as well as difficulties due to limited time and high staff turnover. DFAT reports that cross-departmental consultations are underway to map current and future research priorities, with the outcome expected in late 2025 (DFAT, 2025[49]).27 While positive, this should go beyond a one-off exercise and be systematised in DFAT’s knowledge management approach, ensuring knowledge and learning are seen as an integrated part of achieving development effectiveness and value for money. Freeing up staff time and incentivising reflection on barriers and underperformance is essential to supporting impact. Building institutional incentives – including among senior management – to put evidence and learning at the centre of development practice can also help prevent geopolitical pressures and short timeframes from dominating in an integrated foreign ministry like DFAT.

DFAT could more effectively leverage Australia’s expertise and innovation potential to support adaptation and modernisation in the current context of flux. Under the 2023 IDP, a greater focus on partnership, locally led development and a whole-of-nation approach to development has resulted in a range of more innovative practices, such as the involvement of Australia’s banking sector in tackling barriers to development for partner countries. Recognising the relevance of innovative practice, the 2023 IDP also commits to deepening partnerships between technical agencies and research institutions in Australia and the region and expanding joint training and collaborative analysis with development organisations. Delivering on these commitments would be valuable. Key partner consultations highlighted significant scope for DFAT to strengthen the reflex to bring outside expertise and more innovative practices into its own ways of working. The former innovationXchange (iXc), while not without challenges, provided signals to staff and partners on the value of innovation in addressing intractable challenges (Elson, Feeny and Heinkel, 2019[50]).28 While there are pockets of innovation in DFAT, illustrated in its blended finance work, given the pace of change, the breadth and depth of the challenges facing the region, and DFAT’s integrated model, there remains scope to bring more adaptive and innovative ways of working into DFAT’s development thinking and overall ways of working (Australian Government, 2024[51]).29 Concerted leadership efforts to shift the department’s culture to encourage greater openness would be valuable in driving such behaviour change.

Ensuring structures are in place to incentivise challenge would also strengthen the focus on development outcomes and support bolder programming. DFAT’s former Office of Development Effectiveness (ODE) was responsible for building evidence for more effective development assistance, with an explicit mandate to facilitate debate about effectiveness and impact.30 The work of the ODE now falls to the Development Effectiveness and Enabling Division (PRD), which also has responsibility for risk, evaluation, procurement, agreements and systems. Evaluation is managed by a relatively small team, with a different model and reach than the former ODE. Recognising a gap, some country teams have established technical advisory bodies to support critical challenge, expertise and reflection – as seen in Timor-Leste’s Development Partners Technical Advisory Group (DTAG), which has proven highly effective. Practices also tend to be stronger on specific thematic priorities, such as on gender equality where an expectation of impact has been consistently communicated and integrated into DFAT’s policies and guidance. However, at an operational level this critical challenge function is lacking. This contributes to a risk that programming is guided more by precedent and risk aversion than by seeking to creatively tackle the complex and evolving challenges identified in Australia’s 2023 IDP. Ensuring space for challenge requires both a mandate and tone set from the top, as well as staff time and resources.

Strengthening DFAT’s centralised evaluation function, and greater investment in strategic evaluations, would support a stronger focus on results. Evaluative evidence that supports staff to look across programmes is particularly important in Australia’s decentralised and discretionary system. Under the current model, responsibility for evaluation is largely decentralised to teams and most evaluations are project and programme evaluations. With the closure of ODE, DFAT now undertakes few thematic or strategic evaluations that go beyond a specific country context to consider a portfolio of interventions, with few such evaluations planned up to 2027.31 Recent initiatives including an evaluation helpdesk, training and on-the-job mentoring focused on strengthening evaluation quality are appreciated by staff, as noted in Timor-Leste and Tonga. While these investments are valuable, the lack of strategic evaluations and shared thematic level findings that elevate evidence and learning across multiple programmes was identified as a challenge by staff in consultations. Findings in the 2024 Review of the Quality and Use of DFAT Evaluations further indicated challenges around the use of evaluations for broader learning beyond a specific programme team, that silos within DFAT can limit useful sharing of evaluation findings across teams, and that staff felt they lacked examples on how to “socialise” results and recommendations, both internally and externally (Bluebird Consultants, 2025[48]). While evaluations are published on DFAT’s website, the format does not facilitate synthesising by theme or topic, and while management responses are valued by staff, they can vary in quality. Reinstating a centralised learning function and strengthening processes to use and follow-up on evaluative findings – including through strengthened senior management engagement – would help to counteract departmental silos and support staff in having a cross-programme perspective. Continued attention to the quality of evaluations should also be accompanied by re-balancing the focus of evaluation towards strategic evaluations that synthesise and elevate learning around key priorities, challenges and enablers, including at a portfolio level. Further collaboration with the Australian Centre for Evaluation32 and learning from other DAC members on the potential of Artificial Intelligence (AI)33 may also prove useful.

Departmental culture is hindering a more agile, global and influential DFAT equipped for greater risk tolerance

DFAT is faced with a tension between the department’s focus on reputational, diplomatic and fiduciary risk and political ambitions to do more with Australia’s development programme. At a political and policy level there is a clear ambition to deliver complex and ambitious programmes that are sensitive to and respond to longer-term threats to peace and stability (DFAT, 2023[21]). Delivering on this more integrated vision of development co-operation requires a reflection on risk appetite and on the extent to which staff are enabled and empowered to manage for risks effectively.

At policy level, there is a clear understanding that pursuing risks can increase effectiveness and contribute to achieving stronger outcomes for Australia, yet this strong approach is not yet fully operationalised. In line with good practice, staff in DFAT are encouraged to promote a positive “risk culture” and embed risk management into day-to-day decision making (DFAT, 2025[49]). DFAT’s 2024 Enterprise Risk Management policy further articulates this strong approach to risk-based management, stating:

The department is committed to a positive risk culture that fosters collaboration, encourages debate and values independent views. Our desired risk culture is shaped by the behaviours and attitudes of our leaders and all staff. Willingness to identify, actively manage and respond to risk in the pursuit of objectives, to mitigate threats and to realise opportunities, is a leadership characteristic we want all staff to possess.
Our risk culture encourages staff to pursue risks where they will increase program effectiveness, improve our services and contribute to achieving the best possible outcome for Australia and Australians. We acknowledge initiatives may fail, despite good risk management. Where risks are realised, staff should be supported and encouraged to review the circumstances, enabling the department to learn (DFAT, 2024[52]).

This aligns with the risk-based approaches encouraged in the 2016 Recommendation of the Council for Development Co-operation Actors on Managing the Risk of Corruption (see Annex B). Positively, staff are required to use risk screening and assessments in both project design and implementation, and mitigation strategies are devised and adjusted through regular reviews. Nevertheless, DFAT’s partners report an entrenched sense of risk aversion among DFAT staff and as an institution, and a strong focus on fiduciary oversight and reputational risk avoidance. Partners express understanding of the importance and value of strong risk management practices, pointing to instances where DFAT’s focus had strengthened their own institutional practices, such as on child protection. However, partners also noted in general a lack of proportionality in DFAT’s approach to risk management, and that adhering to growing requirements created a significant burden on partners that was not matched by their overall resourcing.

Empowering risk taking through strengthened development capability and risk differentiation is needed to deliver the bold development programming that Australia is increasingly seeking. The government’s ambition to do more with Australia’s development programme, including at the intersection of development and other foreign policy objectives, brings with it greater risks and demands greater abilities to navigate risks. This is challenged by DFAT’s generalist model where staff are often posted early in their career and required to manage large and often complex programmes. As a result, relatively junior staff can be highly mechanical in their application of risk management, and types of risks are at times conflated, not fully differentiated or understood, with reputational and fiduciary risks taking precedence. Strengthened development capability and support, particularly for staff on their first posting, is key to being able to navigate and advocate for the informed risks needed to deliver on a more integrated, complex development offer.

Moving beyond a focus on training would enhance DFAT’s investments in capability

With ministerial impetus, efforts to build DFAT’s development capability are aiming to address longstanding challenges. Australia’s last peer review highlighted the need for DFAT to strengthen development capability, integrating specialist skills and better use development knowledge across the department’s matrixed structure, as well as greater mobilisation of locally engaged staff (see Annex A). Following the 2021‑2022 DFAT capability review, DFAT finalised an internal Ten-Year Future Capability Plan in May 2023. Both the review and the plan are unpublished and were not shared with the review team. According to DFAT, the Ten-Year Plan introduces “a change program for the department’s workforce management, learning and development capability, communication practices and organisational culture” (DFAT, 2025[49]). This is supported by additional resourcing through the 2023/24 federal budget to enhance development capability for a period of four years.34 DFAT investments in capability are also taking place alongside a broader effort to strengthen the APS, including through a reduction in expenditure on contractors and a corresponding investment in the APS workforce.35 This follows recent parliamentary inquiries on the longer-term negative impacts on the APS of outsourcing to consultancy firms. While there is evidence of strengthened capability and knowledge, for example on priority issues such as gender equality, gaps remain in specialist skills such as governance, where DFAT has only 1.5 full-time equivalent (FTE) staff with relevant expertise.36 Evaluations, interviews and APS well-being surveys also point to broader, sustained challenges relating to workplace culture and staffing levels in the department (Australian Government, 2024[51]), including in contrast to increases in strategic ambition. This continues to warrant close attention.

Recent capability investments, while much needed, have largely focused on building development knowledge and contract management skills. The 2023 IDP commits to investing in the skills required to deliver Australia’s policy through “high quality training and learning opportunities” for staff (DFAT, 2023[21]). This is supported by the Diplomatic Academy launched in 2018, notably its International Development Faculty.37 Training has targeted all levels, including Heads of Mission and Senior Executive Service staff, development programme officers, and locally engaged staff.38 While staff feedback indicates the Academy’s training offer has been valuable, they also report that pre-posting training is at times superficial and lacks hands-on examples that can be applied in practice when arriving at post, suggesting further scope to tailor training to more practical areas. Regular staff rotation and a mismatch between expertise and job function are also seen by partners as key challenges, and are themes raised in evaluations, warranting a more systemic approach to development capability particularly during the pre-posting phase. In addition to strengthening more practical pre-posting training, DFAT could also consider longer postings for development functions with an extended onboarding period, as part of more flexible staffing arrangements. Doing so would demonstrate recognition of the increased and important role that development partnerships and investments are playing in sustaining Australia’s broader bilateral and regional engagements.

Continuing to raise the strategic profile of development may encourage staff to pursue development roles. Australia’s self-assessment reports ongoing challenges for DFAT in attracting and retaining staff with development policy and programming expertise both in Australia and overseas, as well as with locally engaged staff at some overseas posts (DFAT, 2025[49]). Recent capability uplift efforts have benefitted from ministerial support including communication on the importance of DFAT diplomats undertaking a development posting.39 Continuing to demonstrate to staff that development is core foreign policy will be valuable. Recalibrating the division of labour between managing contractors and DFAT staff may help to shift staff conceptions of development as contract management. Other opportunities to raise development’s profile may include continuing to ensure development content in political visits to partner countries and in ministerial speeches. Building internal accountability by focusing DFAT senior executive attention on the performance of development programmes – for example, by including this in Head of Mission or SRO job mandates and performance structures – may also help to create greater demand for development impact and in turn incentivise strengthened development capability.

Australia could better leverage its strengthened development ecosystem. The 2023 IDP notes that all parts of the development ecosystem, including Australia’s commercial partners, civil society organisations (CSOs) and bilateral and multilateral partners, have a role in building the collective capability Australia needs to address future development needs. Such an ecosystem approach to capability is valuable. To strengthen the instinct to look and collaborate beyond the department, opportunities could involve enabling and placing greater emphasis on mid- and senior-level secondments for DFAT staff to multilateral organisations. This would have the benefit of strengthening multilateral capability and understanding within the department. DFAT's current recruitment focus is geared towards generalists, particularly, but not solely, through the graduate scheme. Increasing opportunities for mobility and secondment across a more diverse set of institutions, including beyond the APS, could bring broader perspectives and valuable experience into DFAT at more senior levels.

Australia is missing opportunities to maximise the role of local staff, including in the delivery of its strengthened approach to partnership. DFAT recognises the value of local staff when it comes to understanding context, long-term relationships and ability to act as interlocutors with partner organisations. The 2023 IDP highlights the role of local staff in delivering a high-quality development programme and commits to investing in their skills, opportunities and careers, including for development-focused locally engaged staff to take greater responsibility and leadership. In Timor-Leste, an active locally engaged staff committee and receptive senior leadership are helping to drive change, including implementing a career development plan. Nevertheless, limited senior positions in post organisational structures were still seen as a risk to the retention of skilled staff. It was also noted that the differentiation of locally engaged staff entitlements between locations – which can be the result of local labour laws – could be seen as a barrier to securing talent. This may warrant stronger action from Canberra to address system level barriers to achieving the 2023 IDP’s commitments. Ongoing work within the department on tailoring packages to the needs and opportunities of each context may help to address these constraints. Compared to other DAC members in the region such as New Zealand, locally engaged staff hired by Australia tend to be afforded fewer opportunities for responsibility and leadership, with the lack of opportunities to join sector working group meetings with development partners a visible example. This is an area that could warrant adjustment through centralised policy direction from Canberra to posts.

Recommendations

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To resource Australia’s foreign policy including the 2023 International Development Policy, the government should accelerate efforts to increase ODA from its current low base, and:
- ensure that ODA and non-ODA flows reinforce partner countries’ development priorities and are working towards common objectives
- continue to invest in strengthening public and parliamentary support for Australia’s global engagement, including by informing public debate with tailored communications and facilitating greater dialogue between parliamentarians and experts.
To incentivise development effectiveness and impact for partner countries, DFAT should:
- ensure oversight and steering mechanisms promote critical challenge in decision making around development investments, including in the choice of delivery partners
- fully embed risk-based management, including by improving staff capability to apply risk policies in a proportionate and flexible way
- reinvest in strategic evaluations and synthesis work, ensuring alignment with policy and decision-making cycles.
To strengthen effectiveness, DFAT should increase the capability of its systems and staff to drive strategic engagement in programmes delivered through managing contractors, and consider delivery models further upstream to identify the best mechanism to meet objectives and reduce unnecessary project complexity and layering.
To be fit to steer and lead a more ambitious development programme, DFAT should:
- continue embedding development capability across the department, including through strengthened pre-posting training for staff to enable them to perform in difficult contexts
- follow through on efforts to address challenges around well-being and workplace culture, including further incentivising diversity and innovation at all levels
- make greater use of locally engaged staff through access to senior roles in programme design, management and evaluation
- better structure the department’s conflict prevention knowledge and analysis to maximise the contributions of development investments to building stability and security.

Australia as a global actor

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Australia advocates for an effective multilateral system

As a country vulnerable to global challenges such as climate change, Australia depends on the effectiveness of the multilateral system for its own, as well as partner country, prosperity and stability. With the multilateral system under significant pressure, the government is more actively advocating for upholding a global rules-based system.40 In September 2024, Australia established a cross-regional Ministerial Group for the protection of aid workers (with Brazil, Colombia, Indonesia, Japan, Jordan, Sierra Leone, Switzerland and the United Kingdom) and in September 2025 the group launched the “Declaration for the Protection of Humanitarian Personnel” with the objective of delivering real protection for humanitarian workers risking their lives to protect others.41 As Australia bids for a non-permanent UN Security Council seat (2029-30), as well as to host COP31 in partnership with the Pacific, it is presented with further opportunities to contribute to strengthening and upholding the multilateral system. Ensuring DFAT has the capabilities and skills in place to deliver on these opportunities will be important (See Fit-for-purpose systems).42

Australia’s support for global public goods, such as global health, is driving change. Australia has demonstrated leadership on its priority issues such as global health and gender equality. On global health, investments in neglected diseases and strong cross-government structures, such as the Indo-Pacific Centre for Health Security, have provided an innovative model for co-operation that has attracted international interest and ensured Australia’s leadership and influence on global and regional health issues. Australia is also recognised globally for its leadership in cervical cancer elimination and through its good practice, such as its adherence to World Health Organization (WHO) vaccine guidelines, demonstrates the importance of multilateralism and encourages neighbouring developing countries to follow suit. Australia’s longstanding advocacy on sexual and gender-based violence, sexual and reproductive health rights, and the eradication of violence against women has also helped to elevate these issues in global fora.43 For example, during its 2018-2020 membership of the Human Rights Council, Australia used its position to advocate for ending violence against women and girls in conflict contexts, including statements on Myanmar and Syria, promoted gender equality in humanitarian contexts and, together with Indonesia, led a joint statement on family violence.44 As the first country to appoint an e‑safety commissioner, Australia is also drawing attention to technology facilitated violence against women and minors, supporting global engagement on these issues as a member of the Global Partnership for Action on Gender-Based Online Harassment and Abuse, which was launched at the Artificial Intelligence (AI) Summit in February 2025.

Australia uses its influence in multilateral fora to advance Pacific priorities

Australia effectively champions the priorities of Pacific SIDS in multilateral fora and through its partnerships. Australia engages in the governance processes of multilateral organisations where it effectively advocates for and influences reform. In recent years, multilateral representatives of Pacific countries have focused global advocacy on climate change, ocean governance, plastic pollution, biodiversity and strengthening multilateral responses to the specific vulnerabilities of SIDS, for example, coastal ecosystems. These priorities have been championed by Australia in fora such as the Group of Twenty (G20), the OECD and the United Nations. For example, Australia served on the UN High-Level Panel that developed the Multidimensional Vulnerability Index (MVI), and helped transform it into an adopted tool to inform multilateral funding eligibility decisions. In parallel, Australia has provided funding for SIDS to engage in multilateral processes and fora to advance their own interests directly.45 Australia has also been influential in fostering a deeper understanding among multilateral organisations of the challenges facing the region and of the specific costs of working in remote Pacific contexts. For example, Australia was instrumental in ensuring Pacific Island countries remain eligible for funding under Gavi’s allocation model, with specific treatment and longer graduation periods for those countries.46 Australia also provides additional funding to multilateral partners to cover the higher operating costs of working in challenging SIDS contexts, as seen in its partnership with the World Bank in Tonga through the Pacific Islands Umbrella Facility Trust Fund (PPIUF).47

By working with and through regional architecture, Australia seeks to strengthen regional ownership. Australia works through the Pacific Islands Forum (PIF) as the central channel for advancing regional development priorities in the Pacific, aligning with priorities outlined in the Forum’s 2050 Strategy for the Blue Pacific Continent (DFAT, 2023[21]). Australia is also an important provider of core support to organisations such as the PIF Secretariat, the Pacific Community (SPC), Forum Fisheries Agency (FFA) and the Secretariat of the Pacific Regional Environment Programme (SPREP), helping to strengthen regional architecture and support regionally led solutions. Reflecting the region’s acute vulnerability to climate change, Australia’s engagement in PIF includes support for the Pacific Resilience Facility, a PIF-led fund designed to give members accessible, predictable climate finance. While Australia’s support for regional climate funds is welcomed by Pacific countries, Australia could strengthen the coherence of its engagement as both a donor and a member by going further in mitigating the impacts of climate change in its region, accelerating the reduction of its own emissions and increasing its climate finance (see Supporting stability, peace and equality).

