Julie Bishop has questioned whether any media outlet, let alone the ABC, should be contracted to run a government-funded overseas television broadcasting service.
The foreign minister has again raised concerns about the Australian Network at a Chatham House policy forum in London.
The former Labor government in 2011 controversially awarded the $223-million contract to run the overseas network to the ABC over Sky News.
But since coming to power Tony Abbott's government has stressed that the network is a diplomacy initiative designed to promote a positive image of Australia in the region.
It shouldn't be about promoting ABC news programs, the coalition says, with speculation it could be axed in the May budget.
"What I have to consider is whether or not our scarce public diplomacy dollars should be spent on getting a media outlet - any media outlet - to run the program," Ms Bishop said on Wednesday.
"I think perhaps in this day and age there are other ways of projecting your soft power into our region."
The Australia Network is funded by the Department of Foreign Affairs and Trade.
"It's actually meant to be fulfilling the Australian government's foreign policy objectives," Ms Bishop said in London after meeting with her UK counterpart William Hague.
"My question is whether or not there is an inherent conflict in having the ABC contracted to deliver the Australian government's messages into the region."
The minister said that conflict was writ large when the ABC aired claims that the navy abused asylum seekers and published damaging leaks from former US intelligence contractor Edward Snowden.
"The ABC as a news organisation is perfectly entitled to report how it wishes into the region on those two contentious issues.
"But under a soft power diplomacy contract it's meant to be delivering a positive image of Australia into the region - how does it do that?"
Ms Bishop said the ABC had the capacity to project news programs into the region by lifting the geoblock so its ABC 24 channel could be streamed.
