The Vanuatu government has been told that it must make up its mind whether it wanted Australian aid or not.
The Australian Foreign Minister, Alexander Downer, today described the situation in Vanuatu as fluid.
Australia, Vanuatu's biggest aid donor, warned last month that it would slash aid unless Vanuatu cracked down on corruption and took action to improve the rule of law.
Mr Downer says Australia will not be spending money on good governance and economic management programs in Vanuatu if the Vanuatu government itself doesn't want to pursue those types of programs.
He says he is not pushing the government, just speaking out on behalf of Australian taxpayers..
Mr Downer says Australia can make a big difference in areas like governance and economic reform, but only if the local government itself wants to do those things as well