On the face of it, Rudd's declamations this week that Pacific aid should be constructively targeted to improve the lot of our neighbours, is reasonable. (here) His point being that it is better to foster strong community than to mop up the mess afterwards.
The PMs point that there is a great weakness in this system needs also to be taken into account. He, supported by such luminaries as the ANU's Hugh White, makes the point that governance structures in the South Pacific are weak and just throwing more money at the system won't work unless there is corresponding improvement in these structures.
But how you do this beats me/Perhaps we need to listen more carefully to what the South Pacific wants from Australia and not simply use our aid budget to further our own influence. It is this latter attitude that our neighbours find so patronising.
I am not suggesting that we should just become a sort of political Santa Claus and address the self-interest of the powerful with gay abandon, but we should also recognise (and this I think is Rudd's point) that it is to our advantage to have strong, independent neighbours. Every parent has to learn this about their children. We need to learn it about the South Pacific