Falling multilateral funding presents trade-offs for Australia in supporting and influencing a strong multilateral system

Australia’s core multilateral funding has declined overall and continues to be below the DAC average. Australia’s generally stable and flexible multilateral funding is appreciated by its key multilateral partners and reflects a strong willingness to adapt and remain responsive, including in crisis-affected contexts. For example, in financial year 2024/25 Australia provided AUD 40 million in core funding to the World Food Programme (WFP), to be allocated where humanitarian needs are greatest.48 However, since the last review, Australia’s core contributions to multilateral organisations have declined, with earmarked contributions outweighing core funding since 2020 (Figure 6). Between 2018 and 2023, Australia’s core contributions averaged 17.7% of its total ODA, below the DAC average of 26% for the same period (OECD, 2025[15]). With assessments pointing to the effectiveness of its core multilateral support, sustaining and expanding core contributions would bring mutual benefits to Australia’s regional and global engagement (DFAT, 2021[53]). It would also strengthen Australia’s alignment with global standards for effective partnerships with multilateral organisations that call for the provision of “more predictable, multi-year funding” (OECD, 2021[54]). While funding is not the only way to strengthen and support the system, flexible, core funding can contribute towards Australia’s strategic goals to sustain the system globally, at the same time as expanding its space to influence and strengthen the system according to regional priorities.

Figure 6. Australia’s core contributions to multilateral organisations have fallen compared to 2018
Copy link to Figure 6. Australia’s core contributions to multilateral organisations have fallen compared to 2018

Australia’s earmarked multilateral funding reflects its focus on the Indo-Pacific region. Since the last review, Australia’s earmarked contributions have retained their regional focus on Asia (including the Middle East) and Oceania, with an increase in funding to Europe in 2022 reflecting its response to the Russian Federation’s war of aggression against Ukraine (Figure 7). Multilateral replenishment commitments indicate that Australia’s contribution to the International Development Association (IDA) were cut following the last review in 2018 (IDA19 and IDA20 cycles) but have recently been restored for the upcoming replenishment cycle (IDA21). Support for regionally focused organisations such as the Asian Development Bank (ADB) has been sustained.49 Australia’s regional focus is consistent with the 2023 IDP’s commitment to address global challenges through “increasing global support to address the needs of [its] region, including the unique vulnerabilities of Small Island Developing States” (DFAT, 2023[21]).

Figure 7. Earmarked contributions to multilateral organisations target Asia and Oceania
Copy link to Figure 7. Earmarked contributions to multilateral organisations target Asia and Oceania

There are opportunities for Australia to go further in maintaining and influencing a strong multilateral system, including through country-level policy engagement. At the global level, Australia participates as a member in Executive Board processes and conducts biennial High-Level Consultations, both opportunities that it uses to influence the multilateral system. For example, Australia is the incoming International Atomic Energy Agency (IAEA) Board of Governors Chair, the current WHO Executive Board Chair, and a member of the Peacebuilding Commission. As WHO Executive Board Chair, Australia is leading a process for organisational reform within the WHO together with other Officers of the Board. At country level, however, Australia could better leverage its position as the largest donor in many of the countries in which it is present with further dialogue in multilateral partnerships. For example, subcontracting multilateral partners through managing contractors offers fewer opportunities to engage key stakeholders in policy dialogue and to influence strategic direction. While capacity constraints exist within the system, seeking out opportunities to more proactively leverage Australia’s often unique ability to play a co-ordination role at country level could help to strengthen collaborative action and impact on shared development priorities.

Australia has reinstated its performance assessments of multilateral partnerships, but the extent to which these assessments inform decision making on multilateral funding remains unclear. After pausing its Multilateral Performance Assessments during COVID-19, Australia reinstated biennial assessments of its core multilateral partnerships from 2023. In its 2023-2024 Annual Performance Report (DFAT, 2024[55]), core funding partnerships with the ADB, the Global Partnership for Education (GPE), the WFP and WHO were positively evaluated by DFAT as good performance and value for money; similar findings were identified in its 2020-2021 evaluation of core multilateral funding for the COVID-19 response (DFAT, 2021[53]). Multilateral Performance Assessments review the effectiveness of multilateral organisations against the Strategic Partnership Frameworks (SPF) Australia has in place with individual partners, as well as Australia’s broader policy priorities in the 2023 IDP, including on gender equality and disability, climate, locally led development and humanitarian action. As a member of the Multilateral Performance Network (MOPAN), Australia also draws on its assessments. The 2018 peer review recommended that Australia “clearly communicate how performance assessments of its various partners are consistently used to inform funding decisions” (OECD, 2018[41]). While the annual performance report shares snapshots of its assessments, it is not clear how these assessments are being used to systematically inform decision making. Periodically evaluating the effectiveness of Australia’s multilateral influencing across programmes and portfolios, as some other DAC members have done, could usefully inform a strengthened approach to Australia’s multilateral engagement (See Fit-for-purpose systems).

Australia uses domestic policy levers to address structural challenges faced by partner countries in the Pacific

Australia recognises the potential of non-ODA policies to support partner country development priorities and is working to adjust domestic policy settings to align with the 2023 IDP. For example, Australia has responded to strong calls from its regional partners to expand labour migration opportunities in the Pacific, notably through the Pacific Australia Labour Mobility (PALM) scheme (Box 2). Research on Australia’s labour migration programmes has identified positive development outcomes, including increase in earnings and household incomes in sending countries and increased agency in decision making over household resources amongst female workers (Doan, Dornan and Edwards, 2023[56]). Recognising challenges, including the risk of loss of expertise in sending countries, reintegration, and the social impacts of family separation (Kanan and Putt, 2023[57]; Gerber and Gosper, 2025[58]; Zeng, 2025[59]), Australia has also committed to an AUD 440 million investment to expand and improve the PALM scheme, including strengthening worker welfare, supporting workers to attain formal qualifications, improving worker access to superannuation and providing access to Medicare for up to 200 families participating in a family accompaniment pilot. Further analysis and data collection on the broader development impacts in Pacific countries, in particular on reintegration outcomes, would strengthen the evidence base on the links between the scheme and the prosperity of the region.

A commitment to lower remittance costs and support for the wider banking environment in the Pacific are important areas of recent action. Since the last review, the cost of international money transfers (IMT) from Australia has gone down, and the decline has been faster in Australia than the global average (DFAT, 2023[60]). In terms of total average cost, Australia is now the least expensive country to send remittances from in the G20, falling from 6.40% in 2021 to 5.11% in 2025 (World Bank Group, 2024[61]; World Bank Group, 2025[62]). However, IMT costs remain above the G20 target of 3% and further progress requires ongoing regional and international collaboration to overcome regulatory and compliance barriers, foster market competition and develop inclusive digital infrastructures and literacy (Collins, 2023[63]), as well as behavioural and habitual shifts by users when choosing remittance providers, including building trust and supporting onboarding according to DFAT analysis. Australia recognises this challenge and continues to support the wider banking environment in the Pacific, including through leveraging its domestic influence on Australian banks to address the decline of correspondent banking relationships in the region (Box 3).

Box 2. Delivering on dual objectives: The Pacific-Australia Labour Mobility (PALM) scheme

Copy link to Box 2. Delivering on dual objectives: The Pacific-Australia Labour Mobility (PALM) scheme

Labour migration enables Australia to fill skills and labour shortages, while also promoting skills development and remittances in the Indo-Pacific. In April 2022, the Australian government combined its existing labour initiatives into one consolidated scheme. The Pacific-Australia Labour Mobility (PALM) scheme, established in 2022, allows workers from nine Pacific Island countries and Timor‑Leste to take up temporary jobs in Australia in sectors with labour shortages. Eligible employers can hire workers for seasonal roles of up to nine months or for longer-term positions of one to four years in unskilled, low-skilled and semi-skilled jobs across sectors such as agriculture, meat processing, tourism and care for older persons.

As of September 2025, there were over 30 000 PALM scheme workers in Australia, with their remittances estimated at AUD 450 million in 2024/25. This is significant in a region where countries are highly dependent on remittances. The scheme is jointly managed by DFAT, responsible for policy and Pacific engagement, and the Department for Employment and Workplace Relations (DEWR), which oversees domestic programme operations. During their placement, workers can engage in a skills development programme to gain employability and life skills or formal qualifications alongside practical on-the-job experience. The government is expanding opportunities to reflect the aspirations of participating countries. Over 700 PALM workers have graduated with a Certificate III in Individual Support (Ageing) through the Aged Care Expansion programme and the government is funding additional training for participants in an early childhood pilot.

While evaluations have found that the scheme has delivered positive development impacts for partner countries, cross-government management of the scheme has sometimes presented challenges in managing dual international and domestic priorities. In response, efforts are ongoing to strengthen inter‑agency management. DFAT and DEWR have conducted a governance review of the programme, co‑hosted interdepartmental workshops to develop a scheme-wide theory of change, and sought to clarify ways of working. Other agencies such as the Fair Work Ombudsman, Home Affairs and the Australian Border Force continue to provide compliance, visa and protection functions, underscoring the multi-agency, whole-of-government nature of PALM’s governance.

Source: OECD (2025[64]), Pacific Australia Labour Mobility Scheme, https://www.oecd.org/en/publications/oda-and-non-oda-eligible-activities_5b102172-en/pacific-australia-labour-mobility-scheme_628dfe7e-en.html#:~:text=The%20primary%20objective%20of%20the,responds%20to%20recipient%20countries'%20request; Doan, Dornan and Edwards. (2023[56]), The Gains and Pains of Working Away from Home: The Case of Pacific Temporary Migrant Workers in Australia and New Zealand, https://devpolicy.org/publications/reports/Pacific-temporary-migrant-workers-Nov2023.pdf; Crawford, Nunns and Bedford (2024[65]), Pacific Labour Facility (PLF) Independent Evaluation: Final report, https://www.dfat.gov.au/sites/default/files/pacific-australia-labour-mobility-scheme-pacific-labour-facility-evaluation-report.pdf; DFAT (2024[66]), DFAT Management Response to the Independent Evaluation of the Pacific Labour Facility https://www.dfat.gov.au/sites/default/files/pacific-australia-labour-mobility-scheme-pacific-labour-facility-evaluation-report-management-response.pdf.

Box 3. Supporting financial inclusion: Lowering the cost of remittances and tackling debanking

Copy link to Box 3. Supporting financial inclusion: Lowering the cost of remittances and tackling debanking

Lowering the cost of remittances

Remittances contribute significantly to GDP in Pacific SIDS, but transaction costs are amongst the highest in the world (Collins, 2023[63]). Jointly funded by New Zealand and Australia, Empowering Pacific Migrants through Remittances (EMPR) is a five-year, AUD 3.4 million programme over 2021‑2026. The programme manages the remittance comparison website “Send Money Pacific” and mobile application to compare international money transfer options for free, enabling users to select providers that maximise the value of remittances sent to Pacific households. The programme’s mid‑term review pointed to success in tailoring the tool to Pacific communities, and DFAT reports growing uptake by users. Australia also supports Ave Pa’anga Pau, a cashless remittance service for Tongan overseas workers by The Tonga Development Bank and the International Finance Corporation, with the potential for further rollout across the region. Australia’s Market Development Facility and the Pacific Digital Economy Programme also both subsidise and/or de-risk private sector actors to improve their services and work to encourage users to choose digital remittance options.

These projects are complemented by domestic policy adjustments to help lower remittance costs for Pacific workers. For example, in 2019, the Australian competition and consumer law regulator issued voluntary guidelines for international money transfer providers, urging clear price disclosures such as fees and exchange rate margins, and deployment of comparison tools. By 2021, most major remitters were adhering to these best practices, leading to improved transparency and lower costs for consumers.

Addressing debanking in the Pacific

Australia relies on correspondent banking relationships for remittances of money by PALM scheme employees, for the provision of ODA and for trade activities. Market conditions generally make the Pacific an unattractive region for foreign banks to operate in, and the Pacific has seen the fastest withdrawal of correspondent banking services of any region in the world.

Australia is addressing debanking in the Pacific through a combination of international collaboration and domestic action. The Australian government provided AUD 8.6 million to support several efforts: the World Bank’s Pacific Strengthening Correspondent Banking Relationships Project and digital identity project, the Asian Development Bank’s know-your-customer infrastructure and funding for the Attorney General’s Department to strengthen law and justice to bolster anti money laundering efforts across the region. Australia also sponsored the Pacific Banking Forum in July 2024 to address the decline of correspondent banking relationships in the region, alongside the United States.

Domestically, the government has passed enabling legislation to issue guarantees to Australian banks providing banking services in the Pacific and signed a 10-year guarantee with the Australia and New Zealand Banking Group (ANZ), to sustain its banking presence in the Pacific. The Pacific Banking Guarantee Act 2025 enables the Commonwealth, backed by the Consolidated Revenue Fund, to issue legally binding guarantees to Australian banks that operate in Pacific Island countries.

Note: This practice is documented in more detail on the Development Co-operation TIPs • Tools Insights Practices platform at https://www.oecd.org/en/topics/sub-issues/development-co-operation-in-practice/development-co-operation-tools-insights-practices.html.

Source: Cummings and Corvisy (2023[67]), Empowering Migrants through Pacific Remittances – Independent Mid-term Review, https://www.dfat.gov.au/sites/default/files/empr-mid-term-review.pdf; Parliament of Australia (2025[68]), Pacific Banking Guarantee Bill 2025, https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7303; ACCC (2021[69]), Money Remitters Improve Price Transparency after ACCC Inquiry, https://www.accc.gov.au/media-release/money-remitters-improve-price-transparency-after-accc-inquiry?utm.

Australia can build on efforts to address alignment to global commitments, especially on fossil fuels and responsible business conduct

New targets to lower its greenhouse gas emissions reflect strengthened action to address Australia’s contributions to climate change.50 In 2025, Australia announced its new Nationally Determined Contribution (NDC) under the Paris agreement, setting a 2035 interim target of reducing emissions by 62-70% below 2005 levels, and has separately set a target of 82% renewable energy by 2030.51 In 2023, Australia also strengthened its climate action by reforming the Safeguard Mechanism to impose stricter emissions limits on large industrial facilities. Investment in renewable energy is supported by the Renewable Energy Target with Australia’s first offshore wind zones contributing to renewables reaching 35% of the nation’s electricity generation in 2023 (CCPI, 2025[70]). Some fossil fuel subsidies have declined but major fossil fuel tax breaks remain (CCPI, 2025[70]). Australia remains one of the highest greenhouse gas emitters in the OECD, ranking seventh in total emissions and second per capita (Leandro, 2024[71]) and Australia’s coal and gas dependency, major energy exports and large agricultural sector make progress challenging. As Australia’s economy is facing a need to diversify in the face of global market shifts away from fossil fuels, accelerating efforts to shift trade relationships and development finance in the Indo-Pacific region to support a green export economy offers opportunities to advance more coherent action across Australia’s domestic and international commitments.52

Continued focus on responsible business conduct and stronger human rights monitoring and reporting are warranted. Australia’s last peer review encouraged the government to maximise its development impact through greater oversight of Australian business activity abroad (OECD, 2018[41]). Recent measures to combat modern slavery stand out, including through the implementation of the Modern Slavery Act 2018 which requires Australian entities and those conducting business in Australia with consolidated revenue of at least AUD 100 million to publish a modern slavery statement. In line with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct (RBC), the government is doing more to encourage RBC, including through the National Contact Point (NCP) and public procurement. Nevertheless, overall attention to human rights due diligence in the private sector could be further strengthened through greater oversight of business activity abroad and more proactively relaying RBC expectations to Australian companies, including by more specifically articulating the expectation of due diligence. For example, the Final Statement in a 2021-2023 complaint to the NCP relating to an Australian mining company operating in Myanmar encouraged, inter alia, greater engagement by the NCP with Australian government agencies and departments that assist Australian enterprises overseas, including Austrade,53 to ensure that due diligence expectations and guidance are consistently conveyed, particularly in high-risk and conflict contexts (Australian Government, 2023[72]). The 2025 Follow-up Report indicated subsequent, important efforts by the NCP to raise awareness within and through Australian Government agencies, positive progress that could be further built on (Australian Government, 2025[73]). Recent analysis by Macquarie University’s Business & Human Rights Access to Justice Lab found that the top 25 Australian Stock Exchange-listed companies by market capitalisation are not fully embedding their responsibility to protect human rights in line with the UN Guiding Principles on Business and Human Rights (UNGPs) which the Australia Government endorsed (Haddad, Jago and Deva, 2025[74]). While the 25 companies assessed had a strong focus on addressing modern slavery, most faltered in disclosing their human rights due diligence processes. Current and future measures to respond to the 2023 Review of the Modern Slavery Act provide the government with important opportunities to further strengthen action and ensure policy coherence in support of RBC.

With growing attention to Australia’s defence industry, Australian civil society engaged in international development have also pushed for greater transparency in Australia’s defence exports (ACFID, 2024[75]). Although Australia’s defence export strategy and framework aligns with international non-proliferation and export regimes (Elphick, 2025[76]), analysts have cautioned that its export regime is opaque and could undermine its efforts to uphold global standards (Varrall, 2023[77]), particularly its multilateral efforts to protect humanitarian workers and promote International Humanitarian Law in conflict contexts (see Supporting stability, peace and equality).

