Benjamin Reilly

My office in Washington DC overlooks the Australian embassy, a seven-story edifice bristling with satellite dishes and buzzing with a constant flow of visiting politicians and officials.

A short walk from the White House, the embassy is the home base of Australia's relationship with the United States, covering the full spectrum of political, strategic, military, consular and other foreign policy ties.

This month has seen new officials move in - from AusAid, Australia's international development aid agency.

Australia gives no aid to the US, of course. But Washington hosts the World Bank and other major development aid bodies. And Australia is now a big, big player in the $100 billion international aid industry.

How big? Consider this: by year's end there will be twice as many Australian officials in Washington devoted to disbursing aid as those working directly on defence policy, despite our ongoing engagements with the US in Afghanistan and elsewhere, not to mention the overarching issue of the ANZUS alliance. (Many other uniformed defence staff are here but dealing with other issues, mostly procurement.)

This is indicative of a broader trend. Globally, we now give away almost four times as much aid as we spend on Australia's broader foreign policy and diplomatic network.

Ten years ago, Australia spent roughly similar amounts on foreign affairs and on international aid, while both were a mere fraction of our defence spending, then at around $20 billion

No more. Over the past decade, Australia's aid spending has doubled to more than $5 billion, while foreign affairs has shrunk and defence spending has remained essentially static.

Bipartisan commitments by both Labor and Liberal to increase our aid to 0.5 per cent of gross national income would make us one of the most generous donors in the world on per capita terms. Already we are the 15th-largest economy in the world but the seventh largest international aid donor.

As a consequence, Australia is giving aid in new regions such as Africa and Latin America, and has become a major donor to UN development agencies.

But it is also in danger of giving away more money than its traditional recipients can absorb. The announcement by the Prime Minister of a $320 million initiative for Pacific Island women is a good example. Regardless of the merits of the program, it will be impossible to spend such a sum sensibly, given that it is larger than the entire GDP of many of the states it is intended to assist.

Growth in Australia's aid disbursements has paralleled a significant erosion in our formal diplomatic capacity. A 2009 Lowy Institute study found that of 30 OECD countries, only Ireland, Luxembourg, the Slovak Republic and New Zealand have fewer diplomatic posts than Australia. While new posts have been promised in Africa and China, this trend is likely to continue, given current budget settings.

This year, our defence spending will also decline sharply. Despite the 2009 Defence White Paper's commitments to major expansion in our submarine fleet and Joint Strike Fighter acquisitions, Australia will spend $24.2 billion, or just 1.56 per cent of GDP, on defence - less than even the European average.

This Swedish-style profile means that in budgetary terms Australia is on track to become the Scandinavia of the South Pacific - a country which is generous in giving aid to other countries and supporting international institutions but which spends relatively little on its own foreign affairs and defence hard power.

Unsurprisingly, US officials are increasingly voicing their concerns that defence spending in Australia has slipped below America's other allies.

Washington's international aid bureaucrats, by contrast, are delighted (if somewhat puzzled) by the emergence of Australia as a new donor in regions like Africa and Latin America not previously on our radar screen. ''Small country, big ambitions'', one said to me. ''AusAid has become our go-to funding source'' admitted another.

And the Australian voter?

They can be excused for being more than a little confused. Over the course of a decade, with almost no public debate, Australia has apparently transformed its international priorities, becoming an aid powerhouse, a foreign affairs lightweight and - if current spending levels are maintained - a military minnow.

Benjamin Reilly is a professor of political science at the Australian National University, currently a visiting professor at the Johns Hopkins School of Advanced International Studies in Washington DC.