As recently as last year, Papa New Guinea's prime minister had expressed his concerns over being caught in the middle of a conflict between China and the West. Though the Indo-Pacific nation has acknowledged the convenience of military relations with Australia given their close proximity, it's clear that, along with many other regional countries, it has no desire to provoke China the way the US and its major allies have been doing.
As Australia and PNG are less than three miles from each other at their closest points, their relationship is unique. Due to this fact, it's important for Australia to continue to support its neighbors in a way that bolsters their growth and resilience. Though Albanese must be careful not to make PNG severely dependent on Australian aid, this pact is both an economic and military win for both countries in the face of China's growing Indo-Pacific footprint.
There is a 16% chance that there will be a US-China war by 2035, according to the Metaculus prediction community.