Australia’s robust regulatory framework could be leveraged to more systematically assess and address areas of policy incoherence

Australia’s interdepartmental structures and processes support policy coherence, notably in the Pacific. The 2023 IDP commits to strengthening policy coherence, and its three-tier performance indicator framework provides a means to assess both what has been achieved and how, across government. Delivery of Australia’s policy coherence for sustainable development commitments is also supported by recent political leadership and steering on the need for all of Australia’s policy levers to work in support of joint objectives in the Pacific. The Secretaries Board and Australian Cabinet, led by the Department of the Prime Minister and Cabinet (PM&C), enables regular political and bureaucratic dialogue and shared decision making. The Secretaries Board is chaired by the Secretary of PM&C, and meets monthly.54 Australia also establishes regular interdepartmental committees on issues such as climate, trade and multilateral engagement. These structures have been instrumental in advancing policy coherence in key areas for the Pacific as well as supporting the clear political imperative to build and sustain strong whole-of-government bilateral relationships with its neighbours.

Australia’s robust regulatory framework could be leveraged to more systematically address policy coherence including at a global level. Australia has well-established regulatory oversight via the Office of Impact Analysis (OIA), which sits in PM&C. The OIA is responsible for providing advice, guidance and oversight of impact assessments devised by agencies, to ensure proposals are assessed for economic, social and environmental impacts (OECD, 2025[78]; OIA, 2023[79]). While impact assessment frameworks look at alignment with international obligations and regulatory standards, there is no systematic monitoring of spillover effects on other countries, including developing countries, and the link to the SDGs is implicit rather than explicit. For example, the OIA reviewed the Anti Money Laundering and Counter Terrorism Financing and Other Legislation Amendment Bill (2019) in 2020 (OIA, 2020[80]) with no consideration of transboundary development impacts or spillover effects. Australia could leverage its regulatory structures more effectively to advance policy coherence for sustainable development, for example, through adding an explicit requirement to look at potential negative impacts on other countries, notably developing countries as well as opportunities to maximise positive effects.

Policy coherence could be advanced through engaging academia and think tanks to generate evidence, fostering citizen engagement and debate on trade-offs. Australia has a strong academic and research environment for supporting evidence-based policy making and public debate. However, research partners consulted for the review indicated that the opportunities for collaboration and engagement with DFAT were reducing (see Fit-for-purpose systems). As Australia seeks to strengthen the coherence of its engagement with partner countries, it could invest further in strategic partnerships with academia and think tanks. This would help foster evidence-based policy debate and citizen awareness of the trade-offs Australia must navigate. Continuing to engage with partner countries on potential new and existing policy coherence challenges will also be important (see also below, Australia delivers effective humanitarian response, while its refugee policy remains controversial). Australia could also capitalise on the opportunity to engage and leverage the knowledge of First Nations peoples more effectively in public debate on complex policy coherence issues, as they offer unique perspectives and alternative knowledge that has been historically marginalised in policy fora.

Recommendations

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To advance Australia’s commitment to an effective multilateral system, the government should protect and seek to increase core funding to key multilateral partners and ensure alignment between Australia’s engagement in multilateral headquarters and in partner countries.
To improve coherence across Australia’s policy objectives, the government should include transboundary impacts on developing countries in regulatory impact assessments and maintain active dialogue with partners on incoherence issues such as climate change and the regional processing of asylum seekers.

Enabling partner and locally led development

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Australia places partnerships with governments at the centre of its approach to locally led development

A strong focus on bilateral relationships reflects Australia’s aim to be the “partner of choice” in its region. The 2023 IDP recognises partnerships with governments as one of the primary approaches to support local leadership, solutions and accountability (DFAT, 2023[21]).55 Strengthening bilateral relationships is central to Australia’s development co-operation and the share of ODA delivered through partner country governments has doubled since the last review, from 5.4% of total bilateral ODA in 2018 to 11.4% in 2023 (OECD, 2025[81]). Australia has in turn pushed for national or state actors to be included in definitions of “local” in locally led development frameworks. This prioritisation of government partners reflects its recognition that a partner-led development programme is important for building long-lasting relationships in a geopolitically complex region.

Development Partnership Plans (DPPs) integrate the full spectrum of Australia's development co‑operation, including ODA and non-ODA activities. Since rolling out the approach in 2023, Australia has put in place 15 bilateral DPPs and 4 regional DPPs. The DPPs are developed through a consultative process, to understand context and reach mutual understanding with partners on priorities. For example, DFAT’s Office of Southeast Asia commissioned independent surveys of 50 non-government development experts across Australia’s partner countries in the region to inform bilateral and regional DPPs. DPPs are also an important tool for co-ordinating and sharing analysis outside of government; each DPP is publicly available and includes a section outlining its development approach, promoting transparency and engagement beyond government. While DPPs require significant DFAT staff time to produce, they have provided a solid basis on which to reset bilateral development partnerships and build mutual understanding, helping to drive an important shift in Australia’s overall approach. Building on learning from the current DPPs process, ensuring the next round of DPPs strike a balance between time invested and their ability to inform and steer decision making towards development priorities will be important.

While the DPPs enable Australia to identify and evaluate mutual priorities with its partners, DFAT faces prioritisation challenges particularly in contexts in which it is the largest funder. For example, in 2023, Australia’s ODA disbursements to Timor-Leste were approximately double the size of the second largest donor, the United States, and constituted nearly half of all DAC member disbursements combined. In Tonga, Australia is also the largest ODA provider, providing over half (58%) of all DAC member disbursements in 2023, followed by New Zealand (26%) (OECD, 2025[82]). Australia seeks to structure its support through the DPPs and, where it can, combines and leverages resources with other funders. This is particularly evident in key social sectors such as education, where Australia effectively co‑ordinates with New Zealand, for example, in Timor‑Leste and Tonga. Nonetheless, Australia’s presence can lead to trade-offs between the depth and breadth of its bilateral programmes as is the case in Timor‑Leste where it faces expectations to spread its investments across every sector. The geostrategic role of ODA as a relationship-building tool can contribute to this, as Australia seeks to respond to multiple priorities, particularly those of government. Australia’s relatively larger presence at country level can also come into tension with DFAT’s stretched human resources, limiting Australia’s ability to step into an expanded role in facilitating co‑ordination of and with other development partners.

Australia makes effective use of budget support, reflecting commitments to direct funding. Overall, Australia’s budget support has been a critical tool for helping Pacific partners maintain stability, manage crises and pursue long-term development goals. Australia’s use of sector and general budget support has increased since the last review, particularly following the COVID-19 pandemic. While bilateral ODA through recipient government channels dropped after peaking in 2021, it remains significantly higher than in 2018 (Figure 8). Australia’s use of sector and general budget support in 2023 (9.3%) was also notably higher than the DAC average of 2.9%. The increased use of budget support is welcomed by partner governments as enabling ownership and flexibility, and reflects a positive trend in using country systems, as recommended in Australia’s last peer review (OECD, 2018[41]). Several evaluations have also pointed to the value and effectiveness of budget support in contributing to partner-led development. For example, independent evaluations of Australia’s Fiscal Pacific Budget Support programme found that delivering through partner governments’ own systems promoted partner-led development, aligning with country and regional development plans (Equity Economics, 2024[83]; AFI, 2022[84]; Equity Economics, 2025[85]) (see Box 4).

Figure 8. Use of budget support has increased while core support to non-state actors has declined
Copy link to Figure 8. Use of budget support has increased while core support to non-state actors has declined

Box 4. Australia’s use of budget support advances partner-led development

Copy link to Box 4. Australia’s use of budget support advances partner-led development

Australia provides budget support to Pacific countries to help them manage economic shocks, strengthen resilience and deliver essential services. The 2025/26 Budget commits AUD 296 million over four years in ODA provided as budget support. According to Australia’s 2023 CRS reporting, the latest year of complete data, Australia committed general budget support to 17 partner countries, with the largest amounts committed to Fiji (USD 32.4 million) and Samoa (USD 18.9 million). Australia’s budget support is informed by its risk management practices, including partner country system assessments, which strengthen confidence in the recipient government’s capacity to absorb and manage funds. Australia also uses information gained through its budget support activities to inform and target its technical assistance priorities and support.

During the COVID-19 pandemic, Australia rapidly scaled up support through the Pacific COVID-19 Fiscal Budget Support (FBS) programme. Over 2020-2023, AUD 498 million (approximately USD 323 million) was delivered to 13 Pacific Island countries and Timor-Leste, helping them avert fiscal crises, maintain services and protect vulnerable groups. Budget support was disbursed through a combination of earmarked and general budget allocations, ensuring flexibility while enabling governments to sustain health, education and social protection programmes. Evaluations found the approach timely, cost-effective and better aligned to local needs and priorities.

Beyond immediate fiscal relief, budget support also created a platform for policy dialogue on economic reform, recovery and inclusion, including gender equality. The approach strengthened national ownership and accountability, while leveraging further concessional finance from other donors. For example, a 2022 evaluation of Australia's COVID-19 response finds that, in Fiji, Australia’s budget support helped to secure over AUD 700 million (approximately USD 450 million) in additional grants and concessional loans from the multilateral development banks and enabled Fiji to increase government borrowing to fund its national budget. However, the evaluation also highlighted challenges, including of directly attributing outcomes to budget support.

In some highly vulnerable Pacific SIDS, Australia’s budget support has also comprised a significant input to national budgets. For example, in Tonga, approximately 50% of Australia’s ODA is channelled through government systems as either sector or budget support; Australia’s budget support to Tonga reflected 15% of the country’s domestic revenue in 2021-2022 (DFAT, 2024[86]).

Source: Equity Economics (2025[85]), Fiji Recovery and Resilience Budget Support 2020-2023 Evaluation, https://www.dfat.gov.au/sites/default/files/fiji-recovery-and-resilience-budget-support-2020-23-evaluation-report.pdf; Equity Economics (2024[83]), Pacific Fiscal Budget Support 2020-2023 Evaluation, https://www.dfat.gov.au/sites/default/files/pacific-fiscal-budget-support-evaluation-report-final.pdf; AFI (2022[84]), Australia's COVID-19 Response Package for the Pacific and Timor-Leste, https://www.dfat.gov.au/sites/default/files/covid-19-economic-response-package-pacific-island-countries.pdf.

Measurement metrics for locally led development could better reflect policy ambitions to shift power

Reflecting policy commitments, DFAT has developed guidelines and measurement frameworks to support practical approaches to locally led development. At a policy level, Australia has committed to advancing locally led development by taking a more flexible and innovative approach to programming; multi-year funding and capacity development for local organisations; establishing a new civil society partnerships fund; and taking risk informed opportunities to provide direct financing to partner governments (DFAT, 2023[21]). Australia is one of few DAC members to develop targeted guidance to deliver this in practice (DFAT, 2024[87]). Development of the guidance was participatory, involving the consultation of local stakeholders, an external reference group and DFAT focal points across 33 overseas posts. The guidance outlines Australia’s approach to supporting locally led development across all phases of the programming cycle – identifying entry points for local actors in planning, design, partnering and procurement, implementation and monitoring, evaluation and learning (DFAT, 2024[87]). Reflecting this cross-cutting approach, Australia has integrated locally led development into other thematic policy frameworks, including those on humanitarian assistance, gender equality, disability equity and rights.56 DFAT’s measurement framework for tracking progress on locally led development is providing valuable data and also distinguishes it from other DAC members, few of whom have implemented similar systems (OECD, 2024[88]).

Australia has valuable targets for local participation, but its overall mandatory measurement approach could focus more on local agency and shifting power. DFAT has set a target that by 2026, 80% of bilateral investment programme designs and evaluations will include local participation. However, participation does not necessarily translate into or indicate local decision making or leadership, and the majority of DFAT’s mandatory indicators are procurement focused (see Box 5). While there is an intention to prioritise local leadership, in practice DFAT could further enable its local partners to lead design and implementation processes, using their own systems. Nonetheless, embassy staff in Timor‑Leste welcomed the flexibility of the guidelines to allow DFAT teams in partner countries to tailor and design action plans and measurement frameworks to specific country contexts.

Box 5. Measuring progress: Australia’s locally led development indicators

Copy link to Box 5. Measuring progress: Australia’s locally led development indicators

Australia tracks its performance in supporting locally led development through 11 indicators in the 2023 IDP’s Performance Delivery Framework (PADF): specifically, under Tier 2 (Australia’s contribution to development) and Tier 3 (How we work).

Indicators track direct financing to partner government systems, funding to local organisations, use of local suppliers through managing contractor subcontracts and subgrants, and engagement of local personnel, sub-contractors (individuals) and staff. Australia manually collects data through survey instruments (PERFORMS). Only 1 indicator out of 11 is generated from lead partner data. The PADF includes a Tier 3 indicator on partnerships (Partnerships underpin our development co‑operation). This commits Australia to regular dialogue on emerging practices and learning. It is complemented by a newly introduced perceptions survey of partner country governments, civil society organisations and sector experts every two years, the first of which was undertaken in 2025.

Progress against quantitative indicators

The 2023/24 Performance of Australian Development Co‑operation report, published in March 2025, documents an increase in the number and value of in-year funding provided through subcontracts and subgrants to local organisations under programmes implemented by managing contractors. In financial year 2023/24, DFAT reports 2 987 local subcontracts/subgrants valued at AUD 296 million, an increase of 22% and 24% respectively over 2022/23. There has also been an increase in the number of local personnel employed under programmes implemented by managing contractors: 4 263 in 2023/24, an increase of 11% over 2022/23. In 2023/24, local personnel were included in 72% of design teams and 74% of evaluation teams.

While the strong focus on procurement is valuable, retaining a focus on local agency and local decision making will ensure these efforts are accompanied by local partners taking a stronger lead in the design of programmes and their objectives and thereby genuinely shifting power.

Source: DFAT, (2024[55]), Performance of Australian Development Cooperation Report 2023–24 https://www.dfat.gov.au/publications/development/performance-of-australian-development-cooperation-report-2023-2024; DFAT (2024[87]), DFAT Guidance Note: Locally Led Development, https://www.dfat.gov.au/publications/development/dfat-guidance-note-locally-led-development.

Further efforts to strengthen local civil society, including in intermediary partnerships, would accelerate locally led development

Australia’s policy frameworks and strong leadership on gender equality and disability equity recognises the important role of local organisations in advancing inclusion. Australia’s support to women’s leadership and disability inclusion programmes in the Pacific and Timor‑Leste encourage locally led development through the provision of flexible funding to grassroots, national and regional organisations. Australia has also taken a peer-to-peer approach to capacity strengthening among disability inclusion organisations that effectively promotes locally led development (see Box 6, and below on Supporting stability, peace and equality).

Box 6. Supporting local organisations to advance gender equality and disability inclusion

Copy link to Box 6. Supporting local organisations to advance gender equality and disability inclusion

Australia’s gender equality, disability and social inclusion (GEDSI) ambition is reflected in its support for local civil society in the Pacific. Australia’s flagship gender equality programme, Pacific Women Lead (2021-2026) works through partnerships with Pacific civil society, Pacific women’s organisations and core support to regional institutions such as the Pacific Community (SPC). A notable feature of the programme is its support for Pacific women’s funds, including Women’s Fund Fiji and the Pacific Feminist Fund. These funds support locally led development by providing flexible, feminist, women-led financial support to reach marginalised women. Since 2009, Australia has also funded the Pacific Disability Forum to support its members across the Pacific to advocate for and advance the rights of people with disability.

As seen in Timor-Leste, Australia’s support for local civil society is also advancing locally led work on disability inclusion. Under PARTISIPA1 Australia has established a women’s leadership network, enabling women living with disabilities to effectively influence and engage with local authorities. An accessibility audit of infrastructure conducted under PARTISIPA led local authorities in Timor-Leste to upgrade critical infrastructure, including schools. Under PHD2 Australia has engaged in long-term partnerships with local civil society, strengthening their capacity to identify and respond to the priorities of people living with disabilities.

Australia’s peer-to-peer approach to capacity strengthening challenges the traditional top-down and unidirectional model of civil society capacity building and is an enabler of locally led development. In Timor-Leste, DFAT has facilitated peer-to-peer capacity strengthening on disability inclusion, where longer-term partners are able to share capacities with younger local organisations, including through the provision of small grants designed to align with growing organisational capacity. This is also a feature of Australian multi-country programming. For example, partners expressed appreciation for the support for disability inclusion in global programmes such as “RiseUp!”. The programme advances inclusive and representative grassroots leadership through supporting young women with disabilities in a peer-to-peer mentoring approach.

Notes:

1. PARTISIPA is a ten-year (2021-2031) AUD 80 million investment to assist the Government of Timor‑Leste to improve the access and quality of basic infrastructure and services in support of stability, human development and economic growth. PARTISIPA works in partnership with national and subnational governments to strengthen policies, systems and skills to improve the delivery of decentralised services and village-level infrastructure. Improving the operations and maintenance of rural water is a priority of the programme. PARTISIPA continues Australia’s long-term support for the national village development programme and its critical community driven development processes to enhance community resilience, social inclusion and economic opportunity. For more see, https://www.dfat.gov.au/publications/development/timor-leste-partisipa-2021-2031-design-document.

2. The Australia Timor-Leste Partnership for Human Development (PHD) supports health system strengthening for Primary Health Care through: clinical workforce development and post graduate medical training; health infrastructure upgrades and provision of essential equipment; clinical services (through UNFPA and Marie Stopes) in Family Planning and Maternal and Newborn care; basic financial management, budgeting and reporting skills at municipal health directorates; and advisory support and digital stock management (mSupply) for the central procurement and warehouse (INFPM).

Source: DFAT (2025[89]), “Pacific Regional – empowering women and girls”, https://www.dfat.gov.au/geo/pacific/development-assistance/empowering-women-and-girls; DFAT (2021[90]), “Timor-Leste PARTISIPA 2021-2031 Design Document”, https://www.dfat.gov.au/publications/development/timor-leste-partisipa-2021-2031-design-document; DFAT (2025[91]), “Quality Services in Timor‑Leste”, https://www.dfat.gov.au/geo/timor-leste/development-assistance/quality-services-timor-leste.

