The Government has announced its largest ever aid commitment to the Pacific region of more than $1 billion dollars, including funding to lay an undersea telecommunications cable to Papua New Guinea and Solomon Islands.

Key points: Australia's commitment to the Pacific rises to $1.3 billion dollars

Australia's commitment to the Pacific rises to $1.3 billion dollars Overall overseas aid budget remains frozen at $4.2 billion dollars

Overall overseas aid budget remains frozen at $4.2 billion dollars Observers say concerns about China's regional influence impacted aid decisions

Observers say concerns about China's rising influence in the region have clearly affected Australia's aid program.

Although the commitment to the Pacific has risen from $1.1 to $1.3 billion dollars, the size of Australia's entire overseas aid budget remains frozen at $4.2 billion dollars after deep cuts in recent years.

The Pacific contribution now represents 30 per cent of Australia's total aid budget.

Stephen Howes, the director of the Development Policy Centre, said overall the aid budget was disappointing but it was good news for the Pacific.

He said concern about China's growing influence in the region had been a major factor.

"Australia clearly wants to lift its game in the Pacific and to its credit has been working on that increased engagement with the Pacific for a few years but I think there's no doubt the China factor has accelerated Australia's efforts," Mr Howes said.

The Pacific contribution now represents 30 per cent of Australia's entire aid budget. ( Supplied: DFAT )

Director of the Pacific Islands program at the Lowy Institute, Jonathan Pryke, said the concerns about China had protected the Pacific from the aid cuts handed to other regions.

Australia has committed new funding for an undersea telecommunications cable to Papua New Guinea and Solomon Islands. ( Supplied: TeleGeography )

"I think a lot of people who probably didn't see the value in aid before are starting to turn around to see the real importance that aid has in contributing to the breadth of the relationship, and positive relationship that we have with countries in our immediate region," Mr Pryke said.

A significant feature of the aid budget is a commitment to fund the laying of an undersea telecommunications cable to Papua New Guinea and Solomon Islands — though an exact dollar figure has not been specified.

Some observers were concerned the money would be taken out of the aid programs to those countries but that did not happen and additional funding has been provided.

The Government said it would improve training for Pacific workers through a Pacific Labour Facility. ( Supplied: DFAT )

There are also a number of regional initiatives contained in the budget including what's being called the Pacific Labour Facility.

The Government said it would support the Pacific Labour Scheme by improving training and pastoral care for Pacific workers, and monitoring the impact of labour mobility on Pacific economies.

New Australian High Commission in Tuvalu

A new Australia Pacific Security College will be established to provide leadership training in security and law enforcement.

Australia's overseas aid program remains frozen at $4.2 billion. ( Supplied: DFAT )

Eight million dollars will also be spent opening up a new Australian High Commission in Tuvalu, a move welcomed by Australia's former high commissioner to Fiji, now academic, James Batley.

"[Tuvalu] is one of the few small Pacific island countries where Australia hasn't had a permanent diplomatic presence and I think that's really welcome and I'm sure the Government of Tuvalu will be delighted at that," Mr Batley said.

Mr Howes said the overall funding boost, and the initiatives, back-up the Government's stated aim of "stepping-up" relations with its Pacific neighbours.

"It certainly embodies a step up in our effort to the Pacific, it's just unfortunate that you couldn't say overall it was a step up in our international development partnerships," he said.

New Zealand announces $670 million aid funding boost

Winston Peters says New Zealand is significantly increasing aid funding. ( AAP: Karen Sweeney )

Meanwhile, the New Zealand Government announced it would increase funding for its overseas aid program by 30 per cent, with much of it earmarked for the Pacific.

As part of its "Pacific reset" strategy, New Zealand Foreign Minister Winston Peters said aid funding would be boosted by $670 million dollars over the next four years to correct years of neglect.

"The previous government weakened our hand in the Pacific at the very, and most critical, time the region has become a more crowded and contested strategic space," Mr Peters said.

"Today that stops. We said we would shift the dial and we have."

Funding for New Zealand's Ministry of Foreign Affairs and Trade will also be boosted and 50 new full-time staff hired.

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