Prime Minister Anthony Albanese will unveil a US$1.3 billion financing facility as the centrepiece of a new package to drive Australian trade and investment in South-east Asia, strengthening regional ties at a time of uncertainty over the US-China economic relationship.

Albanese will announce the measures in a speech to top executives at a special summit between Australia and the Association of Southeast Asian Nations (Asean) in Melbourne on Tuesday (Mar 5), saying “South-east Asia is where Australia’s future lies.”

“In 2022, our two-way trade with Asean member states passed A$178 billion (S$155.9 billion) – greater than our two-way trade with Japan or the US,” Albanese will say according to a text provided ahead of the address. “But we want to do more.”

Australia is hosting the leaders of all Asean nations, bar Myanmar, for a summit to commemorate 50 years of relations. Albanese’s centre-left Labor government has made a priority of improving economic and security links with South-east Asia in the wake of growing uncertainty sparked by the rise of China and the possible return of former US President Donald Trump.

Among the new package of measures are the A$2 billion Southeast Asia Investment Financing Facility, A$140 million over four years to build infrastructure financing partnerships, as well as investment “landing pads” to support Australian businesses in Vietnam and Indonesia. 

In addition, Australia will extend its business validity visas from three years to five and extend the 10-year frequent traveller scheme to eligible Asean countries as well as Timor Leste.

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Australia wants to deepen economic links with nations to its north as it tries to find a path between China, its biggest trading partner, and the US, its key security ally. This comes at a time when the US and China, the world’s two largest economies, are trying to unwind some of their connections forged over the past 25 years and create their own blocs.

Australia’s efforts to diversify its trading partners were highlighted in its new South-east Asia economic strategy at the Asean summit in Jakarta in September.

“While there is so much untapped potential – there is not unlimited time,” Albanese will say. “We must act together – and we must act now.”

Among executives who will attend the speech are Commonwealth Bank of Australia’s Matt Comyn, Rio Tinto Australia’s Kellie Parker, BHP Australia’s Geraldine Slattery and Macquarie Group Ltd’s Shemara Wikramanayake. BLOOMBERG