Appropriation Bill (No. 1) 2026-2027

Ms STEGGALL (Warringah) (17:52): Australia's international affairs budget is $76.18 billion, or some 9.5 per cent of the total federal budget. That includes defence, development, diplomacy, intelligence and international policing. But the distribution of that funding raises serious questions about whether the government is investing in the full range of tools needed to protect Australia's interests.

Defence dominates the international affairs budget, accounting for approximately 82 per cent of total spending. By contrast, official development assistance is just $5.2 billion, only 0.63 per cent of the federal budget. At a time of increasing conflict, geopolitical instability, climate disruption, humanitarian need and regional concerns, we need to make sure that we are adequately investing in all forms of statecraft.

Firstly—and these questions are in relation to foreign aid—will the government commit to returning Australia's foreign aid budget to at least one per cent of the federal budget, as called for by the Australian Council for International Development? Secondly, given that aid is now just 0.63 per cent of the federal budget, in what year does the government expect Australia's aid contribution to return to at least one per cent?

Thirdly, how does the government justify aid declining in real terms when global official development assistance fell by 23.1 per cent from 2024 to 2025? Conflict and global instabilities are increasing, yet investment in preventing these crises is moving in the opposite direction. Official development assistance across OECD Development Assistance Committee countries declined by 23.1 per cent from 2024 to 2025, the largest single-year decrease on record.

Australia's own contribution remains historically low. Australia's ODA as a share of gross national income has fallen to 0.18 per cent, below the OECD average of 0.26 per cent—we're already talking about everything being very low here—and behind comparable partners, including the UK, Japan and Canada. This is all the while we have two billion people—around one quarter of the global population—living in conflict affected areas.

Foreign aid is not charity; it is preventive statecraft. It supports regional stability, economic development, health security, humanitarian response and the ability of countries in our region to resist coercion. Polling also shows strong public support.

YouGov polling from May 2026 found that 74 per cent of Australians support aid being maintained or increased. The government can't claim that there is no public support to rebuild the aid program, but what there is is an overestimation. The public believes we are providing much more aid than we actually are.

The numbers are much lower than the public perception. The next question I have is in relation to a CBAM. Does the government intend to implement an Australian carbon border adjustment mechanism?

Has the government modelled the revenue that could be raised through a CBAM or fossil fuel export levy? Can the government ensure Australian industry is not disadvantaged by competing against imported products that do not face equivalent emissions costs? The EU's carbon border adjustment mechanism is set to expand, and the UK is also moving towards a similar border carbon regime.

These mechanisms are designed to apply a carbon cost to imported goods where emissions have not been priced earlier in the supply chain. Australia's safeguard mechanism applies to large domestic emitters, but it does not price exported fossil fuel emissions when those products are consumed overseas. Similarly, we do not address the imported emissions that come into Australia.

That creates a serious risk. Other countries may collect carbon revenue at their borders on Australian products while Australia misses the opportunity to raise revenue at Australian borders and reinvest that revenue here. An Australian CBAM, alongside a fossil fuel export levy set at the same effective emissions price as the safeguard mechanism, could help protect Australian industry, support cleaner manufacturing and raise revenue for climate resilience.

Is the government preparing Australia for this shift in global trade or waiting while other countries set the rules, because they are active in this space?