Australia has provided a further SBD100 million in direct budget support to Solomon Islands, to help the government strengthen economic stability, improve public financial management and deliver on its policy priorities. The package was formalised at a signing ceremony in Honiara, where Solomon Islands Minister for Finance Rexon Ramofafia and Australian High Commissioner Jeff Roach signed the financing agreement.

The new contribution follows an equal SBD100 million package delivered in June this year, taking Australia's direct budget support to Solomon Islands to SBD200 million in 2026. Australia is the Pacific island nation's largest development partner, and the funding is intended to help the government deliver essential services while it pursues a programme of public finance reform.

What the funding will support

The support is aimed at the government's reform agenda, including boosting revenue collection, strengthening accountability and developing new grant regulations to improve oversight of how government grants are managed. The Australian High Commission said the reforms are designed to make sure public resources are used effectively and deliver positive outcomes for Solomon Islanders.

The signing event was also attended by Minister for Mines, Energy and Rural Electrification Derrick Rawcliff Manu'ari and Minister for National Planning and Development Coordination Peter Kenilorea Junior, underlining the breadth of the government's involvement in the partnership.

Ministers welcome the partnership

Finance Minister Ramofafia welcomed Australia's continuing support, saying the partnership and the significant budget support would help Solomon Islands keep delivering services to its people and advancing its national development priorities.

High Commissioner Roach said the package demonstrated Australia's enduring commitment to Solomon Islands and to a shared vision of a stable, prosperous and resilient Pacific region. He added that Australia remained committed to supporting good governance, stronger public finances and improved livelihoods across the country, and to standing alongside Solomon Islands as a trusted partner.

A long-standing development partnership

Budget support differs from project funding because the money goes directly into the government's budget, giving it flexibility to fund its own priorities, in this case service delivery and economic reform. Australia's development programme in Solomon Islands is its third largest globally, and the two countries work together across policing, justice, health, education and infrastructure, as well as through labour mobility schemes that allow Solomon Islanders to work in Australia.

The package comes as Pacific island nations continue to face pressure from rising living costs and the long-term costs of climate change, which make stable public finances harder to maintain. For Solomon Islands, a country of scattered islands spread across a wide stretch of the south-west Pacific, delivering services to remote communities is expensive, and direct budget support is one of the main ways development partners help bridge the gap.

The government in Honiara, led by the GREAT coalition, has made economic stability and public financial management central to its programme since taking office. The Australian funding is tied to that agenda, with the new grant regulations and revenue measures intended to leave the country's finances in a stronger position once the support is spent.