Liberal backbenchers urge Coalition not to raid foreign aid budget to pay for rumoured $15bn defence boost

The Guardian

24-03-2025

Liberal backbenchers are urging the Coalition not to cut the overall foreign aid budget to pay for a potential $15bn increase in defence spending and other big-ticket budget items.
While the opposition is yet to announce details about its foreign aid package, the backbenchers have noted the UK government's decision to slash the foreign aid budget to pay for a generational increase in defence spending.
One Liberal backbencher, who declined to be named so they could speak freely before Thursday's budget-in-reply speech, said the foreign aid budget should not be raided to pay for other expensive policies ahead of an election.
'It is always an easy political fix to say 'let's cut foreign aid' and 'look after Australians first', but as a relatively wealthy nation … we have an obligation to help our neighbours as much as we can,' the backbencher said.
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'If we start cutting foreign aid to our neighbours in the Pacific, then we have the threat of the Chinese government coming in, with all of their funding, to gain loyalty.
'It is very important, particularly in the South Pacific, that we are seen as assisting them so we are seen as the leaders.'
Liberal MP Warren Entsch, who last month wrote to the foreign affairs minister, Penny Wong, to express concerns about the US government's foreign aid freeze, said it was 'absolutely critical that we maintain' aid spending.
'With the uncertainty around decisions taken by the leader of the free world, I think it is important that we continue to step up and be part of the solution,' Entsch said.
Guardian Australia has spoken to multiple Liberal MPs who have raised concerns about how the foreign aid budget is being used, but do not support any cut in overall expenditure.
Dr Cameron Hill, a senior researcher at the Australian National University's development policy centre, said previous Coalition governments had 'instituted large cuts to aid'.
The aid budget fell to an all-time low in 2019 when measured against gross national income. But this trend was reversed after the pandemic, when the then Morrison government allocated more money to the Pacific region.
During a foreign policy speech last week, Peter Dutton highlighted the Morrison government's foreign aid for the Pacific and criticised the Trump administration's plan to freeze foreign aid for 90 days.
The shadow foreign affairs minister, David Coleman, was contacted for comment. In a speech last month, Coleman defended the Coalition's record on aid and said 'it is vital that we succeed in the Pacific'.
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Last week, the Australian Financial Review reported the Coalition was considering an increase of at least $15bn a year in defence spending, which would put significant pressure on the budget. Dutton and the shadow defence spokesperson, Andrew Hastie, have not commented on the policy reportedly canvassed by Coalition sources.
Former Australian defence force chief Chris Barrie said raiding the foreign aid budget to pay for any increase in defence spending would be 'lazy thinking'.
'The UK is doing that, but the UK is locked into Nato and all sorts of other security arrangements,' Barrie said. 'I can think of Pacific island nations that were given US aid because they didn't want support from China.'
Hill said the government 'should not cut aid to fund defence increases'.
'Apart from being self-defeating, Australia has one of the widest ratios of defence to development spending among the 31 OECD official development assistance bilateral aid providers – more than 10:1 in 2023,' Hill said.
Last week, Dutton said the Trump administration's decision to pause foreign aid was 'detrimental to the collective interests in the region, and I hope that there can be a discussion between our governments about a sensible pathway forward in that regard'.
In recent weeks, Australian diplomats have consulted with Pacific nations to assess the impact of the US freeze on aid and what additional support could be provided ahead of Tuesday's federal budget.