The Director of the Development Policy Centre at the Australian National University says the Pacific region is being sheltered for now as aid cuts apply to other parts of the world.
The Australian government has decided to reduce its foreign aid budget by 7.4 billion US dollars, spread over the next five years.
Stephan Howes says the foreign aid budget is being cut by ten per cent in real terms over the next three years.
"So although there is this ten per cent cut, the Pacific and PNG are being shielded fom those cuts and that's because money is being free up elsewhere partly by a refocussing of the aid programme on the region. So there's going to be less aid for Africa, less aid for Latin America, and that will help protect the Pacific."
Stephen Howes says the Papua New Guinea government is being granted an extra 56 million US dollars next year for agreeing to process Australia's asylum seekers at the Manus Island detention center.