Potential Rebuttal:
1. If we were to wait until we got our own country perfect, we wouldn't be able to help anyone else at all - all of us live in an imperfect world. While we chase the little things in our own countries, we are ignoring the much more weighty things in other countries.
2. When one of the Australian terrorists was arrested (not Habib or Hicks, the other bloke whose name escapes me) it was discovered in his papers that the 2000 Olympics was considered as a potential target, but was dismissed. This shows that terrorist organisations have considered Australia as an enemy even before we joined the alliance (although that coulda been predicted easily, given our history)
3. Tied aid can assist in making sure that the aid goes into the right places (that's when, for example, Australia gives Zambia money to build schools with, but only if they contract the building to an Australian company) although the money ends up in the rich country again. Aid is all about what one does with it, and it can be used in such a way that the project is sustainable, even when the foreign aid is gone.
A point for you to consider as part of your argument:
Corruption in the government cannot be discounted.