2026 aid budget breakfast

Recorded the morning after the 2026–27 federal budget, this first episode of the 2026 season brings you the Development Policy Centre's fourteenth annual aid budget breakfast, hosted by Devpolicy Blog editor Amita Monterola with analysis from Cameron Hill and Robin Davies. The session was held live from the Pacific Security College studio at the Crawford School, with questions from an online audience of aid practitioners, researchers, students and government officials.

Cameron and Robin both refer to slide presentations throughout; a video recording with the slides is available on the Development Policy Centre's YouTube channel.

Cameron unpacks how the government's 2.5% indexation measure — promised in the 2023 budget — is being applied for the first time. Combined with a 5% inflation estimate for the current financial year and slightly lower inflation thereafter, the result is a cumulative real fall in ODA of around 7% across the forward estimates. The ODA/GNI ratio falls from 0.18% to 0.16%, aid as a share of the federal budget drops from 0.65% to 0.58%, and the projected ratio of defence to aid spending widens from roughly 11:1 today to around 18:1 by the mid-2030s. The program also becomes more concentrated on the Pacific, which now receives 42% of Australian ODA, while spending on South and West Asia, Africa, the Middle East and global programs has fallen substantially over the past decade.

Within this year's budget, Cameron highlights a $111 million reduction in global and multilateral funding, including cuts to UNDP and Global Partnership for Education core funding and the cessation of Australia's contributions to UNAIDS and the Pandemic Fund. He notes a recurring tension: Australia continues to reprioritise away from multilateral core funding while simultaneously asking those agencies to direct more resources to the Pacific.

Robin then places the Australian figures in their global context. Global ODA fell by 23% — around $50 billion — from 2024 to 2025, the steepest single-year decline since records began in the 1960s. On current policy settings, he projects aid will be around 40% below its 2023 peak by 2028, with the cuts driven by a group of roughly ten donors led by the United States, but with Germany, France, the Netherlands and others still having most of their announced cuts ahead of them. The OECD's own projections are more optimistic, as they were a year ago. Contributions from non-DAC donors, including China, have drifted up to around $15–16 billion annually but come nowhere near offsetting the cuts.

A wide-ranging Q&A session then covers multilateral effectiveness in the Pacific, ODA graduation and Nauru's likely move to high-income status, the treatment of AIFFP loan grant equivalents, the adequacy of humanitarian funding amid escalating global needs, peacebuilding and conflict prevention, climate finance and the prospects for the Pacific COP, and whether private finance might fill the gap left by shrinking public aid budgets.

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