Australia Commits Historic AUD85 Million to Support Tonga’s Economic Stability
Nuku’alofa, 26 March 2025 – Tonga’s recent National Development Summit concluded with clear calls from international donors and development partners urging the country to shift from donor dependence towards sustainable economic growth. While Australia announced significant new budget support totalling AUD85 million (TOP125 million) over four years, donors collectively emphasised the importance of Tonga establishing pathways for enhancing its Gross Domestic Product (GDP).
Since 2020, Australia has provided substantial financial support to Tonga, contributing over AUD142 million to stabilise the budget, fund social infrastructure improvements, and expand renewable energy access. In the last financial year alone (2022–2023), Australia provided direct budget support exceeding AUD45 million (approximately TOP70 million), aimed at helping Tonga recover from the economic impacts of natural disasters, COVID-19, and global inflationary pressures.
Prime Minister Dr ‘Aisake Valu Eke recognised the generous support from donors but also echoed their sentiments on economic sustainability. “The significant assistance we’ve received from our partners, notably Australia, is instrumental. Yet, we must equally acknowledge that long-term prosperity requires strengthening our domestic economy and reducing external dependence,” he said.
The summit identified several critical areas for economic improvement, including agriculture, tourism, fisheries, and renewable energy, each holding substantial potential for economic diversification and revenue generation. Key stakeholders agreed that targeted investments in these sectors would create employment, stimulate local businesses, and substantially increase national revenue.
Australia’s High Commissioner to Tonga, His Excellency Brek Batley, highlighted this point by noting, “While our budget support helps Tonga navigate current challenges, genuine resilience will come through economic diversification and prudent fiscal policies that increase Tonga’s own revenue-generating capacity.”
Additionally, the implementation of agreed policy reforms, such as those outlined in the Joint Policy Reform Matrix between Tonga and its development partners, remains crucial. Transparent governance streamlined public administration, and focused investment in infrastructure were highlighted as crucial reforms to accelerate economic resilience.
Tonga’s recent experiences with economic disruptions from natural disasters and global inflation have reinforced the urgency of sustainable economic planning. Participants at the summit concurred that a shift toward domestic productivity and improved trade relations would decrease vulnerability to external economic shocks.
In concluding remarks, Prime Minister Eke highlighted Tonga’s commitment to leveraging donor assistance effectively. “Our goal remains clear: a Tonga less reliant on donors and increasingly powered by its vibrant and sustainable economy. The summit has provided valuable guidance, and we will act decisively,” he assured stakeholders.
As Tonga moves forward from the summit, the consensus remains that a balanced approach, embracing both donor assistance and substantial investments in national economic development, will guide Tonga towards sustained prosperity and resilience.
