The New Zealand Ministry of Foreign Affairs and Trade says there is no underspending in its aid budget.
This comes after comments by Australian National University aid researcher Terence Wood who said an 18 percent increase in the aid allocation for the coming year is a result of two consecutive years of underspending.
But a statement from the ministry says this is not the case.
It says the New Zealand aid budget's three-year cycle is designed to provide more flexibility for large long-term overseas development projects.
It said the increase in funding for the coming year is a result of some large activities and projects now getting underway.
Mr Wood however said he doubts, given its spending over the last two years, that the aid programme will be able to spend the money.
The sum yet to be disbursed is 38 percent of the more than $US 1.23 billion allocated for the current three-year cycle which ends in June next year.