Aid groups are accusing the Coalition of breaking an election commitment after it revealed their funding would be cut mid-year as part of a $650m reduction in the former government’s budgeted foreign aid spending, leaving 2013-14 spending $107m below what was spent last year.

Foreign minister Julie Bishop announced the cuts for the groups as well as a complete defunding of international environmental programs. The government is redirecting a pared back aid budget towards the region and maintenance of spending on countries such as Papua New Guinea, Indonesia and Nauru, whose co-operation is necessary for the success of its asylum policy.

Organisations such as Care, Save the Children, Caritas, ChildFund, Plan International and the Fred Hollows Foundation – who have partnership agreements with the government – have had their current year funding cut by about 8%.

They say that means they are losing money already allocated to programs related to water and sanitation, elimination of violence against women, disaster reduction work and small-scale agriculture, among others.

The organisations say the cuts clearly break a Coalition promise not to cut their funding when it announced a $4.5bn cut to the aid budget over the next four years two days before the federal election.

At the time of that cut, the then shadow treasurer, Joe Hockey, and shadow finance spokesman, Andrew Robb, said “the Coalition will reprioritise foreign aid allocations towards non-government organisations that deliver on-the-ground support for those most in need”.

“That will also mean putting more money into NGOs who are on the ground and who can deliver aid more efficiently than through AusAID or indeed through some of the multilaterals that we’ve been putting money into in increasing numbers because AusAID cannot handle the increases in the budget,” then foreign affairs spokeswoman Julie Bishop said.

The government said it needed to redirect the $4.5bn towards domestic infrastructure. The cut was from projected expenditure – with the aid budget continuing to grow in line with inflation.

“Under the previous Labor government, the rapid growth in Australia’s aid budget was neither targeted nor sustainable ... This year’s aid expenditure will be $107m less than last year. From 2014-15 the $5bn aid budget will grow each year in line with the consumer price index,” Bishop said in a statement on Saturday, “confirming” the cuts after they were announced in the Australian newspaper.

She said the government would now consult NGOs and other governments to set benchmarks and stricter reporting standards to ensure future aid spending achieved its objectives.

Julia Newton Howes, chief executive of Care Australia, said her organisation had lost $500,000 from a $20m budget this year.

“This is for aid we had already programmed this financial year. We are now going to have to scramble to work out where we can cut,” she said.

Newton Howes, who is also vice-president of the Australian Council for International Development (Acfid) said it was “particularly disappointing that the government is making cuts it promised it would not make before the election”.

The government has minimised cuts for countries in the region and those involved in its asylum policy.

Aid funding to Indonesia is $532m, almost $50m more than it received last year, but about $60m less than promised by Labor. The $448m promised to Papua New Guinea has been retained. Nauru’s funding has also stayed the same.

The International Labor Organisation will now get no funding from Australia and detailed tables show international environmental programs, already pared back under Labor, will now also get no money.

The government has said it believes aid funding was skewed under the former Labor government as Australia made promises linked with its bid for a seat on the UN security council.

The cuts put Australia even further away from meeting the United Nations’ Millenium Development Goal of developed nations spending 0.7% of gross national income (GNI) in aid by 2015. Labor governments had already twice deferred Australia’s target of 0.5% of GNI by 2015. Bishop made no mention of the target in her statement.

She said she intended to “ensure the Australian aid budget is managed effectively and directed to organisations delivering on-the-ground support to those most in need”.