Aid programs failing to meet strict performance benchmarks will be given a year to shape up or get the chop under a tough new strategy being adopted by the federal government.

The “new paradigm” aims to deliver greater value for money from Australia’s $5 billion aid budget, and will link performance with funding in the hope that cash will be spent where it’s most effective.

But it’s not just aid programs being put on notice, with countries receiving Australian assistance being warned they’ll be closely scrutinised to ensure the money’s being used appropriately.

This could be tough for countries like Papua New Guinea, which has failed to meet international targets for improving living standards despite record amounts of aid from Australia.

The Greens have accused the Federal Government of corporatising Australia’s foreign aid system. Photo: Shutterstock.

Foreign Minister Julie Bishop said ending aid dependency would help “mature” bilateral ties and develop stronger economic partnerships.

“Sovereign governments have responsibilities to their citizens and should not use the provision of foreign aid to shirk those responsibilities,” she told the National Press Club on Wednesday.

The government has placed economic growth at the heart of its new aid strategy, believing jobs and trade are the best way to lift the living standards of the region’s poorest people.

High priority will be given to projects that address infrastructure shortages in poorer countries, with all new aid investments required to engage the private sector for ideas before being approved.

This sparked outrage from the Australian Greens, who accused the government of “corporatising” the aid program to such a degree it would cost lives.

Charity groups were far more forgiving, welcoming in particular the emphasis on programs to empower women and a new fund to reward organisations that develop innovative ways to tackle poverty.

CARE Australia chief executive Julia Newton-Howes said it was crucial a new government taskforce set up to oversee this initiative ventured out of Canberra to see realities on the ground.

“You might have a lot of people in suits who are rather divorced from the reality in the field,” she told AAP.

“You might have a lot of people in suits who are rather divorced from the reality in the field.”

Other aid groups warned that only time would tell if the government’s rhetoric lived up to expectations and delivered better results.

Labor leader Bill Shorten called the announcement a stunt designed to hide the $7.6 billion worth of cuts over five years made to the aid program in the May budget.

“This is just another excuse, another whitewash, of more cuts which we weren’t told about before the last election,” he told reporters in Canberra.

– with AAP