Foreign affairs

Geoff Wade

The 2023–24 budget allocation for the Foreign Affairs and Trade portfolio funds some foreign policy commitments made in the lead-up to the 2022 election, as well as other aspects presaged in the Foreign Minister’s 17 April 2023 National Press Club address, which advocated working towards ‘a region that reflects our national interests and our shared regional interests’. The Foreign Minister’s address provides some context to the measures funded through the Budget, discussed below.

Funding for Australian diplomacy and the Department of Foreign Affairs and Trade

According to the Foreign Minister, Australian foreign policy ‘starts with the capability of our foreign service – our people on the ground that put our foreign policy into action’. As such, a key element of the foreign policy budget provision relates to further funding and improving Australia’s diplomatic facilities and services.

The Budget provides $376.9 million over 4 years from 2023–24 (and $77.3 million per year ongoing) to maintain and improve delivery of core activities of the Department of Foreign Affairs and Trade (DFAT)
(p. 121). Funding includes:

$250.2 million over 4 years from 2023–24 (and $69.8 million per year ongoing) to fund overseas property expenses
$90.2 million over 3 years from 2023–24 to improve DFAT’s International Communications Network at overseas posts
$29.8 million over 4 years from 2023–24 (and $6.6 million per year ongoing) to continue administering the Foreign Arrangements Scheme
$3.1 million over 4 years from 2023–24 ($5.7 million over 7 years from 2023–24) for DFAT to participate in the transition to the new National Security Office Precinct in Canberra
$3.6 million over 4 years from 2023–24 (and $0.9 million per year ongoing) to sustain nuclear monitoring activities undertaken by Geoscience Australia.

In terms of overall staffing, the Foreign Minister stated in April 2023 that the Government has funded 350 new staff under the department since coming to power. However, budgeted staffing in 2023–24 will see only a small increase over 2022–23 (6,482 versus 6,475) (p. 19). New departmental performance assessment measures will be introduced from 1 July 2023 (p. 13).

The new funding being provided to DFAT comes after repeated calls to enhance Australia’s diplomatic services, most recently in the Defence strategic review, which urged ‘much more active Australian statecraft that works to support the maintenance of a regional balance of power in the Indo-Pacific’ and concluded with a call for:

the reversal of a long-term reduction in diplomatic resources, increasing our diplomatic efforts in areas of core national interest. Our diplomatic capability must be resourced, directed and focused (p. 34).

The Review also advocated ‘deepening our diplomatic and defence partnerships with key partners in the Indo-Pacific,’ and many aspects of the DFAT budget noted below are focused precisely to this end (p.18).

The $80 million over 4 years that is being provided to facilitate increased cooperation with partners and enhance DFAT’s capacity to ‘communicate Australia’s story about who we are and promote our vision for the region’ is an integral element of this agenda (p. 118).

New ambassadorships , which will also be key in the new diplomatic agenda, include Australia’s inaugural First Nations ambassador and a new ambassador for human rights (p. 16).

Funding of $10.8 million over 4 years from 2023–24 (and $2.6 million per year ongoing) is being provided to continue Australian diplomatic representation to Afghanistan (p. 116). Australia established an Interim Mission to Afghanistan following the closure of the Australian embassy in Kabul on 28 May 2021. Australia’s interests in Afghanistan are currently managed from the Australian embassy in Qatar.

Enhancing Pacific Engagement

In an address to the National Press Club on 17 April 2023, the Foreign Minister noted:

While our strategic circumstances have changed in the last 50 years, our geography has not, and nor has the centrality of the Pacific to our own security. With the return of strategic contest to the region, this security is enhanced when we work together, when we respond to Pacific priorities, and when we respect Pacific institutions. As a member of the Pacific family, our priority is to ensure the Blue Pacific remains peaceful, prosperous and equipped to respond to the challenges of our time.

As suggested, Pacific engagement features prominently in this year’s Budget with $1.9 billion being provided over 5 years from 2022–23 to expand Australia’s engagement with Pacific Island countries
(pp. 119–20). Funding includes:

$370.8 million over 4 years to expand the Pacific Australia Labour Mobility (PALM) scheme
$1.4 billion over 4 years to build Pacific peace and security, in alignment with the Pacific Islands Forum’s 2050 Strategy for the Blue Pacific continent including:
- Defence’s expansion of Australia’s engagement with Pacific Island countries, with Defence expenditure to be met from within existing resources
- Australian Federal Police and the Attorney-General’s Department’s strengthening of law enforcement and criminal justice cooperation with Pacific partners
- $114.3 million over 4 years to support a stronger, more united Pacific region, including supporting regional architecture
- $89.5 million over 4 years to deepen cultural and people-to-people ties with the Pacific.

In addition, the Ambassador for Cyber Affairs and Critical Technology will lead cyber resilience teams to help Pacific Island countries respond to cyber challenges (p. 16). This is particularly timely given the recent cyber attacks on Vanuatu and Tonga.

The Government will also provide a financing package to Sasape International Shipyard Limited in Solomon Islands to support acquisition of land and capital upgrades to restore Sasape’s shipyard functionality (p. 117). The costs of this measure have not been published due to commercial sensitivities.

These collective measures, summarised as ‘the provision of security infrastructure and maritime security capability’ (p. 19) are most likely intended as a response to efforts by the People’s Republic of China (PRC) to expand its influence within the region.

Support for the nations of the Pacific will be augmented through the provision of further ODA assistance, as outlined in the Budget review 2023–24 article, ‘Pacific investment package’.

