The commission has also backed the government's plans to abolish the ABC-run Australia Network, which broadcasts Australian television into 46 Asia-Pacific countries.
The commission says almost 12,000 Australian travellers required consular help in 2012-13 - putting a significant burden on the Department of Foreign Affairs' budget.
While previous reports have proposed the idea of some kind of consular levy, the commission has recommended a cost recovery arrangement perhaps based on the UK model.
The UK charges a STG130 ($A237.29) per hour "attendance fee" for consular help.
"Australia should consider imposing a similar cost recovery arrangement," the report says.
Labor rejected calls for new consular fees and Foreign Minister Julie Bishop has appeared cool on the idea. She recently ordered the development of a new "consular strategy".
The commission also recommends the Australia Network and the International Relations Grants Program be cut.
The ABC has the current $223 million 10-year contract to run the network, established to promote Australia's interests in Asia.
But the commission says the money would be better directed to other areas or returned to the budget.
The report also recommends Tourism Australia and trade promotion agency Austrade be subsumed into DFAT.
The commission also wants the government to re-assess the need for embassies in high-cost locations and review the overseas conditions and allowances for diplomats.
It also argues the government should "rationalise" Australia's membership of international organisations and consider the further outsourcing of passport production.
The commission also takes aim at the government's $5 billion overseas aid program, which is now administered by DFAT.
It says while the aid program serves the nation's interests by promoting stability and prosperity, there is room for improvement.
It urges the government not to tie aid spending to any particular "artificial" targets, like Gross National Income.
It says aid spending should increase no faster than inflation.
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