Greater focus on capacity strengthening and more flexible or core funding for local organisations could advance Australia’s locally led development objectives. Since the last review, Australia’s core support for partner country CSOs and other non-state actors has decreased (Figure 8). Additionally, most funding for local CSOs, especially smaller local organisations, is channelled through intermediaries. In its self-assessment, Australia justifies its use of international intermediaries in civil society funding on the basis that smaller organisations appreciate intermediaries’ role in providing reporting, monitoring and evaluation, safeguarding and capacity support. Nonetheless, the fall in core funding to local CSOs indicates that flexible, local funding is increasingly constrained. This could undermine Australia’s policy commitment to advance locally led development through increasing the flexibility of its programming. Core funding is also a valuable tool for strengthening the capacity and sustainability of civil society. DFAT is experimenting with approaches to funding its downstream local CSO partners through, for example, the Australian NGO Cooperation Program (ANCP) “pass-down” pilot running since 2022.57 In 2025/26, of the total AUD 143 million allocated to the ANCP, Australian NGOs report that AUD 66.4 million (46%) will flow directly to local CSO partners. When partner governments are included, this rises to AUD 74.0 million.58 A new Civil Society Partnerships Fund announced in August 2024, although not yet active as of September 2025 is expected to play a role in advancing Australia’s locally led agenda through a focus on long-term, flexible funding that strengthens capacity.

Equitable funding arrangements between contractors and local civil society could be further incentivised. Meeting Australia’s locally led development ambition would further benefit from a critical assessment of the distribution of resources between managing contractors and local organisations, to enable greater equity in these partnerships. The allocation of a small share of overhead costs to local partners in such funding arrangements requires particular attention. In the menu of key performance indicators in DFAT’s locally led development guidance note, an optional quantitative indicator can be used by international partners to measure the monetary value or percentage of core funding and “pass down” grants to local partners. This measure could be included as a mandatory indicator in DFAT’s Project Electronic Recording of Financial and Operational Reports Management System (PERFORMS), which is used to gain information at the contract and subcontract level on procurement, employment and financial data across in Australia’s development contracts (see Box 11). Integrating a target for this indicator into contracts (similar to the ANCP programme), could strengthen incentives in contractor partnerships to equitably share overhead allocations with local partners.

DFAT’s ability to partner locally could be strengthened by streamlining and harmonising risk management processes

Australia has committed to increasing support for civil society at country level, but smaller organisations face barriers in meeting its procurement regulations. Australia partners indirectly with a limited number of local CSOs who have, over long periods of repeat partnerships, been able to manage and meet Australia’s risk settings. Partnerships in Timor-Leste indicate that, over time, local civil society partners have strengthened their capacity to meet risk requirements and build trust. Australia’s locally led development guidance note acknowledges the need to implement locally led development in a way that meets Australian and partners’ legislative requirements, including DFAT policies that seek to safeguard against harm and ensure funding is not diverted from its intended purpose (DFAT, 2024[87]). DFAT’s Risk Appetite Statement – updated and endorsed by the DPC in February 2024 – recognises that locally led approaches “may expose DFAT to different implementation risks than experienced with other partners”, and indicates DFAT will commit resources to effectively manage these risks, including where necessary working with local partners to strengthen their capability to implement and meet policy requirements (DFAT, 2024[87]). While a positive commitment, this suggests a lack of adaptability in DFAT’s risk settings to accommodate a more diverse range of partners. Rather, local partners will need to strengthen their capacity to meet Australia’s requirements. As such, risk settings will continue to be a barrier to partnerships with local organisations unless more significant investments are made to provide core, flexible funding that strengthens capacity.

Australia could do more to streamline and harmonise its processes and assessments to advance locally led development objectives. Australia’s rigorous reporting and due diligence requirements can be demanding for its partners, reflecting Australia’s commitment to safeguarding. However, these high standards could be streamlined and harmonised across its investments by using passporting approaches that enable historic assessments to be reapplied to new partnerships. For example, the ANCP accreditation is only available for Australian NGOs. It provides a passporting opportunity for Australian NGOs. There could be further opportunities for local partners, including local partners beyond ANCP-funded programmes, to benefit from streamlined due diligence processes, harmonisation or passporting in order to access DFAT funding. Partners also had the perception that risk settings are not always proportionate to the levels of risk presented by investments (see Fit-for-purpose systems in a time of rapid change). Australia could make further efforts to tailor risk settings to the size or type of investment or harmonise requirements with those of other donors or international frameworks.59 Passporting and harmonisation are important enablers of locally led development, addressing the barriers presented by risk management and risk perceptions in this context (OECD, 2023[92]; OECD, 2024[88]).

Recommendations

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DFAT should further embed its locally led development commitments through continued, effective use of budget support in SIDS and through increased incentives for delivery partners to equitably fund local partner organisations.

See also recommendations under “Fit-for-purpose systems in a time of rapid change”

Supporting stability, peace and equality

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A stable and prosperous neighbourhood is vital to Australia’s national interests

Australia’s international development policy acknowledges the instability of international relations, with regional unpredictability deepening further since its drafting. Australia views its development co‑operation as an increasingly important part of addressing its partners’ challenges. Most Development Partnership Plans (DPPs) have a security component with involvement of the Department of Defence, the Australian Federal Police and the Department of Home Affairs. In the Pacific, the Boe Declaration on Regional Security further underpins how Australia supports regional initiatives on security. These frameworks go beyond traditional conceptions of security to include climate security, human security, environmental and maritime security, transnational crime and cybersecurity (Pacific Islands Forum, 2018[93]; DFAT, 2025[18]) (see Box 7 on Cyber connectivity).

Well-aligned policy frameworks and functioning co‑ordination structures help ensure Australia’s programmes meaningfully address risks to stability. Through its bilateral and multilateral diplomacy, trade, defence and development co‑operation capabilities, DFAT and other government departments individually address drivers of fragility and vulnerability, while collectively supporting partner governments’ priorities as reflected in the DPPs. Outside the Indo-Pacific, and particularly in crisis contexts, Australia uses partnerships with multilateral or non-governmental organisations to channel its ODA support, primarily as humanitarian assistance.60 Australia’s maritime security programmes providing patrol boats, aerial surveillance and training are examples of frontline responses to illegal fishing and maritime crime in Pacific Islands, illustrating how ODA and non-ODA can also serve as a deterrent and prevention measure for Australia’s partners. Australia also builds on historical relationships and its long-standing expertise in police co‑operation to strengthen bilateral partnerships and contribute to its security and stability objective (see Box 8 on Police co-operation in the Indo-Pacific).

Australia is contributing to the growing conflict prevention architecture in Southeast Asia. The annual IISS Shangri-La Dialogue offers middle and emerging powers in Southeast Asia an opportunity to raise concerns about regional stability, maritime security and defence (IISS, 2025[94]).61 Through this architecture, Australia supports partner countries to raise their profile and priorities. For example, Australia has been instrumental in supporting Timor-Leste to meet ASEAN accession requirements through technical and advisory support and language training.

Box 7. Cyber connectivity in the Pacific: Development, security and strategic infrastructure

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Reliable and affordable internet access has emerged as a critical challenge facing Pacific Small Island Developing States (SIDS) including as result of their limited infrastructure. Internet connectivity, data infrastructure and data management are all increasingly essential for effective governance and service delivery, with important development implications. Such infrastructure also represents important geopolitical and economic assets.

As part of a greater emphasis on supporting regional prosperity and security through transformative infrastructure, Australia has been scaling up its investment in submarine telecommunications cables in the Pacific. The Coral Sea Cable System, operational since 2018, links Papua New Guinea and Solomon Islands to Australia. Through the Australian Infrastructure Financing Facility for the Pacific, Australia also co‑operates with other development partners such as Japan, New Zealand and the United States to extend secure connectivity to countries including Kiribati, Federated States of Micronesia, Nauru, Palau, Tonga and Tuvalu, complementing commercial initiatives such as Google’s South Pacific Connect initiative. Such ODA investments leverage private sector resources to enable the design, manufacture and laying of an undersea cable connection.

While increasingly critical to countries’ governance and economic development, increased connectivity also brings increased risks of cybercrime among other societal risks and governance challenges, particularly in countries with limited regulatory capacity and digital expertise in law enforcement. Australia has therefore coupled its investments in connectivity infrastructure with support to partner governments’ ability to identify, prevent and manage risks including by helping them to strengthen their regulatory frameworks. In additional to regional initiatives such as the Pacific Cyber Security Operational Network (PaCSON), Australia also directly supports the establishment of Computer Emergency Response Teams (CERTs), backed up by Australia’s Cyber Rapid Assistance for Pacific Incidents and Disasters (Cyber RAPID) teams. Led by DFAT with expertise from both government agencies and the private sector, these teams assist overseas when Pacific governments request assistance in response to digital disasters.

Sources: DFAT (2024[95]), “Launch of the Cable Connectivity and Resilience Centre”, https://www.foreignminister.gov.au/minister/penny-wong/media-release/launch-cable-connectivity-and-resilience-centre; DFAT (2025[96]), “Pacific Cyber Security Operational Network”, https://www.dfat.gov.au/international-relations/themes/cyber-affairs/cyber-cooperation-program/pacific-cyber-security-operational-network-pacson; Coral Sea Cable Company (2025[97]), “Coral Sea Cable Company” https://coralseacablecompany.com/; Australia Pacific Business Connection (2023[98]),“South Pacific Connect Initiative to enhance digital connectivity”, https://apibc.org.au/news/south-pacific-connect-initiative-to-enhance-digital-connectivity/; TeleGeography (2025[99]), “Submarine cable map”, https://www.submarinecablemap.com/; Vocus (2024[100]), “Vocus and Google sign contracts to deliver Pacific Connect”; https://www.vocus.com.au/vocus-news/vocus-and-google-sign-contracts-to-deliver-pacific-connect; PaCSON (2025[101]), Pacific Cyber Security Operational Network, https://pacson.org/;. DFAT (2025[102]), “Cyber Affairs and Critical Technology”, https://www.dfat.gov.au/international-relations/themes/cyber-affairs-and-critical-technology.

The share of bilateral ODA targeting peace has increased. The share of Australia’s ODA that supports peace objectives has grown from 2020 reaching approximately 14.6% of total bilateral ODA in 2023.62 This is slightly above the DAC average of 12.2% (OECD, 2025[81]). Australia’s support for peace objectives has historically focused on public sector policy and administration and legal and judicial development (Figure 9). Both sectors are important for state building and resilience, and correspond to the needs of Australia’s partner countries, most of which are not in active conflict but face important dimensions of institutional fragility.63 For example, Australia continues its long-term support to peacebuilding in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) in the Philippines, combined with facilitating access to justice and education (DFAT, 2025[103]). Reflecting these priorities, in 2024, Australia also committed to increasing its contribution to the UN Peacebuilding Fund from AUD 4 million to AUD 15 million annually (United Nations, 2024[104]).

Figure 9. Australia’s evolving support for peace: Trends in ODA allocation since 2013
Copy link to Figure 9. Australia’s evolving support for peace: Trends in ODA allocation since 2013

Support to civic space and human rights has become more important in Australia’s neighborhood, signaling scope for further action. Australia has an important state building role with its partners and it aims to protect civic space to improve government effectiveness, responsiveness and boost social cohesion. Recognising that functioning civic space emerges through the combined efforts of a range of actors, including governments, line ministries, public institutions and civil society (OECD, 2022[105]), a more integrated approach to civic space in contexts of rising autocratisation would strengthen Australia’s efforts (DFAT, 2023[21]; OECD, 2025[14]). For example, Timor-Leste currently stands out as having one of the most democratising contexts in Asia (V-Dem Institute, 2025[106]). However, with Timor-Leste joining ASEAN, CSOs in Timor-Leste expressed concern that new policing doctrines may shift towards a stronger level of population control, as seen in other ASEAN contexts. Greater support for media freedom or civic education could usefully complement Australia’s current inclusion and civil society initiatives.

Box 8. An integrated approach to security sector assistance: Police co-operation in the Indo‑Pacific

Copy link to Box 8. An integrated approach to security sector assistance: Police co-operation in the Indo‑Pacific

Institutional fragility, isolation and other factors including widespread gender-based violence undermine cohesion and stability in parts of the Indo-Pacific. Threats from organised crime such as cybercrime, drug trafficking and maritime insecurity further strain under-resourced national police forces. Recognising these risks to regional stability, Australia has made police-to-police co-operation a key part of its development engagement.

Managed by the Australian Federal Police and integrated into Australia’s DPPs, police co‑operation forms part of bilateral agreements with Fiji, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Timor-Leste, Tonga, Tuvalu and Vanuatu. Australia’s support to the Royal Papua New Guinea Constabulary, for example, through the provision of equipment, facilities and capacity building, is in the shared interest of both countries. Security sector support is also complemented by governance support, including the law and justice sector. This is good practice and a clear contribution to peace objectives, helping preserve civic space and cohesive societies.

Australia’s approach is also regional, illustrated in historical regional platforms such as the Pacific Islands Chiefs of Police. Leveraging both bilateral co‑operation and regional structures helps ensure common understanding about shared challenges, such as maritime security, cybersecurity and gender-based violence.

Australia and its partners also consider security as involving both human and environmental security, including disaster preparedness. In Australia’s approach to police co-operation, local community policing officers work alongside community leaders, which helps to build trust and facilitates emergency responses, ensuring no one is left behind. In contexts of emergency response, embedded Australian police officers also help co‑ordinate with other military and civilian emergency response, as seen during the 2022 volcanic eruption in Tonga. The integration of Women Peace and Security through the AFP International Gender Strategy further contributes to addressing the structural under-representation of women in police institutions and therefore to building more sustainable security sectors.

Sources: DFAT (2023[107]), “Agreement between the government of Australia and the government of Papua New Guinea on a framework for closer security relations”, https://www.dfat.gov.au/sites/default/files/australia-papua-new-guinea-bilateral-security-agreement.pdf; Pacific Island Forum (2018[93]), “Boe Declaration on Regional Security”, https://forumsec.org/publications/boe-declaration-regional-security; The Asia Foundation (2019[108]), “Timor-Leste Community Police Perceptions Survey Summary of Key Findings”, https://asiafoundation.org/publication/timor-leste-community-police-perceptions-survey-summary-of-key-findings/; AFP (2018[109]), “International Command Gender Strategy 2018-2024”, https://www.afp.gov.au/news-centre/publications/international-command-gender-strategy-2018-2024; The Interpreter (2018[110]), “The RAMSI legacy for Pacific policing”, https://www.lowyinstitute.org/the-interpreter/ramsi-legacy-pacific-policing; PICP (2025[111]), “Welcome to the Pacific Islands Chiefs of Police”, https://www.picp.co.nz/.

Australia could further consolidate learning around development, peace and stability

Built into its bilateral security agreements, Australia’s integrated crisis response model sets it apart from most other DAC members. While other DAC members tend to keep humanitarian assistance separate from other foreign policy areas, Australia has integrated its humanitarian assistance into its crisis response (DFAT, 2023[112]). Australia’s 2024 humanitarian policy is strong and is helping to ensure a cross-DFAT and whole-of-government approach to humanitarian assistance. It is also a reference point for Australia’s conflict prevention, peacebuilding and crisis resilience efforts. The humanitarian policy emphasises the need to embed Australia’s conflict prevention, peacebuilding and crisis resilience efforts in its foreign policy and development programmes (DFAT, 2024[113]). It complements the 2023 IDP and has helped to provide space for more innovative thinking on different conflict prevention approaches. However, embedding conflict prevention, peacebuilding and crisis resilience into a humanitarian policy brings the risk of viewing conflict prevention solely through a humanitarian lens. Ensuring that conflict prevention and disaster risk reduction is integrated into DFAT’s broader work and that this is incentivised among senior management will be important to mitigate this risk and deliver on the policy’s objectives.

DFAT could enhance the structure and accessibility of existing conflict prevention expertise and analysis. A new conflict prevention and strategy branch, established in 2024 within DFAT’s Defence and National Security Policy Division, has a focus on building the preventative architecture in the Indo-Pacific. It takes forward, in part, the role of the former conflict and fragility branch closed in 2020. Beyond the new branch, informal knowledge networks exist within DFAT on conflict and fragility issues. Further organising this knowledge base would better support strategic objectives to use development co‑operation to build and protect regional stability. While specific training at the Diplomatic Academy considers humanitarian principles, it does not cover the conflict prevention aspect of development co‑operation (DFAT, 2025[114]). Integrating this dimension into the Diplomatic Academy’s training would be relevant as geopolitical tensions increase and DFAT’s human and financial resources remain under pressure. This would support the development of a sustainable in-house knowledge base and culture of conflict-sensitive development co‑operation, particularly in contexts of staff turnover and rotation (See also Fit-for-purpose systems).

Australia delivers effective humanitarian response, while its refugee policy remains controversial

With its stable partnerships with Australian NGOs and quality funding, Australia is well placed to support populations affected by conflict or disaster. DFAT has a dedicated humanitarian budget, with the 2025/26 federal budget allocating AUD 505.3 million (approximately USD 331.4 million) for humanitarian assistance, with an overall estimated spend of AUD 709 million (USD 465 million) when bilateral, regional and other government department spending is included (AHP, 2025[115]). This reflects an increase. Australia’s self-assessment highlighted that both the overseas network and different programme areas in DFAT are managing a high and in many cases increasing workload given emerging priorities (DFAT, 2025[49]). Further attention to staffing and human resourcing within the department is therefore warranted considering also the different staffing models that humanitarian assistance necessitates. This includes the need for surge capacity and to manage for health and psychological impacts. Benchmarking staffing levels against partner organisations working in contexts of emergency response may be useful.

