Budget Review 2022–23 Index

Dr Geoff Wade

In its 2022–23 Portfolio budget statement, the Department of Foreign Affairs and Trade describes the international environment within which Australia currently operates as follows (p. 13):

Australia faces a deteriorating strategic environment in 2022–23. Many Indo-Pacific countries remain vulnerable following the COVID-19 pandemic, while great power strategic competition is intensifying. The rules, norms and institutions that support Australia’s prosperity and security are under persistent pressure.

It is this tense global situation and the challenges posed to Australia’s interests in the region which have led to further attention and funds being assigned by Government to foreign policy budgets.

Resourcing

DFAT’s overall resourcing has grown by some $120 million over the 2021–22 estimates, while average staffing will increase by 113 to 6,103 (p. 19). Departmental resourcing of Austrade remains constant, while its administered funding has declined by over $300 million. Tourism Australia has seen its funding grow by some $30 million, while there has been little change in the resourcing of the Australian Secret Intelligence Service and a slight reduction in the funding made available to the Australian Centre for International Agricultural Research. As the table below indicates, forward estimates show fluctuating provisions in coming years.

Source: Australian Government, Budget Strategy and Outlook: Budget Paper No. 1: 2022–23: Statement 5: Expenses and Net Capital Investment, 146.

Initiatives

DFAT funding highlights a number of regional and global initiatives being promoted by the Government to pursue and protect Australian interests.

Increased Pacific engagement

Australia’s engagement with the Pacific has received further funding as an extension of the ‘Pacific step-up’ (now rendered as partnering with our ‘Pacific family’). Beyond the Official Development Assistance (ODA) and the temporary, targeted and supplementary ODA discussed in the ‘Foreign aid budget’ article elsewhere in this Budget review, the Government is increasing the Australian Infrastructure Financing Facility for the Pacific (p. 81) to $3.5 billion to support additional infrastructure investment in the Pacific. This will be partially used to assist Papua New Guinea improve its road and electricity networks (p. 81), a sphere where China has been particularly active, and an aspect of joint responses with allies to counter China’s activities in that country. Other projects to be funded under the facility are not detailed or costed, citing commercial sensitivities (p. 81). This measure extends the 2021–22 MYEFO measure titled ‘Australian Infrastructure Financing Facility for the Pacific Projects’ (p. 15). The ‘Export Finance and Insurance Corporation’ referred to in the Budget as the current administering body was, in fact, renamed Export Finance Australia in June 2019.

Funding of $65 million for an expanded Australian High Commission chancery in Honiara, Solomon Islands, is also included in the Budget. This is intended to support Australia’s efforts across the Pacific from a country now key in China’s Pacific aspirations. The scope and significance of the high commission’s activities are reflected in the fact that costs of this measure ‘will be partially met from within the existing resources of the Department of Foreign Affairs and Trade, the Department of Defence and the Australian Federal Police’ (Budget measures: budget paper no. 2: 2022–23, p. 83).

Increased Antarctic engagement

The Budget includes $839.9 million ‘to strengthen Australia’s capabilities and presence in Antarctica’ (p. 25), including $364.5 million over 5 years from 2021–22 (and $92.3 million per year ongoing) to support ‘Australia’s scientific leadership and international collaboration’. Funding for this measure has already been provided by the Government. Again, the provision of such funding likely stems from concerns about the activities of China in the Antarctic, including the building of Chinese bases in the Australian Antarctic Territory.

The funding includes:

• $136.6 million to support Australia’s inland traverse capability, critical charting activities, mobile stations, environmental protection and other core activities
• $109 million to increase aerial and inland capability:
  • $60.6 million for drone fleets and other autonomous vehicles and establishing an ‘Antarctic eye’ with integrated sensors and camera feeds
  • $35 million for 4 new medium-lift helicopters to be based on RSV Nuyina
  • $13.6 million for aerial capability development research
• $44.2 million in additional shipping support
• $17.4 million for marine science in the Southern Ocean
• $14.3 million for environmental management
• $7.4 million for Antarctic ice sheet research
• $3.4 million to enhance international engagement and ‘promote Australia’s leadership in Antarctic affairs’.

