Australia’s election result offers certainty to a region in flux

The 2025 Australian federal election delivered a decisive mandate to Prime Minister Anthony Albanese and the Australian Labor Party, which secured at least 85 seats in the House of Representatives. This outcome affirms domestic political stability and offers crucial reassurance to Southeast Asia, a region currently navigating growing geopolitical uncertainty and economic flux.

Given that Southeast Asia has been deeply affected by the Trump administration’s escalated tariffs, evolving trade structures, and development aid cuts, Australia’s election result signals the continued presence of a stable middle power in the region. Under the Albanese government, Canberra has demonstrated strong support for ASEAN centrality, regional security cooperation, and climate collaboration. The election outcome guarantees policy continuity at a time when few nations in the region can count on long-term alignment.

Although Australia’s development assistance remains below the OECD average as a share of Gross National Income, its support to Southeast Asia is significant compared to other partners, primarily due to its strategic focus on its Pacific and Southeast Asian neighbors.

Climate mitigation-related development aid, once peripheral, has become central to the Albanese government’s foreign engagement. Programs supporting clean energy, emissions reductions, and sustainable agriculture are now embedded in bilateral cooperation with countries such as Indonesia and Vietnam. These include a commitment of A$200 million in funding for the Australia-Indonesia Climate and Infrastructure Partnership (KINETIK) and A$105 million for enabling clean energy and infrastructure uptake announced during Albanese’s visit to Vietnam in 2023.

This development-driven diplomacy serves both regional priorities and Australia’s strategic interests. As Southeast Asia emerges as an engine of economic growth and a climate impact hotspot, investing in a green regional future can build goodwill and economic interdependence.

Economic and Strategic Certainty

A cornerstone of Australia’s deepening regional engagement is the report “Invested: Southeast Asia Economic Strategy to 2040,” released in 2023 by Special Envoy Nicholas Moore. The strategy outlines 10 priority sectors – including infrastructure, education, digital services, and green energy – and presents 75 actionable recommendations to unlock bilateral economic opportunities.

The strategy recognizes Southeast Asia’s rising strategic importance in the Indo-Pacific region. With a projected population of over 700 million and GDP expected to surpass $4 trillion by 2040, the region offers immense investment potential. But realizing this will require sustained commitment and trust-building from Australia.

This outward strategy also complements Australia’s domestic agenda, particularly its ambition to build future clean industries beyond fossil fuels. Australia simply cannot do it alone. The success of the government’s major Future Made in Australia agenda hinges on establishing integrated green trade markets and leveraging existing trade agreements to facilitate the flow of low-carbon goods and technologies.

The Albanese government’s re-election provides the policy stability to pursue these long-term goals. Australian businesses and institutions can act with confidence, while Southeast Asian partners can be assured that these long-term strategic priorities will be cemented.

COP31 and the Green Energy Supply Chain

Australia is bidding to host next year’s United Nations global climate talks in partnership with Pacific Island nations. The COP31 bid highlights Australia’s ambition to lead on climate action – regionally and globally. Significantly, this would mark the first Asia-Pacific-hosted COP since COP13 in Bali nearly two decades ago. The election result might lead to an official announcement of the COP31 hosting rights in June.

For Southeast Asia, a region facing sea-level rise, escalating extreme weather, and biodiversity loss, climate action is an existential priority. Many countries in the region have committed to net-zero targets and now need assurance of the future global economic low-carbon shift.

Hosting COP31 would allow Australia to spotlight Southeast Asia’s significant role in global decarbonization efforts and promote collaboration on green economic opportunities. A key focus will likely be the development of secure, sustainable green energy supply chains.

Australia is well-positioned to support this. With rich reserves of critical minerals, expertise in hydrogen and strong environmental sciences, it can help build regional supply chains that underpin the net-zero transition. The Albanese government has already made an initial commitment, including an A$50 million contribution to the QUAD clean energy supply chain diversification program announced last year.

With a renewed mandate, Australia is poised to maintain stability in Australia–Southeast Asia relations, focusing on areas of cooperation that promote long-term and mutual benefits.

With Southeast Asia at a major economic and energy crossroads, the relationships and strategic partnerships secured now will be crucial. With a renewed political mandate on climate policy, stronger domestic support, and more favorable macroeconomic conditions, the new Australian government can use this next term to deepen engagement with Southeast Asia, establish itself as a key partner of choice, and help set the region up as a global low-carbon economy powerhouse. The region has everything it needs to succeed – now it is about continuing and strengthening political will.

This article by Climateworks Centre Head of International Programs and Engagement Trang Nguyen was originally published by The Diplomat.