Geographic isolation and limited capacities of some partner countries shape Australia’s humanitarian approach in the region. Pacific SIDS face structural barriers to securing full preparedness and response capacity for natural disasters, and international partners struggle to justify the level of investment required, given small population sizes and costs of delivery. The current financial crisis affecting the multilateral and development system, along with demands for greater economic efficiency, compound these barriers. Integrating Australia’s support for partners’ disaster preparedness into Pacific regional security architecture is one way Australia is tackling this (Pacific Islands Forum, 2018[93]).

Australia deploys its own national disaster response system to partners whilst empowering regionally and locally owned responses. Australia deploys its maritime, aviation and engineering capacities as needed and as part of its Civil-Military Disaster Response Mechanism. This was evident in response to the 2022 Hunga Tonga-Hunga Ha‘apai volcanic eruption and tsunami when Australia provided significant civil-military resources (Australian Government, 2022[116]). The National Emergency Management Agency of Australia can deploy medical teams – in co-ordination with the Department of Health, Disability and Ageing – as well as search and rescue teams to support crisis response when requested. With the Pacific Community, DFAT supports the Pacific Humanitarian Warehousing Program which helps countries in the Pacific and Timor-Leste to build their national humanitarian warehousing capability (Pacific Community, 2024[117]). Australia also supports local responses, not only through National Emergency and Disaster Management Offices (NEDMO) but also through partners’ national social security systems (e.g. in Tonga following the COVID-19 pandemic). This is a good example of partnership that is locally owned and empowers national responses. Australia also makes use of its strong relationships with managing contractors for its Humanitarian Logistics Capability programme (DFAT, 2025[118]), which includes logistics and infrastructure, but also serves as an instrument of public diplomacy and soft power. While technical, such logistics programmes necessitate government oversight and management to ensure alignment with Australia’s strategic objectives, avoiding that they are entirely handed to commercial providers (Strategic Development Group, 2022[119]).

In line with its locally led commitments, Australia recognises that first responders are often found at community level. Engaging with communities, the Disaster READY programme led by DFAT since 2017 is part of the Australia Humanitarian Partnership (AHP) and is both a climate change adaptation and disaster risk reduction and resilience programme (AHP, 2025[120]). Now in its second phase, the programme aims to ensure inclusion in the design of preparedness and response models with a strong focus on GEDSI as well as climate resilience, given the link established by DFAT between climate and disaster risks (DFAT, 2024[113]). This programme is a good example of how Australia integrates different priorities coherently. To deliver on these priorities effectively, Australia must ensure its AHP partners continue to support diverse stakeholders such as community leaders and faith-based organisations to maximise their critical role as first responders.

Australia is using its diplomatic weight in an effort to protect International Humanitarian Law, in a context of widespread impunity for perpetrators of violations across the globe. Australia acknowledges that the humanitarian response system is in crisis and that the increasing disregard for International Humanitarian Law fundamentally undermines the humanitarian system and international rules-based order. Australia fully supports the UN humanitarian reform process in mobilising its multilateral diplomacy, joining forces with a diverse group of countries to elevate the protection of humanitarian personnel (Minister for Foreign Affairs, 2024[121]). In September 2025, these efforts led to a global Declaration for the Protection of Humanitarian Personnel, signed by more than 100 countries (Minister for Foreign Affairs, 2025[122]). This declaration highlights Australia’s capacity to advocate and influence when it comes to global issues and in multilateral fora. At a time where humanitarian workers critically need allies and justice, Australia’s continued diplomatic efforts are to be praised and, moving forward, should redouble, notably on fighting impunity.

Deportation of asylum seekers to Nauru remains a contested issue and raises policy coherence questions regarding Australia’s human rights obligations. Under Australia’s current legislation (Parliament of Australia, 2024[123]), asylum seekers who seek to arrive in Australia by boat are not eligible for permanent resettlement in Australia even if they are recognised as refugees. To implement this policy, Australia has established bilateral arrangements with Nauru (DFAT, 2021[124]) to facilitate the transfer to a regional processing centre in a third country of what the Australian government deems unauthorised maritime arrivals. Under current arrangements, assessment of protection claims is managed by the Government of Nauru. These measures externalise the assessment and provision of international protection for refugees, asylum seekers and stateless persons and are subject to persistent criticism from civil society, human rights defenders and the United Nations (UNHCR, 2024[125]). The policy has faced internal and external scrutiny from domestic and international bodies including the significant budget implications that the offshore immigration detention system demands in contrast to falling allocations to support asylum seekers in Australia (ASC, 2025[126]). Australia insists that it is delivering a migration management programme in line with its human rights obligations while also ensuring a robust border security programme. Nevertheless, the tensions raised present a policy coherence issue for Australia as a vocal human rights defender and supporter of the UN humanitarian system (see also Australia as a global actor).

Australia effectively supports gender equality, disability and social inclusion with a targeted set of diplomatic, policy and financial tools

Gender equality, disability and social inclusion (GEDSI) is a recognised marker of Australia’s international co‑operation. Australia recognises that cohesive societies are key features of stability and is a leader among DAC members in promoting gender equality. Australia has developed clear GEDSI policies to support both dedicated programming and mainstreaming through broad consultation including with individuals exposed to systemic inequalities. These policies are integrated across Australia’s development co‑operation policy and are also grounded in a locally led approach, for example, through support to local actor platforms.64 Involving DFAT’s partners at the design stage has enabled them to embed strategies into their own ways of working more naturally, and cross-government engagement ensures that GEDSI is also integrated across Australia’s foreign policy, rather than being treated as a standalone sectoral or exclusively development co-operation issue. For example, GEDSI is also fully embedded in security and defence co‑operation with Australia’s partner countries, as seen in Timor‑Leste (Australian Government, 2025[127]). While evaluations indicate that disability inclusion is less well integrated than gender equality by DFAT’s partners, the elevation and resourcing of this priority provides a solid foundation for continued progress (Australia-Indonesia Partnership in Disaster Risk Management, 2023[128]; Alinea, 2022[129]) (Figure 10).

Australia tactically leverages its influence, funding and partnerships to steer global attention towards GEDSI. Australia advocates and encourages strengthened approaches to GEDSI in the multilateral system (see Box 9). Designating thematic ambassadors, for example, the appointment of an Ambassador for Gender Equality to champion women's rights, inclusive trade and leadership across the Indo-Pacific (DFAT, 2025[130]) helps to place the concerns and priorities of both Australia and Pacific countries on the global policy agenda. This also highlights the relevance of recent investments in building and ensuring staff and partner have access to in-house technical expertise, to keep a policy priority alive throughout Australia’s international engagement. DFAT has also invested in strengthening the quality of its statistical reporting on GEDSI since it started reporting against the disability policy marker in 2019.

Figure 10. Australia’s reporting against the gender equality and disability policy markers
Copy link to Figure 10. Australia’s reporting against the gender equality and disability policy markers

Building on Australia’s leadership on gender equality, more could be done to address intersecting forms of inequalities including those based on income, wealth and economic marginalisation to alleviate poverty. While Australia’s long-term focus on GEDSI is notable, its effort to address vertical inequalities is less marked. Equitable economic growth and poverty reduction are objectives in Australia’s development policy (DFAT, 2023[21]) and in many DPPs, particularly with Southeast Asian countries. Yet tangible pathways, measurable targets and accountability mechanisms to ensure that growth is truly inclusive across income distributions remain underdeveloped. Economic co‑operation through private sector development and an enabling business environment is a sound policy for Australia in a region that has become a centre of the global economy (DFAT, 2023[131]). However, without explicitly combining growth and wealth disparities, there is a risk that Australia’s development efforts overlook an important driver of fragility. For example, persistent rural inequality in Asia undermines social cohesion, exacerbates economic instability, and impedes sustainable rural development (Imai and Malaeb, 2018[132]). Australia’s focus on inclusion could be broadened to more explicitly address intersecting forms of inequalities, including those based on income, wealth and economic marginalisation.

While resources have been put in place, the LGBTQIA+ strategy is delayed. In 2023, DFAT launched the Inclusion and Equality Fund to support LGBTQIA+, civil society and human rights defenders across Asia and the Pacific (Minister for Foreign Affairs, 2023[133]). With an AUD 3.5 million (USD 1.6 million) budget, it marked the first dedicated fund of its kind in the region. DFAT initiated a comprehensive consultation to develop a formal LGBTQIA+ human rights engagement strategy, which was also valued by partners. The strategy’s postponed release marks a missed opportunity for Australia given its advocacy and leadership as a human rights defender.

Integrating First Nations perspectives into Australia’s foreign and development policy continues to be a nascent area of work. Through the department’s Indigenous Diplomacy Agenda, Indigenous Engagement Plan and initiatives of key staff, DFAT has made more explicit efforts to address global Indigenous inequalities and to better integrate First Nations’ knowledge and perspectives into its programmes in line with the 2023 IDP. Recent actions include the appointment of an Ambassador for First Nations People in 2023, development of a First Nations International Engagement Strategy, and recent guidance on First Nations engagement in development co-operation (DFAT, 2025[134]). The Ambassador works with the Office of First Nations Engagement within DFAT with a mandate to work across government.65 Australia’s trade work in particular has a clear First Nations workstream and includes initiatives to link First Nations business owners with international trade opportunities (DFAT, 2024[135]). Research by the Australian Centre for International Agricultural Research (ACIAR) on Indigenous food systems is a further example of priorities being taken forward (ACIAR, 2025[136]). However, it is less clear to what extent DFAT is integrating the findings of the research and First Nations knowledge it supports back into programming and decision making.

Political leadership and protecting staff time to build cultural competence and skills are important enablers to ensure policy commitments are translated into practice. Learning from other OECD DAC members highlights that ensuring efforts to integrate First Nations knowledge, expertise and skills is most effective when this “starts at home”. This means seeing the genuine integration of First Nations’ worldviews, knowledge and frameworks as an invitation and opportunity to build more sustainable and genuine partnerships, rather than a challenge. Protecting staff time to build necessary cultural competence and skills and ensuring the right incentives are in place are also important enablers to ensure policy commitments on integrating First Nations knowledge and perspectives can be translated into practice.66 Continuing to embed recent DFAT efforts into the department’s ways of working and securing continued buy-in and support at all levels will help advance the pace and sustainability of these efforts. Continued cross-government and expertise exchange, including with the National Indigenous Australians Agency, will also be valuable.

Box 9. Australia supports the rights and inclusion of people with disability

Copy link to Box 9. Australia supports the rights and inclusion of people with disability

An estimated 1.3 billion people – about 16% of the global population – currently experience significant disability. This number is increasing due in part to population ageing and an increase in the prevalence of non-communicable diseases. Australia is one of few DAC members that has a specific focus on disability inclusion as part of its development co-operation policy, based on a set of key enablers and commitments:

Australia’s third strategy on disability inclusion, equity and rights. Beyond inclusion of people with disability, the latest strategy launched in 2024 insists on equity and rights. It focuses on removing barriers for people with disability so that they can fully and equitably participate in and contribute to society.
Australia understands that such an endeavour is multigenerational and commits to long-term support. Australia has already demonstrated its engagement over the long term through its increasing commitment to disability inclusion since it was first introduced as a policy priority in 2008.
Disability is integrated across all aspects of Australia’s international engagement beyond development co-operation. It is embedded into Australia’s foreign policy, overall development co‑operation strategy, humanitarian policy, other thematic guidance and good practice notes, such as on climate change, and is also clearly articulated in its own standalone policy document.
The new integrated approach gives Australia confidence for setting ambitious targets. Australia has set a performance target on disability equity in its international development programme: this comprises a phased target of 60% of development and humanitarian investments performing effectively on disability equity by 2026, and a target of 70% by 2030 is set in the standalone strategy. Progress is assessed through DFAT’s annual Investment Performance Reporting which uses the OECD policy marker on disability introduced in 2018.
Credibility as an advocate. Long-term commitment, coherent policies across departments, building alliances with other DAC members, leveraging its influence in the multilateral system – including by vice-chairing the UN Committee of the Rights of Persons with Disabilities – consistent funding and building partnerships have helped Australia steer global attention to disability inclusion.

Improving disability inclusion is a generational project – it requires changes in beliefs and attitudes. While progress to date remains limited, it comes after more than two decades of advocacy.

Sources: WHO (2023[137]), ”Disability”, https://www.who.int/news-room/fact-sheets/detail/disability-and-health; DFAT (2021[138]), “Disability Inclusive Development Guidance Note”, https://www.dfat.gov.au/about-us/publications/disability-inclusive-development-guidance-note;. DFAT (2024[139]), “Australia’s International Disability Equity and Rights Strategy: Advancing equity to transform lives“, https://www.dfat.gov.au/publications/publications/australias-international-disability-equity-and-rights-strategy-advancing-equity-transform-lives.

Risks related to climate change are well understood, but more could be done to meet Australia’s fair share of climate finance

Climate change is a threat multiplier in the Indo-Pacific and Australia aims to position itself both as a credible financing partner and advocate, particularly for SIDS. These efforts are underpinned by a climate change action strategy (DFAT, 2019[140]), a pivot towards climate diplomacy that brought Australia back into the Green Climate Fund in 2023, and the establishment of more ambitious targets. From financial year 2024/25, Australia aims for at least 50% of all new bilateral and regional ODA investments valued at more than AUD 3 million to include a climate change objective, with a goal of reaching 80% in financial year 2028/29 (DFAT, 2025[141]). DFAT also mobilises several cross-government departments and agencies to work with partner country stakeholders on climate change adaptation and mitigation. This diversity of actors is valuable in increasing the knowledge base for more effective programming.67 Given the specific vulnerability and isolation of SIDS in the Pacific, Australia importantly places an emphasis on regional solutions (Pacific Islands Forum, 2023[142]). The Falepili Union treaty, with its climate-related migration component, is also an innovative way that Australia acknowledges the specific vulnerability to climate change of Tuvalu (see Box 1 on the growing use of treaty instruments).

Australia’s climate finance commitments are largely from within the ODA budget rather than being additional, and Australia’s policy focus on biodiversity is no longer reflected in its financing. In 2023, Australia committed 46.6% of its total bilateral allocable ODA (USD 2.4 billion) to activities focused entirely or partially on climate change, compared to the DAC average of 36%. This is an increase compared to an average of 22.4% over the 2013-2022 period (when the DAC average was 25.3%), putting Australia on track to reach its objective from 2024. At COP29 in 2024, Australia strengthened its climate finance commitment and now expects to deliver AUD 3 billion (USD 2 million) in global climate finance over 2020‑2025, largely through existing ODA commitments (OECD, 2025[143]). At the same time, the share of Australia’s ODA that targets biodiversity has declined significantly since 2018, from 8.7% of screened ODA in 2018-19 to just 4.4% in 2022-2023 (Figure 11). Well below the DAC average (7.7% in 2022‑23), this also contrasts with Australia’s stated focus on nature-based solutions. The sharp decline is reflected both in volume of ODA and across significant and principal objectives (OECD, 2025[16]).

Figure 11. ODA that targets biodiversity has declined significantly
Copy link to Figure 11. ODA that targets biodiversity has declined significantly

The lack of additionality creates risks for Australia and its partners. The climate finance targets set by Australia increase the share of programming that targets climate change objectives but also sustains Australia’s reliance on its ODA budget for climate finance. This contradicts the global call for “new and additional” sources of climate finance, beyond existing development commitments and questions the extent to which Australia’s climate commitment represents its “fair share” (Ledger and Klöck, 2023[145]). The lack of additionality can also present a risk to Australia’s most vulnerable partners when they graduate from ODA, potentially limiting their access to Australian climate finance (OECD, 2024[146]). For a contested region such as the Indo-Pacific, climate finance, like development co-operation, is a tool of influence (CSIS, 2025[147]) and the additionality of climate commitments is viewed as a strategic signal of credibility (Victor, Lumkowsky and Dannenberg, 2022[148]).

While Australia plays a key role in supporting SIDS to access climate finance, greater innovation is needed. SIDS are eligible for major global climate finance mechanisms, including the Green Climate Fund and the Global Environment Facility, as well as the Adaptation Fund and the Climate Investment Funds. However, many of Australia’s Pacific partners face structural and capacity-related challenges in meeting access requirements (OECD, 2023[149]; UNDESA, 2024[150]). Australia is supporting its partners to strengthen their national institutions for greater and more timely access to global funds. Bilateral support for climate resilience programmes through initiatives such as the Pacific Climate Infrastructure Financing Partnership, which is delivered through the Australia Infrastructure Financing Facility for the Pacific (AIFFP, 2025[151]), also reinforces Australia’s regional influence. Going forward, further opportunities may include aggregating small-scale projects to meet global funding thresholds and scaling up blended finance approaches (ADB, 2025[152]).

Recommendations

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Building on Australia’s leadership on gender equality, disability and social inclusion, DFAT should continue championing gender equality while also stepping up efforts to support partners in addressing intersecting forms of inequalities, including economic inequality.

See also recommendations under “Fit-for-purpose systems in a time of rapid change”

Scaling up innovative finance and investments in infrastructure

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A measured approach to scaling up Australia’s blended finance work has enabled DFAT to build a solid foundation for further ambition

Australia has accelerated efforts to look beyond ODA to deliver development outcomes in the Indo‑Pacific. Both the 2023 IDP and former development policy, Partnerships for Recovery (2020), committed to using ODA and other policy tools to leverage private sector finance and grow markets in Australia’s region. Key initiatives included the Emerging Market Impact Investment Fund (EMIIF) pilot (2021-2022) (Alinea, 2022[153]) and the Australian Infrastructure Financing Facility for the Pacific (AIFFP) established in 2019. Several other mechanisms are being strengthened or expanded. Following a recommendation of the 2023 Development Finance Review, the government established Australian Development Investments (ADI) with a capitalisation of up to AUD 250 million (USD 165 million), to provide early-stage concessional finance to impact investment funds with a focus on climate and gender equality outcomes. ADI’s recent expansion to the Pacific included revised performance targets in acknowledgement of nascent private markets and a more difficult investment environment in the region. Retaining the focus on additionality as ADI scales up is an important ambition. In addition to its bilateral mechanisms (Table 2), Australia also makes smaller investments, such as via the Global Infrastructure Facility and the Global Convergence Blended Finance Design Window, to facilitate technical assistance for project preparation (DFAT, 2023[154]).