Engagement with Southeast Asia

The Foreign Minister also noted in her speech on 17 April:

… some would see Southeast Asia as a mere theatre for great power competition. That is not a view we share. Because it strips Southeast Asian nations – and the enduring, central institution of ASEAN – of their influence, dynamism and agency. That’s why the Albanese Government has made engagement with ASEAN and its members a core priority. By the first anniversary of our Government, I will have visited every country in Southeast Asia as foreign minister, except Myanmar.

The Government will provide $55.7 million over 4 years from 2023–24 (and $11.9 million per year ongoing) to enhance Australian diplomatic and business engagement with Southeast Asia and Timor-Leste (p. 116). Funding includes:

$35.7 million over 4 years (and $10.4 million per year ongoing) to build closer diplomatic and economic connections with Southeast Asia through leaders, diplomats and students
$14.9 million to extend funding for the National Centre for Asia Capability (Asialink Business) for a further 4 years to support Australian businesses’ engagement with the region
$5.2 million over 4 years (and $1.5 million per year ongoing) to increase diplomatic engagement with Timor-Leste.

Similar to the Pacific engagement measures noted above, these measures are most likely intended to respond to China’s expanding influence within the Southeast Asian region, but the amounts involved are insignificant compared to the billions of dollars in China-ASEAN trade and investment and China’s growing channels of political influence in the region. To maintain any influence in Southeast Asia, Australia will necessarily be relying on ‘ASEAN centrality’ (and, indeed, ASEAN solidarity), as well as efforts in diverse spheres by the US. It is partly to this end that the Budget provides $31.9 million over 4 years from 2023–24 to deliver technical assistance and capacity-building support to Indo-Pacific nations to participate in the US-led Indo-Pacific Economic Framework (p. 121).

A more detailed overview of the Southeast Asian aspects of the Budget is provided in the Budget review 2023–24 article, ‘Southeast Asia’.

Australian Secret Intelligence Service

An amount of $468.8 million over 4 years from 2023–24 (and $185.6 million per year ongoing) will be provided to ‘modernise’ the Australian Secret Intelligence Service (ASIS) (p. 118). Funding for this measure has already been provided by the Government.

Total resourcing for ASIS in 2023–24 is $641.33 million, compared to the $619.69 million provided in 2022–23 (p. 133). The growing responsibilities of ASIS in light of the expanded Australian engagement with the Pacific and Southeast Asia noted above likely explain much of this growth. As the Portfolio budget statements 2023–24: budget related paper no. 1.8: foreign affairs and trade portfolio states
(p. 131):

In 2023–24, the Australian Secret Intelligence Service (ASIS) will continue to enhance government understanding of the overseas environment affecting Australia’s vital interests. ASIS will take appropriate action, consistent with applicable legislation, to protect and promote Australia’s vital interests through the provision of unique foreign intelligence services as directed by the Government.

AUKUS and DFAT’s nuclear diplomacy

The isolated references to the US in the Portfolio budget statements are certainly not reflective of the scale of the expanding Australia-US relationship, nor of the importance of the US in the measures being implemented by DFAT (p. 14).

The AUKUS and Quad arrangements see the 2 nations intimately tied through defence and other policy realms. In addition, the recent Defence strategic review clearly outlines a growing need in Australia for integration between diplomacy, regional strategies and national defence (pp. 32):

National Defence must be part of a broader national strategy of whole-of-government coordinated and focused statecraft and diplomacy in our region. This approach requires much more active Australian statecraft that works to support the maintenance of a regional balance of power in the Indo-Pacific.

It is this expanding integration that sees DFAT playing a key role in the AUKUS agenda. The Government is to provide $4.5 billion over 10 years from 2023–24 (and $482.7 million per year ongoing) to support the initial steps in Australia’s acquisition of a conventionally-armed, nuclear-powered submarine capability (p. 94). As part of the funding, DFAT has been allocated $52.7 million over 2 years from 2023–24 ‘to provide international policy advice and diplomatic support for the nuclear-powered submarine program’ (p. 95).

Extending the Foreign Arrangements Scheme

According to the Foreign Minister:

The Foreign Arrangements Scheme was introduced to ensure agreements with foreign countries are consistent with Australia's national interests. Despite its clear benefits, terminating funding was provided by the former Government in successive budgets from the scheme's 2020 introduction. The Albanese Government will support the ongoing administration of the scheme, as well as funding the required legislative review of the scheme to ensure it is working efficiently.

The importance of the Foreign Arrangements Scheme for Australia’s security is often only poorly understood. The purpose of the scheme, which started on 10 December 2020, is:

… to ensure that arrangements between state or territory governments (and their entities) and foreign entities do not adversely affect Australia’s foreign relations and are not inconsistent with Australia’s foreign policy.

…

The Scheme provides for states and territories and their entities to notify or seek approval from the Minister for Foreign Affairs if they propose to negotiate, or enter, or have entered a foreign arrangement. It creates obligations in respect of both future arrangements and existing arrangements.

Under the scheme, a public register listing of existing foreign arrangements is available. Given the innocence with which some foreign arrangements are entered into by Australian subnational bodies, the scheme allows both the Australian Government and the public to monitor such arrangements, which is of prime importance for Australia’s national security. In April 2021, for example, the former foreign minister used the provisions of the scheme to cancel Belt and Road Initiative agreements reached between the Victorian Government and PRC entities.

Under the 2023–24 Budget, $29.8 million over 4 years from 2023–24 (and $6.6 million per year ongoing) is provided ‘to continue the administration of the Foreign Arrangements Scheme’ (p. 121).

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