Foreign Minister Julie Bishop rolled her eyes at Joe Hockey's mention of the budget razor gang in parliament.
The federal treasurer was praising the late prime minister Malcolm Fraser for being the "great initiator of the expenditure review committee", better known as the government's razor gang.
The cabinet committee is in charge of finding budget cuts across the government and has in the past taken a blade to the foreign aid budget.
Mr Hockey said the committee had endured "much to the chagrin of my colleagues".
While some coalition MPs laughed, Ms Bishop rolled her eyes, shook her head and held her head in her hands.
There are reports Mr Hockey plans to announce further cuts to the foreign aid budget in a bid to balance the books.
Ms Bishop earlier said she was not aware of any more budget cuts and would take the matter up with Mr Hockey.
"I believe we have it about right," she told reporters in Canberra on Monday.
There have been reports of concerns among some in the Liberal Party that cabinet members have been deliberately leaking against Ms Bishop to head off her leadership prospects.
Labor foreign affairs spokeswoman Tanya Plibersek said Ms Bishop's "spectacular failure to keep a poker face" during Mr Hockey's speech was telling.
"Cuts are being inflicted in her portfolio area without consultation or her agreement," she told reporters.
Asked if Labor would reverse the cuts if it won office, Ms Plibersek said the party would do better in aid than the Liberals.
Finance Minister Mathias Cormann said the reports of further aid cuts had also come as a surprise to him.
Later Ms Bishop's parliamentary secretary Steve Ciobo would not pre-empt whether foreign aid would be cut in the coming budget.
"I would love Australia to be one of the most generous nations, if not the most generous nation on the planet, but we've got to do it in the context of what we can be able to afford," he told ABC radio.
Mr Ciobo said every dollar of cuts to aid are "100 per cent a consequence of Labor's reckless spending".
Australia will remain the tenth most generous OECD country when it comes to foreign aid, he added.
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