The provision of this funding for stepped up Australian engagement in the Antarctic was noted in a February 2022 announcement, which induced a negative response from China. See the article on Antarctica elsewhere in this Budget review for details of the scientific aspects of Antarctic funding.

Strengthened engagement with South Asia

A major initiative to broaden Australia’s links with South Asian partners, again in response to perceived excessive dependence on East Asia, has also received funding. While the Comprehensive Strategic Partnership between Australia and India has been in place since the 2020 India-Australia Leaders’ Virtual Summit, the Government is now broadly developing further links with South Asia through the QUAD strategic alliance, and boosted science, technology, education, trade, tourism and education links. The Australia-India  Economic Cooperation and Trade Agreement was signed on 2 April 2022.

The Budget confirmed a $245 million 5-year India program under the Comprehensive Strategic Partnership framework  (p. 82), with the creation of a Centre of Excellence for Critical and Emerging Technology Policy, and 3 ‘Maitri’ (friendship) initiatives with India:

• an $11.2 million Maitri Scholarships Program for Indian students to study at Australian universities
• a $3.5 million Maitri Grants and Fellowships Program for future leaders
• a $6.1 million Australia-India Maitri Cultural Partnership.

These programs were announced earlier following discussions between Minister for Foreign Affairs Marise Payne and Indian Foreign Minister S Jaishankar on 14 February 2022 in Melbourne, and will be coordinated by a new Centre for Australia-India Relations in Australia.

The Budget also provides for an expanded Australian diplomatic presence through a new post in Malé, Maldives and a new presence in the Southern Indian high-tech hub of Bengaluru. In a 22 March 2022 speech, Trade Minister Dan Tehan noted that ‘Austrade will be setting up an office in Bengaluru, and that will mean that we have the same diplomatic footprint in India that we currently have with China. And it’s only one less than what we have with the United States’.

Funding for these measures has already been provided by the Government and builds on the 2021–22 MYEFO measure titled ‘Comprehensive Strategic Partnership with India – new initiatives’ (p. 233).

Promotion of trade and tourism

In an effort to stimulate and support Australia’s post-pandemic economic recovery, a range of targeted trade and tourism measures has been included in the Budget.

The Government will provide $267.1 million over 4 years from 2022–23 (p. 80) to modernise and improve Australia’s trade system and support Australian exporters. Funding includes:

• $127.4 million to expand agricultural trade digital services
• $80 million to support small and medium export businesses through the Export Market Development Grants program
• $48 million to modernise Australia’s trade regulatory system
• $11.7 million to expand the Trade Information Service.

Partial funding for this measure has already been provided by the Government. This measure builds on the 2021–22 MYEFO measure titled ‘Australian Trade System Support’ (p. 26).

The funding of a new Austrade office in Vilnius, Lithuania, announced in February 2022 during the visit to Australia by the Lithuanian foreign minister, has both economic and strategic significance.

The new port facilities funded in the Budget for the Northern Territory are also intended to ‘boost the region’s importing and exporting ability’ and will thereby serve Australia’s trade with Indo-Pacific states. The new facility will also likely provide an alternative to the Port of Darwin, which is leased to Chinese company Landbridge for 99 years until 2114. It will thus serve both economic and strategic functions.

The Government will provide additional funding over 3 years to support the recovery of the Australian tourism sector from the COVID-19 pandemic. Funding includes:

• $76.7 million over 2 years from 2021–22 to support travel agents and tour service providers
• $63 million over 3 years from 2021–22 for targeted marketing initiatives
• $6.8 million over 3 years from 2021–22 for data and analysis services.

Slightly variant figures are provided in Trade Minister Tehan’s media release.

The Budget also provides $19.5 million over 2 years from 2022–23 to fund the Global Business, Talent and Investment Taskforce, now renamed the Global Australia Taskforce, to attract talent and international investment to Australia.

All online articles accessed April 2022

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