Foreign Minister Julie Bishop has challenged risk-averse public servants in the midst of upheaval in her department to find smarter ways to deliver aid.
"We do not accept that the old ways of delivering aid should remain," Ms Bishop said.
Staff reductions and the organisation's controversial incorporation of AusAID has hurt morale at least temporarily at the elite Department of Foreign Affairs and Trade.
Ms Bishop said the changes were difficult but necessary to make sure the aid budget was sustainable.
She has been inspired by Apple co-founder Steve Jobs and Stanford Business School in the United States to launch a $140 million innovation hub next year.
Public servants will team up with people in the private sector to come up with inventive ways to make aid dollars go further and solve a "seemingly intractable" problem overseas.
"It's a completely different way of thinking," Ms Bishop said.
"The public service is risk averse, as it should be, because it is dealing with taxpayers' funds.
"But I know we cannot continue to spend money as we've done in the past if it's not going to make a positive difference."
Ms Bishop has revealed in the past week she took away AusAID's independence late last year partly because she was informed Australia had been defrauded on several overseas aid projects.
On Thursday she said the department had shown great care in bringing AusAID into DFAT.
"It's been seen as a merger, not a takeover," she said.
"Sure, it's now called the Department of Foreign Affairs and Trade but the aid component is significant in it because it is an absolutely vital part of the government's foreign policy.
"The flagship of our foreign policy is our aid program."
On Tuesday the minister, who has attained political rock star status, will launch a photographic exhibition at the Nishi Gallery in Canberra called Close Up - Celebrating 40 years of Australian Aid.
The pop-up exhibition will run from Monday to Wednesday and can be taken later across the nation.
"This is a tribute to [the public servants] and to everyone who works toward the overseas delivery of aid," she said.
One of her favourite photos was of public servant and past Liberal foreign minister Percy Spender at the first meeting of the Colombo Plan, which would send foreign students to Australia. The New Colombo Plan she oversees sends Australian students overseas.
Ms Bishop is unashamedly focused on the Indian Ocean-Asia Pacific region. The government will invest more than 90 per cent of the nation's country and regional program funding in the region around Australia.
"(Spender) is one of my favourite former foreign ministers. He was talking about Australia's engagement in the Asia Pacific back in the 1950s," she said.
Another photo shows the Colombo Plan's 2000th student, Che Ummi Kelson Binte Maidin, of Malaysia, a nursing student in Australia in 1957, holding a koala.
"I very much believe in the power of koala diplomacy," Ms Bishop said.
"Koalas are still a big hit."
