At a time when many countries are cutting aid, Australia has chosen to hold the line on its foreign aid spend in this year’s budget, with a modest increase from the previous financial year.

Australia’s foreign aid spend is expected to be $5.2 billion in 2026-27. While this is a modest increase in the dollar amount through indexation, it’s a decline in real terms. Put simply: $5.2b is an increase on paper, but a loss when you take inflation into account. It’s also a decreased share of the Federal Budget—just 0.63% compared to 0.65% this time last year. Nonetheless, as our friends at Micah Australia have noted, “at a time when global aid is going backwards, Australia holding the line matters.”

Globally, nationally, and locally—it’s a tough economic season by most metrics, as the world markets grapple with the triple shock of a steep decline in humanitarian aid; disrupted trade and energy insecurity; and protracted conflicts in the Middle East.

These events have had a catastrophic effect on global peace and stability. Communities that rely heavily on aid and development activity have become more vulnerable due to events that, in many cases, have little to do with them. At the same time, nations such as the United States, the United Kingdom, Sweden, France and Germany have cut their international aid spend by significant amounts. Sadly, as is always the case, the most vulnerable bear the brunt.

Continued Focus On The Indo-Pacific

We applaud the Government’s continued focus on those in most need within our own neighbourhood: the Indo-Pacific. More than 75 percent of Australia’s aid budget will be directed to this area in the coming year, demonstrating the deep connections with our neighbours. Of course, the truth is that our futures are intertwined. Aid budget investments will contribute to improving structural health systems and education, increasing climate resilience, and contributing to humanitarian responses. These remain vital for building stronger, more resilient communities.

Worthy of note are the ongoing commitments to humanitarian action, climate resilience, and locally-led development, and the commitment to increase investment in Australian NGO partnerships which highlights the value of working through trusted community organisations. This approach is aligned with Baptist World Aid’s own commitment to locally-led development. Our experience continues to emphasise that when communities are equipped to drive their own solutions, and are supported by long-term partnerships that are grounded in dignity and respect, there is always significant Kingdom fruit for the harvest.

Worthy of note are the ongoing commitments to humanitarian action, climate resilience, and locally-led development.

Can We Do More?

While this Budget preserves funding for aid and development programs, it does not keep pace with the rise in inflation that we have all experienced. Communities we work with continue to face rising costs and compounding crises during what we know are an escalating number of natural disasters occurring due to climate change.

We have heard from our Partners in countries like Myanmar and Bangladesh that fuel shortages are leading to disruptions to supply chains, soaring price of fertiliser, fuel rationing, school and office closures. These communities are less resilient to these compounding shocks, which means sustained support is vital to help our Partners respond to immediate needs, recover livelihoods, and prepare for future crises.

Also, while we applaud the commitment to prosperity and stability in Indo Pacific, we can’t forget areas of the world facing enormous humanitarian need such as Sudan and the Middle East, where millions of people face acute shortages of food, healthcare and protection.

Our Verdict: A Pass Mark (Just)

Compared to days long past, Australia’s 2026-27 aid effort can be called modest. At around 0.17 percent of Gross National Income and only 0.63 percent of the federal budget, there is without doubt significant room for growth, especially in light of previous bipartisan commitment to increase aid.

What Can We Do?

The scale and complexity of our global village continue to grow. From climate-driven disasters in the Pacific to protracted crises in Myanmar and Afghanistan, there are precious people all over the world desperately in need of our generosity, our prayer, and our help. So, while holding the line might be all the government can do right now, we know it’s not enough. And as one of the wealthiest countries on earth, there is more we could do.

As followers of Jesus, we are called to stand with those made vulnerable, to seek justice and to act with compassion. This budget holds the line. The question for us is whether Australia will choose, in the years ahead, to go further.

For this reason, Baptist World Aid is proud to be part of the Safer World For All campaign, led by Micah Australia. Together we’re calling for aid funding to be restored to one percent of the Federal Budget, so we can play our part in addressing the challenges our world faces today.

You can join A Safer World For All by signing up today and adding your voice to advocate on behalf of our most vulnerable neighbours.