lowyinstitute.org By Susannah Patton 6 November 2025

On this page

• Introduction
• Economics, Diplomacy, and People-to-People Ties
• Strategic and Defense Issues
• Conclusion
• References

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Introduction

Going into the 2022 election, improving relations with Southeast Asia was at the top of the foreign policy to-do list for the Australian Labor Party, led by now prime minister Anthony Albanese. While the outgoing Liberal-National coalition government had notched up some achievements in its engagement with the region, there was also a sense of drift. The Pacific Step Up policy had focused on boosting ties with one of Australia’s two near regions, but Southeast Asia had not received the same level of diplomatic focus. Among the Labor Party’s pledges were appointing a special envoy for Southeast Asia, providing A$470 million in new aid to the region, and creating an office for Southeast Asia within the Department of Foreign Affairs and Trade. [1] For the most part, the Albanese government has followed through on its commitment to strengthen ties with Southeast Asia through more active diplomatic outreach, an economic strategy to boost two-way trade and investment, and a more nuanced approach to managing sensitive issues in Australia’s relations with the region, especially China-related issues and Middle East policy.

During the new term of government beginning in 2025, it is likely that the Albanese government will maintain Southeast Asia, along with the Pacific Islands, as a region of high priority. Albanese’s July 2025 John Curtin Oration articulated what he called Labor’s “constructive and creative role” and gave high billing to efforts to intensify economic engagement with Southeast Asia and deepen security cooperation with Indonesia. [2] While other global relationships may fluctuate according to events, the central importance of Southeast Asia within this distinctively Labor worldview suggests that engagement with this region, especially Indonesia, will remain high on Australia’s agenda for the next three years.

This essay analyzes the achievements of the Albanese government in its relations with Southeast Asia. It also assesses the continued challenges Australia faces both in deepening economic relations with the region and in continuing to balance regional ties with the U.S. alliance, especially given a less predictable and more demanding administration in Washington.

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