A commitment to review and adjust as efforts mature guides DFAT’s approach to blended finance instruments. While most of Australia’s blended finance instruments are relatively new, pilots have generated useful learning, which DFAT is applying in the design of subsequent programmes. A 2022 Review of DFAT's Blended Finance Investments (DFAT, 2022[155])68 pointed to DFAT’s openness to innovation with several programmes taking an experimental approach. DFAT has also strengthened its capacities and expertise through the recruitment of skilled staff including from multilateral development banks (MDBs) and ensuring an enabling environment for innovation and iteration in relation to this work.69 Further planned reviews and strategic evaluation, including of AIFFP, will be important to generate ongoing learning and inform further adjustments.

Reflections on whether to create an Australian-owned development finance institute (DFI) to manage and deliver the growing blended finance portfolio remain ongoing. Australia has established a set of diverse instruments that focus on additionality and reflect different contexts, needs and opportunities in the Pacific and in Southeast Asia. A key challenge is how to bring these together to support scaling, ensure strategic coherence, address risks of fragmentation, and centralise expertise and learning across government to lead and manage Australia’s development finance mechanisms. The 2023 Development Finance Review found that creating a new Australian DFI “would not generate material benefits … that clearly outweighed potential costs” (DFAT, 2023[154]). The review notes that while Australia could establish a DFI out of existing mechanisms, doing so would impose complexity given the breadth of objectives and approaches. Following the review, DFAT established a dedicated Blended Finance and Investor Engagement Unit and established the permanent International Development Finance Advisory Committee (IDFAC) in 2023 comprised of government and finance sector experts. These are helping to address several of the review’s recommendations, including efforts to engage with philanthropic organisations and impact investors. Continuing to resource and empower the unit and strengthening efforts to build the ecosystem in Australia’s private sector will be important.

	Australian Development Investments (ADI)	Australian Infrastructure Financing Facility for the Pacific (AIFFP)	Australian Climate Finance Partnership (ACFP)	Investing in Women	Private Infrastructure Development Group (PIDG)
AUD COMMITMENT	AUD 250 million	Up to AUD 4 billion Of which: loans up to AUD 3 billion and grants up to AUD 1 billion in ODA.	Up to AUD 140 million	AUD 82 million	AUD 191 million ODA AUD 155 million non-ODA
OBJECTIVE	Build markets and investment pathways into the region. Focus on SMEs active on climate and gender equality.	Long-term investment in infrastructure to advance Australia’s national interest through a stable, prosperous Pacific.	Catalyse private sector investment in low-emission, climate-resilient solutions.	Catalyse private investment in women-owned and -led SMEs.	Encourage private sector-led infrastructure projects.
INSTRUMENT	Early-stage and concessional loan investment in impact investment funds.	Loans, grants, guarantees and equity. Loans may be to sovereign, state-owned enterprises or private sector partners.	Debt (USD and local currency), equity, quasi equity and mezzanine financing, guarantees/risk sharing, TA.	TA, loans, equity, grants	Concessional equity, concessional debt, guarantees, TA.
GOVERNANCE	Managed and financed by DFAT. Implemented by Sarona Asset Management.	AIFFP Board. Grant financing approved by Foreign Minister and Minister for Pacific Island Affairs. Loans approved by government, disbursed by EFA.	Managed by ADB.	Managed and financed by DFAT.	Managed by PIDG, DFAT part of the overarching governance framework as a shareholder.
GEOGRAPHY	Indo-Pacific	Pacific and Timor-Leste	Pacific Island countries and Southeast Asia	Indonesia, Viet Nam, Philippines	South and Southeast Asia

Note: TA = Technical assistance; SMEs = Small and medium sized enterprises; EFA = Export Finance Australia.

Source: DFAT (2019[156]), Australia Infrastructure Financing Facility for the Pacific Investment Design, https://www.aiffp.gov.au/sites/default/files/2020-12/Induction%20pack%20AIFFP%20DESIGN%20DOCUMENT_0.PDF; DFAT (2023[154]), Development Finance Review: New approaches for a changing landscape, https://www.dfat.gov.au/sites/default/files/development-finance-review-2023.pdf; information provided by the Australian Government in the context of the peer review.

As Export Finance Australia (EFA) plays a growing role in delivering Australia’s development finance in the Indo-Pacific, ensuring alignment with development priorities will be important for collaboration and development impact. EFA is Australia’s export credit agency, providing commercial finance for Australian export trade and overseas infrastructure development that benefits Australia. It engages with small and medium-sized enterprises (SMEs), large corporations, foreign governments and infrastructure projects with a focus on Australia’s economic security and regional resilience. EFA administers the Australian Government’s National Interest Account,70 which currently includes the Southeast Asia Investment Financing Facility, the Critical Minerals Facility, the Defence Export Facility and lending for AIFFP. Most recently, EFA has also been granted the power to issue guarantees and provide equity to complement AIFFP loans. Recognising the mandates of EFA and Australia’s development co‑operation blended finance work, and as Australia explores the institutional arrangements for its growing blended finance portfolio, civil society have cautioned against any expansion of the role of EFA in development financing activities (ACFID, 2023[157]). The most recent public comprehensive review of AIFFP also identified challenges in relation to balancing EFA’s and AIFFP’s requirements, including differing expectations regarding the cost of loans and competitiveness compared to other financiers and parallel safeguard processes that can create additional complexity and inefficiency (Davis and Beghin, 2022[158]; DFAT, 2022[159]) (see below on institutional structures).

Australia’s growing infrastructure investments reflect both geopolitical priorities and real needs in its partner countries

Australia’s national interest and bilateral relationships shape its growing focus on infrastructure in the region. While significantly stepped up in recent years, Australia has had an infrastructure investment strategy since 2015 with a relatively diverse range of approaches including advisory services and technical assistance (e.g. Partnerships for Infrastructure); shaping infrastructure norms and standards (e.g. the Blue Dot Network); direct infrastructure project financing and delivery support; and regional capacity building (e.g. through the South Asia Regional Infrastructure Connectivity Program). Established in 2019, AIFFP has brought both additional focus and resourcing to these efforts and has been granted an explicit mandate of making Australia a “partner of choice” for infrastructure needs in the Pacific and Timor-Leste.

AIFFP has become a significant development financing vehicle for Australia. After an initial capitalisation of AUD 2 billion in 2019, as of October 2025, AIFFP has access to up to AUD 3 billion in loans and up to AUD 1 billion in ODA grants. Loans may be to sovereign, state-owned enterprise or private sector partners. The facility currently finances or cofinances 57 individual infrastructure and climate projects in 11 Pacific countries, with a focus on maritime, airport, energy and transport infrastructure.71 DFAT’s overseas diplomatic staff have an important role in delivering AIFFP funding, including liaising with counterparts during project origination and reporting to Canberra. Advice provided by overseas staff on potential projects is expected to inform recommendations to Ministers by the AIFFP Board. Overseas posts also provide complementary capacity building and policy reform support to accompany AIFFP project implementation, and AIFFP is expected to work closely with them to ensure complementarity.

Ensuring access to the necessary skills and expertise to deliver AIFFP remains important. At its establishment, DFAT was expected to implement a capability plan to ensure the department has access to the skills and experience needed to deliver the AIFFP over the long term (DFAT, 2019[156]). The DFAT-based AIFFP front office is led by a DFAT Senior Executive Service (SES) officer and staffed by DFAT staff, whole-of-government secondees and contracted experts. The EFA-based back-office conducts credit assessments and establishes, conducts, finalises and monitors AIFFP loan agreements, including repayments (DFAT, 2019[156]). AIFFP funding is expected to reflect lessons learned from infrastructure investments undertaken by DFAT and other donors; seek opportunities to address climate and disaster resilience; and apply DFAT policies on gender equality, disability and social inclusion, DFAT branding, environmental and social safeguards, monitoring and evaluation, and risk reduction (DFAT, 2019[156]). A series of system-wide reviews of AIFFP have contributed to strengthening its models and systems to support these objectives.72 The planned three-year review of AIFFP in the 2025-26 DFAT evaluation plan, now planned for 2026-27, will be important to assess the extent to which AIFFP’s institutional set up and operating model, including as it relates to EFA, enables it to deliver on its commitments to safeguarding, alignment with the policy goals of the 2023 IDP and ability to deliver its long-term objectives.73

Figure 12. Operating model of the Australian Infrastructure Financing Facility for the Pacific
Copy link to Figure 12. Operating model of the Australian Infrastructure Financing Facility for the Pacific

A strong focus on local content and sustainable procurement offers good practice. Local procurement has become a key objective of Australian development co-operation, notably through AIFFP. Australia aims to align its infrastructure investments with the Pacific’s priorities as articulated in the Pacific Islands Forum's 2050 Strategy for the Blue Pacific Continent and the Pacific Quality Infrastructure Principles (PIF, 2024[161]), which emphasise the importance of local content. The main channel used by Australia to promote local procurement is through sub-contracting. In particular, Australia encourages managing contractors to sub-contract locally and requires them to report back on the value and number of subcontracts (see also Box 10 and Box 11). These efforts to promote local procurement are a strong example of Australia aligning with development effectiveness principles and supporting efforts to build local private sector development and ownership, in line with Australia’s locally led development commitments. Australia has also become influential in driving local content and sustainable procurement practice in MDBs. For example, Australia’s emphasis on local procurement has informed and driven change within the Asian Development Bank and World Bank. Australia also actively shares its practice with the DAC’s Working Party on Development Statistics, which is valuable in helping to inform practice by other members (Box 10).

Box 10. Local content in infrastructure investments in the Pacific

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By placing quality standards at the centre of its infrastructure investments, Australia can provide a differentiated offer to partner countries.

In line with Australia’s 2023 International Development Policy and commitments on locally led development, AIFFP promotes and prioritises opportunities for local workers and companies to ensure its projects maximise local content opportunities across the full life cycle of AIFFP engagement. This spans from design, procurement and construction, to operations and maintenance.

Local content and industry participation plans

Each AIFFP project design is required to have a Local Content and Industry Participation Plan. The plans outline how the project will encourage local involvement, procurement and training opportunities.

In addition to the plans, AIFFP also supports industry‑delivered, on-the-job training to build additional skills where required, partnering with training providers to develop work experience opportunities for local trainees or recent graduates.

For small scale civil works projects, AIFFP seeks to employ an entirely local workforce with 100% of expenditure remaining in the national economy. Australia explicitly recognises and accepts that prioritising the building of technical skills in the local workforce has its challenges, such as slowing implementation. However, the long-term economic and social benefits are considered to outweigh these challenges. Establishing clear incentives and policy tools more effectively supports project teams and decision makers to manage such trade-offs when delivering on development impact objectives.

According to the latest annual update (financial year 2023/24), AIFFP has supported the creation of at least 698 direct local jobs since its inception. For example, in the Tuvalu enhancing boat harbours project, DFAT reports that, as of 2023, 19% of the project’s workforce were Tuvaluan with 23% of labour hours performed by Tuvaluans. An additional 50% of labour hours were performed by Pacific expatriates, with Fijian companies engaged to supply materials to the project such as precast concrete.

Source: AIFFP (2025[162]), Australian Infrastructure Financing Facility for the Pacific: Annual Update July 2023 - June 2024, https://www.aiffp.gov.au/sites/default/files/2025-02/AIFFP_REP_Annual%20Report%20SPREADS_006_20250212.pdf; information provided by the Department of Foreign Affairs and Trade in the context of the peer review.

Box 11. Sustainable procurement in Australia’s development spending

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Tracking contract and subcontract level performance through PERFORMS

DFAT’s Project Electronic Recording of Financial and Operational Reports Management System (PERFORMS) enables it to gain information at the contract and subcontract level on procurement, employment and financial data across Australia’s development programme.

The data collection mechanism is an annual questionnaire to prime contractors with a commercial contract over AUD 3 million. Filled out via an online system (SmartyGrants), questions focus on financials, personnel, subcontracts and results data. For financial year 2022/23 data was collected from 29 contractors on 115 programmes comprising over 300 contracts and subcontracts, with a total value of approximately AUD 7.9 billion.

In setting-up the PERFORMS system, two trials were conducted on DFAT’s 29 largest contracts with 15 suppliers/contractors to test availability and usefulness of data. Contractors participated in a workshop to discuss system requirements and data, with a further week spent reviewing the questionnaire and three to four weeks to submit programme data.

DFAT identified four key lessons that could be useful when establishing such a system.

Have a clear policy hook: Having a clear objective that neatly tied into the government’s policies and priorities helped in getting approval and support for the project. Demonstrating how this system would assist in better development programme analysis, as well as tracking government priorities and policies such as gender equity and localisation was vital.
Consult stakeholders: Consultations were held with stakeholders at various levels, within DFAT and with contractors. This included workshops to outline key benefits and understand what information is readily available or can be easily collected.
Conduct extensive trials to test the system: Before the system was officially launched, DFAT conducted two trials collecting six‑monthly data on DFAT’s 29 largest contracts from 15 contractors. This provided an opportunity to fully test the system and make required changes. It also enabled contractors to spot gaps in their systems when providing some required data.
Make iterative changes as required: Building the questionnaire on a system that can be easily amended ensures that future changes to the questionnaire (adding and deleting questions) are simple to administer. The SmartyGrants platform is administered internally by DFAT, enabling streamlining without extra cost. For example, DFAT added questions to enable data collection on new policy directions or requirements such as COVID-19’s impact on personnel movement.

Most PERFORMS data is commercial-in-confidence or falls under the Commonwealth Privacy Act 1988. Data is therefore shared when in aggregate only. Dashboards are developed around key data points to provide an overview of commercial contracts in a country/region. These serve a range of purposes, such as: a benchmark for value for money considerations in procurement as well as agreement management decisions, reporting on local personnel and subcontractors for tracking local content and localisation commitments, and for ministerial and executive reporting.

Source: Information provided by the Department of Foreign Affairs and Trade to the OECD Secretariat and to the DAC Working Party on Statistics (WP-Stat).

Continued focus on quality and development outcomes will require strong steering in DFAT

Continued attention to debt levels and collaboration to overcome delivery challenges will be important to ensure sustainability. Staff in Australia’s overseas posts highlight the value of the additional opportunity and resource AIFFP has provided to meet the development needs of partner countries, particularly in a context of constrained development finance. Feedback indicates that the instrument is relevant to both Australia and its partners’ priorities. However, many Pacific partners have reached their debt ceilings and AIFFP is nearing its grant-based limits, posing a significant challenge. To mitigate the risk of contributing to debt distress, AIFFP has aligned its lending to debt sustainability analyses of key partners. As of September 2025, informed by the International Monetary Fund’s (IMF) analysis, six Pacific countries are restricted to grant only eligibility. With AUD 2 billion in loans uncommitted, and a limited pool of eligible countries, AIFFP faces difficulty identifying additional loan-worthy projects. For example, during the review team’s visit to Timor-Leste – where AIFFP has three ongoing projects – stakeholders spoke to a government decision to not currently accept further loan financing. This also raises questions about whether AIFFP’s focus on large-scale infrastructure loans adequately supports the need for local-level climate adaptation infrastructure in the Pacific. The fact that AIFFP financing is largely delivered through Australia’s overseas posts helps manage these risks, ensuring country teams play a strong role in shaping projects. Increasing the proportion of grant funding may help to better align financing with Australia’s approach and partner needs. However, this would likely require an increase in Australia’s overall ODA budget.

In a contested geopolitical context, Australia’s infrastructure work will require continued focus on quality, navigating partner-led priorities, and a focus on long-term goals. Partners recognise the geostrategic contexts that shape drivers of Australia’s infrastructure investments, such as the AIFFP-funded undersea cable projects connecting to Kiribati, Federated States of Micronesia, Nauru, Palau, Tonga and Tuvalu (see Box 7) and the AUD 621 million Papua New Guinea ports upgrade programme (Fletcher, 2022[163]). Importantly, consultations with stakeholders in Timor-Leste and Tonga indicated that government partners see Australia’s investments in infrastructure as investments in and for the security of the region as whole. Nevertheless, ensuring development impact through significant infrastructure spending will rely in part on a robust, well-resourced development programme and leadership in DFAT. This will ensure that these investments drive towards and see development impact as central, and are effectively linked to and mutually supportive of other development investments. Continuing to strengthen development capacity and leadership within DFAT will therefore be important to the continued integration and quality of Australia’s infrastructure investments.

As Australia consolidates and scales its innovative finance approaches, a further evolution in the institutional structure may be warranted

Efforts to balance an institutional reliance on EFA with AIFFP’s development mandate will require ongoing flexibility. Given the nature of AIFFP’s competitors – many of which offer concessional loans below their cost of funds – AIFFP must offer sovereign loans with interest rates that are as competitive as possible. Previously, EFA, which operates the National Interest Account under Government direction, had been required to do so on a commercial basis. Government policy also mandated that AIFFP loans cover EFA’s costs for funding and administering the loans, thereby protecting the profitability of the National Interest Account. The updated Statement of Expectations issued to EFA in March 2025 softened this requirement and acknowledges that National Interest Account transactions, being owned by the Government but administered by EFA, are subject to the Trade and Tourism Minister’s direction. This provides more flexibility in loan terms. It is also no longer expected that AIFFP loans cover EFA’s costs for funding and administering loans. While AIFFP and EFA staff maintain strong working relationships, structural challenges were highlighted in AIFFP’s two-year system-wide review (Davis and Beghin, 2022[158]). To address these challenges, each loan is now priced on a loan-by-loan basis and AIFFP’s financing terms can be negotiated to achieve a suitable level of concessionality (AIFFP, n.d.[164]). To ensure necessary flexibility, some agencies such as Agence Française de Développement (AFD), the Japan International Cooperation Agency (JICA) and Germany’s KfW choose to assign the mandate to institutions capable of raising funds from the market and issuing government-backed loans. Another possibility is to leverage existing partnerships with multilateral development banks (MDBs) using hybrid capital, which would allow Australia to stretch its balance sheet. However, this approach may limit the ability to support investments with less obvious commercial returns, such as infrastructure that promotes democratic governance.

