Updated 10:45am

Christian coalition Micah Australia has expressed disappointment the Federal Government has decided to keep foreign aid at its "least generous level" following the release of the budget on Tuesday.

The decision not to restore the foreign aid budget, which will drop to 0.21 per cent of gross national income in 2019-20 and which is slated to drop further to 0.19 per cent in 2021-2022, comes despite the government predicting a budget surplus in the next financial year. But the government did also announce it would end a freeze on indexation of the aid budget and tie it to CPI from 2022-23.

Australia Parliament House

Australia's Parliament House. PICTURE: Michael/Unsplash.

Tim Costello, executive director of Micah Australia, said the outcome was "not surprising from a government who have lost sight of our nation’s role as a global neighbour and treated our aid program like an ATM".

“For years now the Coalition has told us that aid would be restored ‘once we returned to surplus’," he said. "Well surplus is here, yet the poor have been forgotten, and we’ve been left wondering when will this government believe we have ‘enough’ to start being generous again?”

Costello pointed out that despite having a debt "four times" that of the Australia, the UK has kept a promise to fix the level of aid at 0.7 per cent of GNI. Data from the OECD Development Assistance Committee puts Australia at number 19 among aid donor countries, despite its status as the richest country in the world based on median wealth per adult, he added.

“This is at complete odds with who we are as a people – a nation that contributes its fair share, and acts in accordance with the blessings we have received and the generous spiritof the Australian people," he said. “We are lagging where we should be leading."

Jody Lightfoot, director of the Campaign for Australian Aid, described the successive cuts to the foreign aid budget as "a failure of moral leadership".

Noting that the government also announced that it would cut $AUD500 million for existing aid projects in South-East Asian nations to fund an infrastructure facility for the Pacific region, he said Prime Minister Scott Morrison "had an opportunity to show global leadership, instead he has chosen to pander to populism and cut vital services to our poorest neighbours”.

"Australian aid has saved the lives of 230,000 children through our health programs in the last two decades," he said. "Cutting services that support kids in poverty does not reflect the willingness of Australians to help people in need. Despite a budget surplus, the Prime Minister has missed an opportunity to restore a legacy of bipartisanship for Australia’s international development.”

Claire Rogers, CEO of World Vision Australia, also criticised the plans to fund the Pacific infrastructure facility, saying the government had dressed it up as as a boost to aid when it’s no more than a reallocation of funds from a cannibalised aid budget.

“This is not a Pacific step-up; it is a Pacific shuffle,” said Rogers. “The government is shuffling money around the aid budget to make it look like it is bolstering development cooperation, but this could mean other communities are left behind. Australia’s increased involvement in the Pacific region should not come at the expense of withdrawing from other parts of the world. It is unfair and strategically short-sighted.”

She said it was also “extremely disappointing” that the government hadn't meet a commitment it made in a 2017 foreign policy white paper to increase humanitarian assistance to $AUD500 million a year to address crises and conflicts with the figure not to be met until next year's budget.

Among other budget reactions, the St Vincent de Paul Society's national council welcomed the announcments of additional funding for domestic violence programs and aged care within Australia as well as a "small boost" in mental services, education and support programs for newly arrived migrants.

But Claire Victory, the society's national president, said the budget failed to address "two dominant drivers of poverty and disadvantage in Australia – the soaring costs of basic housing and below-poverty-level income support payments".

"We are worried about what appears to be an ongoing meanness in the context of ‘personal responsibility’," she said.

Describing the government's failure to address the low level of Newstart payments for the unemployed as "harsh", she expressed disappointment the budget also neglected the "urgent need" for a long-term strategy to address homelessness and housing for low-income earners.

“Although homelessness in Australia continues to rise, the budget offers no solution to putting a roof over the head of the more than 116,000 people experiencing homelessness and those on low incomes suffering severe rental stress,” she said.

Conny Lenneberg, executive director of the Brotherhood of St Laurence, called for Australia to "urgently reclaim the fair-go society that we all cherish as Australians".

"The Brotherhood of St Laurence believes that means, as a priority, repairing our fraying social security system with its arbitrary compliance regime, invocations of so-called ‘welfare dependency’ and narrowing scope of who is ‘deserving’ - and who is not."

She described a decision to exclude Newstart and Youth Allowance recipients from a one-off budget payment aimed at defraying high energy costs as "bewildering".

Update: Australia's Treasurer, Josh Frydenberg, has announced it will now extend its one time energy assistance payment to Newstart recipients.