TRADE, not aid, should be Australia's policy when it comes to assisting Asian neighbours, Prime Minister Tony Abbott said, as the opposition called for an inquiry into his government's $4.5 billion aid program cuts.
Speaking in Melbourne on Thursday night, Mr Abbott said foreign aid should be better targeted and Australia should help developing nations stand on their own feet.
He said the growing economic strength of the region needed to be matched in Australia by strengthening of the economy.
Australia's international clout doesn't rest on the size of its aid budget, but on the size of its economy, Mr Abbott said.
"As far as possible, Australian aid should be designed to enable other countries to stand on their own two feet as quickly as possible," Mr Abbott said.
"Trade, rather than aid, is the best way to sustainably boost poor countries' prosperity."
He said reducing the rate of increase in the aid budget would enable the government to ensure it was being targeted effectively.
His comments followed an announcement by Labor senator Ursula Stephens the opposition would be referring plans for $4.5 billion of cuts to Australia's international aid program to a Senate Committee for inquiry.
The matter will be moved in the Senate on Monday.
Deputy Opposition Leader Tanya Plibersek said Australians deserved to know why the government had decided to slash aid funding and where the cuts would be made.
"We know Australians support a strong international aid program. Australia is a rich, generous country that can afford to lend a helping hand," Ms Plibersek said.
Mr Abbott also spoke about the importance of fostering strong relationships with the booming economies of China, India and Japan and in particular, Indonesia, which he said was Australia's, "important overall relationship."
He said the media made the relationship with Indonesia difficult.
"Being Indonesia's "trusted partner" is easier said than done, given the media's tendency to play to stereotypes and past disagreements over East Timor," Mr Abbott said.
On Thursday, the government agreed to a six-point plan aimed at repairing relations with Indonesia two weeks after the suspension in co-operation on November 26.
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