Recent evaluations have pointed to the need to further strengthen the linkages between Australia’s blended finance, infrastructure spending and other development programming. A further structural challenge facing Australia’s innovative finance efforts relates to ensuring coherence between ODA and non-ODA efforts as well as cross-learning at both portfolio and country level. Addressing silos across the development programme will be key to ensuring a sustainability lens on Australia’s growing non-ODA investments. This should include linking DFAT’s investments and engagement on governance and public financial management in partner countries with its blended finance and infrastructure initiatives. It also relates to the need to factor in long-term maintenance work, as in the case of infrastructure investments (Davis and Beghin, 2022[158]). Continuing to embed and invest in the integration of a development understanding and expertise across DFAT’s work overall will therefore be important to ensuring the continued effectiveness of its innovative finance (see Fit-for-purpose systems).

Tracking and demonstrating the results of Australia’s growing blended finance portfolio will also benefit from greater clarity of goals. The 2022 review of Australia’s blended finance initiatives found that DFAT was not yet equipped to capture the full extent of impacts from the portfolio. This included clearly defining the desired long-term change, specifying sufficient metrics, developing the systems and tools to support long-term data capture, and enlisting partner financial intermediaries to survey clients after funds are disbursed. Partners have also pointed to the lack of a clear theory of change relating to the development impact of some of AIFFP’s investments. Proving development additionality will require DFAT to build stronger, more ongoing impact measurement and management to track concrete benefits from investments. At the time of the peer review team’s visit, DFAT’s Blended Finance and Investor Engagement Unit was exploring avenues for portfolio-level reporting and for a consistent approach to monitoring and evaluation across financing instruments, suggesting scope to accelerate DFAT’s work in this area.

Further work on measuring impact and ensuring the complementarity between Australia’s ODA and non-ODA investments will be critical. DFAT recognises the need for further work on measuring and tracking the impact of its innovative finance work. A robust ODA envelope coupled with sound development capability are critical to helping ensure that Australia’s blended and innovative finance investments contribute to development impact (see also Fit-for-purpose systems in a time of rapid change). Investing in ex post impact assessments would strengthen the government’s ability to communicate on the longer term and sustainable value of AIFFP and related investments to the public, key stakeholders and parliamentarians. France’s Proparaco, Denmark’s Impact Fund and British International Investment, have developed relevant approaches, including ex post evaluation and in the case of Impact Fund Denmark, an impact measurement and management system, that may provide relevant learning.74

There remains a need for greater transparency around Australia’s blended finance initiatives. Australia has stepped up transparency around its ODA since the last peer review, which is welcome (see Fit-for-purpose systems and Annex A on Progress against the 2018 peer review recommendations). However, this does not yet fully capture the growing blended finance portfolio and other non-ODA investments. As recommended in the 2023 Development Finance Review and in accordance with the OECD DAC Blended Finance Principles and updated Guidance (OECD, 2021[165]), Australia has committed to greater transparency of its development financing portfolio, notably through a periodic public development finance portfolio update that includes reporting on development impact. Although a dedicated report has not yet been published, DFAT has included a dedicated chapter on development finance including blended finance in the 2023/24 annual Performance of Australian Development Cooperation report, with annexed investment details. Such transparency should include timely data and information on deals done and terms given, which could build on the AIFFP annual updates and would facilitate efforts to strengthen and improve the impact of investments. As Australia continues to shift its balance from ODA to non-ODA or ODA-like contributions to its partners’ development, it will need to explore and invest in related transparency efforts. A planned follow-up to the 2022 Review of DFAT's Blended Finance Investments is also expected to add to the evidence base on impact and results and make recommendations to enhance transparency.

Recommendations

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Building on Australia’s growing portfolio of infrastructure investments, DFAT should continue to prioritise access to procurement opportunities for local actors, manage for debt distress and ensure that poverty reduction is at the heart of the theory of change of all infrastructure investments.
As Australia expands its innovative finance tools, including through greater engagement with the private sector, DFAT should implement its commitments to transparency and reporting, continue to invest in relevant expertise and further reflect on the most effective architecture to deliver its innovative finance work.

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[106] V-Dem Institute (2025), “25 Years of Autocratization – Democracy Trumped?”, https://www.v-dem.net/documents/60/V-dem-dr__2025_lowres.pdf.

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[100] Vocus (2024), “Vocus and Google sign contracts to deliver Pacific Connect”, https://www.vocus.com.au/news/vocus-and-google-sign-contracts-to-deliver-pacific-connect (accessed on 30 October 2025).

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[62] World Bank Group (2025), Remittance Prices Worldwide Quarterly (March 2025), The World Bank Group, https://remittanceprices.worldbank.org/sites/default/files/rpw_main_report_and_annex_q125_1_0.pdf.

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[59] Zeng, P. (2025), “How storytelling through photos is challenging Australia’s migration narrative”, Australian National University, https://research.anu.edu.au/research-innovation-news/how-storytelling-through-photos-is-challenging-australias-migration (accessed on 30 October 2025).

Notes

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← 1. For example, the majority of respondents (70%) believe they can easily access public information and almost half of respondents (46%) feel able to participate in politics, though most limit their political engagement to voting. See “Drivers of Trust in Public Institutions in Australia” at https://doi.org/10.1787/28a876c2-en.

← 2. Close to 24% of wealth is held by the top 1% of Australians, well above peer countries such as the Netherlands (13%), Finland (18%) and the United Kingdom (21%). See: https://www.monash.edu/__data/assets/pdf_file/0006/3906186/MSDI-Transforming-Australia-SDG-Progress-Report-2024.pdf.

← 3. The Australian Government’s annual Closing the Gap report assessed 15 out of 19 socio-economic targets in 2025. It found that “Unfortunately, four targets are continuing to worsen, including incarceration rates for adults; children assessed as developmentally on track; children in out-of-home care; and, alarmingly, suicide rates. We have seen improvements in pre-school enrolment rates; economic participation; and land and water rights for traditional owners. Other outcome areas are showing improvements, although not at a sufficient rate to meet the relevant target by 2031, include life expectancy rates, healthy birthweights; school completion rates; post school education, youth engagement; and overcrowded housing. We are still unable to assess progress against access to essential services; family violence; languages being spoken; and internet access at home.” For more information, see: https://www.pc.gov.au/closing-the-gap-data/annual-data-report.

← 4. The reallocation comes primarily from three multilateral institutions and includes reducing a payment to the Global Partnership for Education and deferring funds earmarked for a Global Fund to fight HIV, malaria and tuberculosis. See: https://islandtimes.org/australia-pivots-foreign-aid-to-pacific-to-cover-u-s-cut/

← 5. The Australian Government's 2020 development policy Partnerships for Recovery: Australia’s COVID-19 Development Response and performance framework, outlined Australia’s approach to tackling COVID-19 in the Indo-Pacific, pivoting Australia’s development programme to focus on the pandemic. The performance framework identified three key areas for Australia’s contribution to development: health security, stability and economic recovery. The end of the 2022/23 financial year saw the conclusion of the policy. See: https://www.dfat.gov.au/development/australias-development-program/partnerships-recovery-australias-covid-19-development-response

← 6. The 2023 IDP notes that: “To ensure the policy delivers a program fit for our times, the Department of Foreign Affairs and Trade (DFAT) undertook extensive consultation with partner governments, civil society, and local organisations from across the Indo-Pacific, and around the world. We talked with more than 300 people from across the development sector in Australia and considered more than 200 public written submissions. DFAT established an External Advisory Group to provide contestability to the process, involving eight eminent Australians, and regional experts from the Pacific and Southeast Asia.” See: https://www.dfat.gov.au/sites/default/files/international-development-policy.pdf.

← 7. For more information on the 2023 National Defence Strategic Review, see: https://www.defence.gov.au/about/reviews-inquiries/defence-strategic-review. For more information on the 2023 Development Finance Review, see: https://www.dfat.gov.au/publications/development/australias-development-finance-review. The DFAT Capability Review is not public and was not shared with the OECD review team. Main messages of the review were discussed in meetings in Canberra and covered via Australia’s Self-Assessment.

← 8. See for example: Benjamin Day and Tamas Wells, “What parliamentarians think about Australia's post-COVID-19 aid program: The emerging ‘cautious consensus’ in Australian aid” in Asia and the Pacific Policy Studies, 2021, https://www.scopus.com/pages/publications/85118339988.

← 9. In December 2024, Prime Ministers Albanese and Marape announced Papua New Guinea would enter the Australian National Rugby League competition in 2028 and connected AUD 600 million sports diplomacy initiatives focused on Papua New Guinea rugby league player development. While separate from Australia’s ODA budget, the size of the investment – roughly equivalent to Australia’s annual ODA budget for Papua New Guinea in 2025/26 – has faced scrutiny.

In October 2025, Prime Ministers Albanese and Marape signed the PNG-Australia Mutual Defence Treaty which elevates the Defence relationship between PNG and Australia to the status of an Alliance. Australia’s bilateral relationship with Papua New Guinea is underpinned by the 2020 Comprehensive Strategic and Economic Partnership (see https://www.dfat.gov.au/geo/papua-new-guinea/papua-new-guinea-australia-comprehensive-strategic-and-economic-partnership) and the legally binding 2023 Bilateral Security Agreement (see https://www.dfat.gov.au/countries/papua-new-guinea/australia-papua-new-guinea-bilateral-security-agreement). The Treaty on Development Cooperation with the Government of Papua and New Guinea (2000) also remains in force, with no fixed duration. The Treaty was reviewed in 2010 to mixed findings (https://devpolicy.org/publications/reports/PNGAustralianAidReview.pdf).

Australia is Papua New Guinea’s largest development partner with development support guided by the 2024-2029 Development Partnership Plan.

← 10. Similar questions were raised in 2023 over the government’s decision to use the ODA budget to support the Solomon Islands’ hosting of the Pacific Games. See analysis by the Lowy Institute: https://www.lowyinstitute.org/the-interpreter/questions-about-australian-aid-fund-pacific-games.

← 11. The 2023/24 Budget states that the Government will provide AUD 1.9 billion over five years from 2022/23 to expand Australia’s engagement with Pacific Island countries. Additional resources since the 2022/23 Budget include, inter alia, AUD 1.4 billion in “Additional Official Development Assistance” over the four financial years 2022/23 to 2025/26; AUD 7.9 million for “Enhancing the Pacific Australia Labour Mobility Scheme” over two financial years 2022/23 and 2023/24; and AUD 65 million in “International Climate Finance” over financial years from 2024/25 to 2027/28.

← 12. According to the 2023/24 Budget, the indexation is expected to amount to AUD 8.6 billion over ten years from 2027/28. See Budget Paper No. 2: Budget Measures, https://archive.budget.gov.au/2023-24/bp2/download/bp2_2023-24.pdf.

← 13. Australia's annual inflation rate held steady at 2.4% in Q1 2025, unchanged from the previous quarter. Australia has a flexible inflation target, which aims to keep consumer price inflation between 2% and 3%. See: https://www.rba.gov.au/inflation-overview.html.

← 14. For the fiscal year 2025/26, the United Kingdom’s ODA budget is approximately GBP 9.3 billion, which corresponds to 0.48% of the United Kingdom’s GNI. This marks the beginning of a planned transition to reduce ODA spending to 0.3% of GNI by 2027, as outlined in the Spring Statement 2025. For the financial year 2025/26, the United Kingdom’s defence budget is set at GBP 62.2 billion, following a GBP 2.2 billion increase announced in the Spring Statement 2025. This represents a significant increase from the previous year and aligns with the government's commitment to raise defence spending to 2.5% of GDP by 2027, with an ambition to reach 3% in the next Parliament. This puts the United Kingdom’s ODA/Defence ratio at approximately 1:6.7, compared to Australia’s 1:11.6.

Canada’s ODA budget for 2025/26 is projected to be CAD 10.6 billion. This reflects a modest adjustment for inflation from the previous year’s CAD 10.2 billion and is intended to maintain Canada’s global engagement rather than increase it. Canada’s defence budget for 2025/26 is projected to be CAD 62.7 billion, marking a significant increase from previous years and aligning with the country’s commitment to meet NATO’s 2% of GDP defence spending target. This puts the Canada’s ODA/Defence ratio at approximately 1:5.9

For more information on the United Kingdom budget, see: https://commonslibrary.parliament.uk/research-briefings/cbp-8175/ and https://www.gov.uk/government/news/future-international-development-spending-set-out-in-spring-statement. For more information on Canada’s budget see https://cooperation.ca/cooperation-canadas-reaction-to-the-2025-26-main-estimates/ and https://www.theglobeandmail.com/investing/markets/commodities/QRZ17/pressreleases/32787112/canada-plans-to-hit-nato-spending-target-early-and-reduce-reliance-on-us-defense-carney-says/.

← 15. For example, the Malaysia Thailand Reform Partnership programme. The programme’s final evaluation in 2022 discusses in some detail the important distinction between ODA and non-ODA in these contexts: https://www.dfat.gov.au/sites/default/files/mtrp-final-evaluation-report.pdf

← 16. At present, Australian Members of Parliament (MPs) largely travel to regional partners through the Australian Regional Leadership Initiative (ARLI) funded by the Gates Foundation and implemented by Save the Children Australia. Since 2015, Save the Children has delivered 16 learning tours to countries including Bangladesh, Cambodia, Fiji, Indonesia, Jordan, Kenya, Lebanon, Myanmar, Papua New Guinea, Solomon Islands and Vanuatu. For more information, see: https://www.savethechildren.org.au/media/media-releases/australian-politicians-visit-vanuatu.

← 17. The United Kingdom’s International Development Committee is appointed by the House of Commons to scrutinise the work of the Foreign, Commonwealth & Development Office (FCDO) in respect of aid policy, and the expenditure of ODA across United Kingdom government departments. It communicates and publishes actively on its findings and work. See: https://committees.parliament.uk/committee/98/international-development-committee/role/.

Finland’s Development Policy Committee is an advisory body appointed by the government. Its members represent the parliamentary parties, interest groups and NGOs, as well as researchers. The Committee monitors and evaluates Finland’s activities in policy areas with an impact on developing countries. It assesses the quality and effectiveness of development co‑operation and follows the level of official development co‑operation appropriations. The Committee is also active in promoting debate on development issues in Finland. See: https://www.kehityspoliittinentoimikunta.fi/en/.

← 18. The AusDevPortal is available at: https://adp.dfat.gov.au/.

← 19. For example, on New Zealand’s efforts to engage Pasifika peoples outside of New Zealand’s major cities, see Box 3 “Engaging with Pacific diaspora to inform policy and build awareness of development co‑operation at home” in New Zealand’s 2023 OECD DAC Peer Review: https://www.oecd.org/en/publications/oecd-development-co-operation-peer-reviews-new-zealand-2023_10883ac5-en/full-report/component-6.html#chapter-d1e525-bc055994a9/.

For more information on how Italy effectively integrated migrant communities into its consultation and efforts to build development awareness, see: https://www.oecd.org/en/publications/2021/03/development-co-operation-tips-tools-insights-practices_d307b396/empowering-the-immigrant-diaspora-for-sustainable-development_241ad8b2.html.

An older albeit still relevant report by the United Kingdom’s Bond (2015) also explores the links between engaging diaspora communities as agents for development, public support for international development co-operation and ODA, and public scrutiny in the context of the United Kingdom. The report also recognises the need to breakdown negative stereotypes. See: https://capacity4dev.europa.eu/library/what-development-means-diaspora-communities_en.

← 20. This includes: Treasury, the Department of Finance, the Department of Agriculture, Fisheries and Forestry, the Attorney-General's Department, the Department of Health, the National Indigenous Australians Agency, and the Australian Maritime Safety Authority.

← 21. This is also evident in Australia’s growing innovative finance efforts in Southeast Asia and the Pacific, where both the scale of projects and the private sector contexts are vastly different.

← 22. These responsibilities are spelled out in internal guidance that was shared with the review team as the terms of reference, developed by DFAT, entitled “Development SRO – areas of authority and responsibilities” (unpublished).

← 23. The Terms of Reference: Development Program Committee, updated August 2025, state: “The Development Program Committee (the Committee/DPC) provides oversight and governance of the development cooperation program to ensure it is consistent with government policy and achieves development impact. It advises the Secretary and the Executive Board and engages with other Tier 2 Committees and governance structures in the Department. It executes its duty by ensuring the development program aligns with the government’s: overarching development policy and performance framework; foreign policy, development and trade objectives; and bilateral, regional and multilateral priorities.” (Unpublished internal DFAT document).

← 24. For example, the final evaluation of DFAT’s World Bank programme Eliminating Barriers to Inclusive and Sustainable Growth in Sri Lanka in 2024 encouraged revisions to the programme’s oversight mechanisms to ensure greater involvement by the High Commission in the management and monitoring of the programme, noting the strategic relevance of this to the High Commission. The evaluation noted: “This provided flexibility but also resulted in the High Commission conceding any influence it might have had over the program’s investment portfolio.” The evaluation further suggested options to strengthen oversight, including assigning additional, experienced staff in the High Commission, while emphasising the importance and strategic relevance of the High Commission in holding the key relationship with the World Bank. See: https://www.dfat.gov.au/sites/default/files/evaluation-eliminating-barriers-to-inclusive-sustainable-growth-sri-lanka.pdf.

The 2023 mid-term review of the Australia Mongolia Extractives Program (AMEP) recommended that “…the program should engage more deliberately with the Embassy to ensure greater collaboration between AMEP II and the Embassy on issues of mutual interest, including promoting dialogue between key stakeholders in the extractives sector and the senior officials in the Embassy. A practical way of doing this might be to convene a quarterly/bi-annual informal event where senior officials from the Embassy meet with the key lead implementing partners to exchange activity related information.” See: https://www.dfat.gov.au/sites/default/files/amep-ii-mid-term-review.pdf.

← 25. For example, a recent mid-term review of DFAT’s Team Up sports diplomacy initiative pointed out the unusual arrangement of an Australian government institution (ABC) being sub-contracted by a managing contractor, noting “It is inappropriate and difficult for managing contractors to be the contracting party for Australian Government institutions. In other programs where Australian Government institutions are delivering development outcomes, it is typical for DFAT to be the contracting party through an RoU and for the managing contractor to possibly provide support and coordination services to the Australian Government institution (examples include Prospera in Indonesia and the Institutional Partnerships Program in Papua New Guinea.) This would then enable the ABC ID WINS team and Team Up to fully focus on collaboration, their strategic partnership, and operational synergies.” For more information, see: https://www.dfat.gov.au/sites/default/files/team-up-mid-term-review-report.pdf.

