Foreign Minister Julie Bishop says the government will cut Australia's overseas aid budget, but she wants its funding stabilised at $5 billion a year.
Ms Bishop told the coalition joint party room on Tuesday the federal government had to address Labor's budget deficit and debt, and overseas aid would not be quarantined.
The minister said she was starting with a "blank sheet" when it came to overhauling the way aid is delivered and prioritised.
The new aid program would produce "the best outcomes for the region", she said.
Initial details are expected to be spelled out in the mid-year economic and fiscal outlook to be released within weeks.
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The coalition government has already flagged the aid budget would be stripped of $4.5 billion over four years and merged AusAID into the Department of Foreign Affairs and Trade.
