New Zealand's Prime Minister John Key expects a likely change in government in Australia with accompanying cuts to its foreign aid budget will put a squeeze on small Pacific nations.

Opposition leader Tony Abbott, who is expected to win Saturday's election in Australia, has pledged to axe $A4.5 billion (NZ$5.2b) over four years from foreign aid and development assistance, and instead divert the funds to major road projects at home.

Non-governmental organisations say the cuts will be devastating to recipient countries and groups.

The Labor government had planned to ramp up its aid budget by several billion dollars over the next five years, and the cuts will essentially freeze the budget at its current level, Mr Key believes.

"I guess (Liberals leader Tony) Abbott is thinking if he becomes prime minister tomorrow he's going to inherit a bigger deficit than he thought and lots of other issues to deal with, and like every political party, you've got to make the numbers add up," Mr Key told media.

Speaking in the Marshall Islands, where he attended the Pacific Islands Forum this week, Mr Key said Australia's past aid to the Pacific has been significant, including a commitment of more than $A1.1b in 2013/14.

"These are countries that need a lot of support and help so if there is less money coming their way, they'll obviously feel that over time," Mr Key said

"It will certainly make the money that we spend here even more valuable."

UNICEF Australia has warned the cuts will come at the expense of children's lives, while World Vision Australia's chief executive Tim Costello called the cuts short-sighted.

"It's really cheap to say: 'We are just going to look after ourselves - charity begins at home'. We can do both. This is not a good global look," he said.

New Zealand's foreign aid program NZAid has allocated $638m over three years to country-specific programs in the region and $154m in regional activities.

 

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