This arrangement as well as the perceived lack of value for money due to multiple layers of overheads were also raised consistently in the key partner assessments gathered for this review – for example, the United Nations being sub-contracted by managing contractors hired by Australia – and in the review team’s consultations with diverse key partners in Timor‑Leste.

See also the Auditor General’s report (2020), Value for Money in the Delivery of Official Development Assistance through Facility Arrangements, available at https://www.anao.gov.au/work/performance-audit/value-money-the-delivery-official-development-assistance-through-facility-arrangements, which picks up on similar issues around layering and value for money.

← 26. DFAT also produces an annual assessment of individual investment effectiveness, however, the reports do not appear to be public and it is unclear to what extent they focus on learning or how they are used.

← 27. Australia’s last peer review in 2018 emphasised the value of DFAT’s investments in research and knowledge products. The review stated that research is generally considered to be of good quality and is in line with aid priorities. At the time, DFAT’s budget for research had increased more than that of its programmable aid, demonstrating a strong commitment to research. Since 2005/06 about 3% of DFAT’s aid budget has been spent on research, a proportion that is in line with that of other DAC countries. DFAT’s research was also described as highly decentralised: country and thematic programmes directly manage 97% of it and Australian institutions and individuals receive around 60% of DFAT’s research budget. A 2015 ODE evaluation found that the budget for research was appropriate, in line with aid priorities and generally considered to be of good quality.

← 28. Since its dissolution, neither iXc nor DFAT’s 2018-2021 innovation strategy have been replaced (see: https://d3qlm9hpgjc8os.cloudfront.net/wp-content/uploads/2018/07/03095158/DFAT-Innovation-Strategy-FINAL.pdf). For more information on the innovationXchange, see also: https://www.dfat.gov.au/about-us/publications/Pages/innovationxchange-aid-program-performance-report-2017-18.

← 29. These points have been echoed in DFAT staff responses to the annual Australian Public Service (APS) Employee Census, with the 2024 census results illustrating that, compared to the overall APS, DFAT employees feel less willing and able to be innovative across all indicators. See: https://www.dfat.gov.au/sites/default/files/2024-dfat-aps-employee-census-highlights-report.pdf.

← 30. ODE was mandated to assess DFAT's internal performance management systems, evaluate the performance of the aid programme and contribute to evidence and debate about aid effectiveness.

← 31. Planned thematic and portfolio evaluations include the topic of intersectionality in practice (2024-25) and a blended finance portfolio evaluation (2024-25). Other evaluations listed in the DFAT development evaluation plan 2024-25 to 2026-27 also considered thematic issues, however in the context of specific country and regional programmes, for example, on Australia’s climate finance in Indonesia. See the plans at:https://www.dfat.gov.au/development/performance-assessment/development-evaluation/development-evaluation-plans. DFAT reports that the next evaluation plan will include thematic evaluations, including a Multi-year Strategic Partnership Framework Evaluation for OCHA, UNHCR, WFP and ICRC, and on intersectionality.

← 32. For more information on the Australian Centre for Evaluation, see: https://evaluation.treasury.gov.au/.

← 33. For example, see more on Finland’s use of Artificial Intelligence to make the most of evaluation evidence: https://www.oecd.org/en/publications/development-co-operation-tips-tools-insights-practices_be69e0cf-en/using-ai-to-make-the-most-of-evaluation-evidence-in-finland_ec059edb-en.html.

← 34. In the 2023-24 Federal Budget, DFAT received additional funding of AUD 36.8 million over four years to enhance the department’s development capability. See public statements: https://www.dfat.gov.au/about-us/corporate/portfolio-budget-statements/australias-official-development-assistance-budget-summary-2023-24 and https://www.dfat.gov.au/sites/default/files/oda-development-budget-summary-2023-24.pdf.

← 35. DFAT’s 2024-25 corporate plan states: “The department is investing in its people capability. Under the APS Strategic Commissioning Framework [2023], we will see a $6.1 million reduction in contractor expenditure and a corresponding investment in our APS workforce throughout 2024-25.” For more information on the APS Strategic Commissioning Framework, published in 2023, see: https://www.apsc.gov.au/publication/aps-strategic-commissioning-framework

← 36. To address this, DFAT have recently filled a second APS governance position, and report that a contracted governance adviser recruitment is underway (as of October 2025). DFAT also notes that this is complemented by a centrally managed panel of contracted expertise. Nevertheless, interviews with staff raised this as a concern given Australia’s breadth of engagement and objectives in key partner countries.

← 37. A key component of the Academy is the Foundations of International Development Massive Open Online Course, which DFAT report has had nearly 1 000 enrolments from both DFAT including LES and other APS agencies since it began in July 2023.

← 38. Building capability in posts has been a priority, with in-country development missions engaging 300 DFAT staff to date (see Australia’s self-assessment: DCD/DAC/AR(2025)1/23). For example, Australia reports that 70 Heads of Mission and Senior Executive Service staff participated in Development Leadership training between January 2023 and April 2025.

← 39. While serving as Minister for International Development, this expectation was communicated by Minister Conroy in 2023. See here: https://www.abc.net.au/news/2023-02-09/pat-conroy-dfat-wants-development-specialists-ausaid-/101951876 and for the full, original interview, here: https://goodwillhunterspodcast.com.au/episodes/episode-2-the-dna-of-development-with-minister-pat-conroy/.

← 40. See for example Foreign Minister Penny Wong’s statement at the UN General Assembly in 2024, which underscored the importance of upholding international law in contexts such as Gaza, Sudan and Yemen: https://www.foreignminister.gov.au/minister/penny-wong/speech/national-statement-united-nations-general-assembly-0. See also: 15^th Australia-United Kingdom Ministerial Consultations, 25 July 2025: https://www.foreignminister.gov.au/minister/penny-wong/media-release/15th-australia-united-kingdom-ministerial-consultations.

← 41. The Declaration builds on existing UN Security Council Resolution 2730, which addresses the increasing threats and violence faced by humanitarian personnel. See also: “Australia launches global declaration to protect aid workers” media release: https://www.foreignminister.gov.au/minister/penny-wong/media-release/australia-launches-global-declaration-protect-aid-workers.

← 42. For example, the recent creation of a new Rome-based position in Australia’s embassy is a positive step towards addressing the need to align resources and capability with commitments to multilateralism.

← 43. For example, Gender Ambassador Stephanie Copus Campbell joined UN Women in the “16 days of Activism against Gender Based Violence” campaign in 2023 and 2024.

← 44. For further information on the Joint Statement see: https://www.dfat.gov.au/international-relations/themes/human-rights/hrc-statements/45th-session-human-rights-council/joint-statement-family-violence.

← 45. Examples include: support to the Alliance Of Small Island States (AOSIS) Secretariat; to the UN Economic and Social Commission for Asia the Pacific (UNESCAP) Pacific Trust Fund for attendance at regional fora; for regional consultations in the lead up to the UN SIDS4 Conference in Tonga; and for the Commonwealth Small States Offices to support candidacies and host events, such as CHOGM in Samoa. Australia has also provided technical assistance in the form of Australian experts in the SIDS units of UN Department of Economic and Social Affairs and UN Office of the High Representative for Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS), to ensure these agencies can deliver their mandates for SIDS.

← 46. Lobbying led to changes and the establishment of “Gavi’s approach to engaging with middle-income countries” (the “MICs Approach”), see: https://www.gavi.org/programmes-impact/programmatic-policies/eligibility-co-financing-policies/gavi-mics-approach.

← 47. Australia has supported the World Bank to increase resources, expertise and efforts across the Pacific region. This includes support through the Papua New Guinea and Pacific Islands Umbrella Facility (PPIUF) multi-donor trust fund where DFAT’s core funding supported the World Bank to deliver increased International Development Association (IDA) funding and staffing across the Pacific, as well as supporting analytical, capacity building, project preparation and design, and budget support operations in the region. Australia has supported the United Nations Development Programme Pacific Office (UNDPPO) operations since its inception in 2006. UNDPPO provides country and regional support to 15 Pacific countries. Australia's funding to the UNDPPO is guided by the Pacific Engagement Strategy under Australia's global partnership with UNDP, and DFAT reports that it has facilitated a more coherent and efficient UN presence in the Pacific.

← 48. For further information on DFAT’s support for the WFP see: https://www.dfat.gov.au/development/topics/development-issues/building-resilience/humanitarian-preparedness-and-response/world-food-programme.

← 49. After Japan, Australia is the second largest donor to the ADB’s Asia Development Fund (http://data-explorer.oecd.org/s/52). See also: https://aidtracker.devpolicy.org/commitments/.

← 50. As the driest inhabitable continent on the planet, with most of the population living in coastal areas, Australia is highly vulnerable to climate change and related extreme events. For more information on the impacts of climate change on Australia, see: https://doi.org/10.1787/9a56c9d2-en.

← 51. For further information on the Australian government’s emissions reduction targets, see: https://www.dcceew.gov.au/climate-change/emissions-reduction/net-zero.

← 52. For example, the Australian Government Future Made in Australia industrial and economic strategy aims to maximise the economic and industrial benefits of the move to net zero, recognising a changing global economic and geostrategic landscape. For further information see: https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r7219.

← 53. Austrade refers to the Australian Trade and Investment Commission.

← 54. Its membership comprises all Departmental Secretaries, the Australian Public Service Commissioner and the Chief Executive Officer of the National Indigenous Australians Agency (https://www.pmc.gov.au/about-us/accountability-and-reporting/corporate-reporting/secretaries-board).

← 55. For example, the Kokoda Initiative Partnership demonstrates how long-term relationships between the governments of Australia and Papua New Guinea are supporting environmental outcomes. Together, both governments are working with Kokoda Track communities to develop locally led sustainable land use action plans and drafting national conservation laws to embed community plans within a broader legal framework.

← 56. For example, Australia’s 2024 Humanitarian Policy commits to increasing support for locally led humanitarian action. The new Disability Equity and Rights (2024) and Gender Equality (2024) strategies commit to supporting local partnerships and movements and locally led approaches to women’s leadership.

← 57. The Australian NGO Cooperation Program (ANCP) is the Australian Government's longest running and largest civil society programme. Each year, the ANCP supports more than 60 Australian NGOs and over 2 000 local partners to deliver around 400 projects in around 50 countries, with an annual estimated budget of AUD 143 million, see: https://www.dfat.gov.au/development/who-we-work-with/ngos/ancp/australian-ngo-cooperation-program.

The ANCP “pass-down” pilot running since 2022 stipulates that a specific proportion of each allocation to Australian civil society partners must be passed downstream to local partners as flexible, discretionary funding. Although ANCP funding is not currently classified as B01 - core support to non-governmental organisations (NGOs), DFAT consider that it fulfils certain core funding criteria, including “contributing to programmes and activities which NGOs have developed themselves, and which they implement on their own authority and responsibility.”

← 58. This indicates that ANCP could function as a flexible source of local funding, even if it is not currently reported as such in the CRS.

← 59. For example, DFAT’s Humanitarian Division has collaborated with the United Kingdom’s Foreign, Commonwealth and Development Office (FCDO) to conduct joint Central Assurance Assessments of the WFP, the International Committee of the Red Cross (ICRC) and the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA).

← 60. In 2023, almost all ODA to Europe (primarily to Ukraine and Tükiye) was provided in the form of humanitarian assistance. The same year, 39% of ODA to Africa was also humanitarian assistance, the rest being on social infrastructure and services (28%) as well as the production sector (17%). See OECD Data Explorer for more: https://data-explorer.oecd.org/s/3ni.

← 61. The International Institute for Strategic Studies has organised the Shangri-La Dialogue since 2002. It is the unique platform for debate among government ministers and senior officials, as well as business leaders and security experts, on Asia’s developing security challenges. For more see, https://www.iiss.org/events/iiss-shangri-la-dialogue/.

← 62. In the OECD’s fragility framework, ODA commitments to peace objectives are tracked using the following 18 Creditor Reporting Sector codes: 15110 (Public sector policy and administrative management); 15111 (Public finance management [PFM]); 15112 (Decentralisation and support to subnational government); 15113 (Anti-corruption organisations and institutions); 15130 (Legal and judicial development); 15150 (Democratic participation and civil society); 15152 (Legislatures and political parties); 15153 (Media and free flow of information); 15160 (Human rights); 15170 (Women's equality organisations and institutions); 15180 (Ending violence against women and girls); 15190 (Facilitation of orderly, safe, regular and responsible migration and mobility); 15210 (Security system management and reform); 15220 (Civilian peace-building, conflict prevention and resolution); 15230 (Participation in international peacekeeping operations); 15240 (Reintegration and SALW control); 15250 (Removal of land mines and explosive remnants of war); 15261 (Child soldiers [prevention and demobilisation]). For more, see https://www.oecd.org/en/publications/2023/10/peace-and-official-development-assistance_6514078d.html.

← 63. For example, in the OECD fragility framework 2025, Timor-Leste faces high economic and human fragility, moderate environmental, societal and security fragility, and low political fragility. For more, see https://www3.compareyourcountry.org/states-of-fragility/countries/TLS//.

← 64. For example, the Southeast Asia Gender-based Violence Prevention Platform (https://prevention-platform.org/) brings together partner governments, civil society, regional bodies and international organisations on policy and programming. Programmes such as Pacific Women Lead and pilots such as ATscale on disability assistive technology are further examples of how Australia operationalises its strategy through partnerships and innovation (see https://pacificwomen.org/ and https://atscalepartnership.org/). The AIR (Amplify–Invest–Reach) Partnership, which supported four Women’s Funds, is a further strong example. The objective of the AIR Partnership pilot, running from 2021-2025, was to build a sustainable and effective partnership between DFAT and Women’s Funds that promotes and delivers human rights outcomes for women, girls and persons with diverse Sexual Orientation, Gender Identity, Gender Expression and Sex Characteristics (SOGIESC) in Asia and the Pacific, contributing to sustainable, long-term change for gender equality. For more information on AIR, see the recent 2025 evaluation: https://www.dfat.gov.au/publications/publications/amplify-invest-reach-i-r-partnership-evaluation. See also Box 6. Supporting local organisations to advance gender equality and disability inclusion.

← 65. As one output to support the uptake of these commitments by staff, the office developed guidance on how Australia’s development co-operation is enhanced by First Nations Australians’ perspectives. See: https://www.dfat.gov.au/publications/international-relations/guidance-note-our-development-cooperation-enhanced-first-nations-australians-perspectives.

← 66. See, for example, New Zealand’s progress in integrating Indigenous worldviews and knowledge into its foreign policy: https://www.oecd.org/en/publications/2021/03/development-co-operation-tips-tools-insights-practices_d307b396/integrating-indigenous-worldviews-and-knowledge-into-new-zealand-s-foreign-policy_fc55bac8.html.

← 67. For example, beyond supporting national disaster centres and preparedness, Australia also partners with universities and research centers to look at how to adapt agricultural production, food and water security, and health. The Bureau of Meteorology is also a long-standing partner of the Climate and Oceans Support Program in the Pacific to prepare for, and mitigate, the impacts of severe climate, tidal and oceanographic events (http://cosppac.bom.gov.au/). Private media outlets are also mobilised, for instance through the Pacific Climate Media and Traditional Knowledge project (https://www.abc.net.au/abc-international-development/pacific-climate-media-and-traditional-knowledge/104383656).

← 68. In the 2022 review of DFAT’s blended finance investments, one programme was rated “good” in terms of effectiveness (WLB 1 and WLB 2); four were rated “moderate” in terms of effectiveness; and one was rated “poor” (PacRISE). See: https://www.dfat.gov.au/sites/default/files/review-dfat-blended-finance-investments-2022.pdf.

← 69. The 2022 review notes, for example: “Following the misstep under PacRISE of working solely with established regional intermediaries with limited country-specific knowledge and experience, most DFAT blended finance programmes that followed—including BPP, IW, EMIIF, and SFI—included localisation elements in their design.” (https://www.dfat.gov.au/sites/default/files/review-dfat-blended-finance-investments-2022.pdf).

← 70. The Australian National Interest Account (NIA) is a financing mechanism managed by Export Finance Australia (EFA) under the Export Finance and Insurance Corporation Act 1991 (EFIC Act). It is distinct from EFA’s Commercial Account and serves a specific public policy purpose. It enables the government to support initiatives that serve that national interest but may not be viable under purely commercial terms. The Australian Government bears all risks and receives all income from NIA transactions. It is overseen by the Minister for Trade and Tourism.

← 71. Figure based on information provided by DFAT in the context of the peer review.

← 72. Specifically, this includes a 2022 system-wide review and AIFFP’s follow-up to an earlier systems review conducted by Deloitte in 2020. The 2022 Review noted that AIFFP had made impressive progress in its establishment phase to implement several high-quality systems that meet its needs. An earlier, internal AIFFP systems review conducted by Deloitte in 2020 also concluded that AIFFP was well positioned to meet its mandate in the short to medium term. The Deloitte review made 32 recommendations to improve AIFFP systems and processes, with 28 found to have been completed in 2022, 3 on track and 1 overdue.

← 73. See DFAT’s 2024/25 to 2026/27 development evaluation plan at: https://www.dfat.gov.au/sites/default/files/dfat-development-evaluation-plan-2024-25-2026-27.pdf, and the updated plan for 2025/26 to 2027/28 at: https://www.dfat.gov.au/sites/default/files/dfat-development-evaluations-plan-2025-26-2027-28.pdf.

← 74. For more information, see: OECD Blended finance for sustainable development: Best practices database https://www.oecd.org/en/toolkits/blended-finance-case-studies.html?orderBy=mostRelevant&page=0&facetTags=oecd-tf-thmtc-rs-blndd-fnnc-03c1ae%3Addtnlt-a180b8 and https://www.proparco.fr/en/resources/case-studies-proparco-ex-post-gender-evaluation.

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