Australian High Commission
Papua New Guinea

150618 SPEECH 2015 PNG Update

2015 PNG Update
Inaugural Address by
HE Ms Deborah Stokes
Australian High Commissioner to Papua New Guinea
18 June 2015

It is a great pleasure and privilege to participate in the 2015 PNG Update. This conference is on its way to becoming a flagship event for economic and public policy analysis and debate in Papua New Guinea, and Australia is proud to be a sponsor.

The agenda for this year’s Update provides in a snapshot the exciting future PNG faces – the opportunities and potential. It also shows the risks.

PNG is very different to what it was five years ago and in five years there will be much more change. The LNG project has been an eye-opener about the potential for PNG.

Deepening our strong, diverse relations with Papua New Guinea is a high priority for Australia.

Today I want to talk to you about how Australia’s relationship with Papua New Guinea is growing and responding to changing opportunities in both our nations, and to show that we are setting a course for our relationship which is one of partners working closely together in a dynamic region. 

Our economic links are very strong. Nothing indicates this better than the investment figure.

Australian investment in PNG is valued at $20 billion.

This is double the level of Australian investment in Indonesia.

Australia was PNG’s largest trading partner in 2013-14, with bilateral trade of $6.8 billion. Over 5,000 Australian companies do business with PNG.
Geographic closeness, historical ties and people to people links underpin this strong economic relationship. But above all else, Australian businesses clearly see the opportunities in PNG.

Our closeness is demonstrated also in the shared policy challenges we now face.

For our two countries, extractive industries are a driver of growth and prosperity. The theme of the PNG Update, ‘Development Challenges in the LNG Era’, is relevant to both our countries.

With dramatic recent falls in world commodity prices, both of our countries are faced with difficult policy and budget decisions to ensure the long-term stability of our economies and the prosperity of our people.

Both governments have acknowledged the impact on revenues of lower prices for petroleum, natural gas, and other commodities, and are taking corrective action. The Treasury Secretary, Mr Dairi Vele, has announced that PNG will commence a review of its budget to adjust to that new economic reality.

As stated recently in Lae, by Australia’s Minister for Trade and Investment, the Hon Andrew Robb MP, both Australia and PNG need to take this opportunity to strengthen our economies – to make them ‘match fit’.

We need policies that promote increased productivity and attract investment.

Australia is working with PNG to build further on our economic partnership. The Australia-PNG Economic Cooperation Treaty (ECT) was signed by Prime Minster Abbott and Prime Minister O’Neill on 21 March 2014.

This Treaty brings trade, economic cooperation and development cooperation under a single agreement, providing a framework for growing economic ties between Australia and PNG - a relationship that is more trade than aid. The Treaty will come into force once relevant processes in both countries are concluded.

Australia is working with PNG in other ways to help build the enabling environment for business and investment. The Pacer Plus trade negotiations are one important part of this.

Our development cooperation program will also continue to support the building blocks of a modern economy – including through support for law and justice, education, health, governance and infrastructure, and support for gender equality.

But we are changing the way we implement this assistance to give greater recognition to the role of the private sector as the engine of growth. As a consequence, 30 per cent of Australia’s development program to PNG will be redirected to support private sector-led growth and aid for trade by 2017. As part of this commitment, a new Private Sector Development Framework identifies a range of investments to increase the role and productivity of the PNG private sector.

As nearly 85% of the PNG population derive their livelihood from agriculture, Australia is increasing support to rural small holders with a focus on increased productivity, value chains, and access to markets and services.

Lack of economic infrastructure inhibits private sector growth and as requested by the PNG Government, Australia will increase its investment in infrastructure in PNG as a proportion of the aid program from 37 per cent in 2014 to approximately 50 per cent in 2017.

Australia is engaging the private sector as a strategic partner to bring fresh ideas to the development and economic challenges faced in PNG and to leverage increased combined resources. We have in place a very constructive aid and development dialogue with the private sector in PNG, facilitated by the Australia-PNG Business Council and the PNG Business Council. We have agreed to work together to explore practical TVET collaboration and also in the area of fighting and preventing Tuberculosis.

We have launched a new round of the Incentive Fund with a new feature that invites the private sector to make proposals.

Turning to other areas of our relationship, Australia and PNG have initiated two path-breaking programs.

The first is the New Colombo Plan. Like the original historic Colombo Plan that started in the 1950s, it is focused on building people-to-people links and regional engagement that will last a lifetime.

The New Colombo Plan supports this vision by offering Australian students scholarships to undertake study, internships or mentorships at institutions in our region.

Twelve students from the Federation University in Victoria have been funded through the 2015 round to come to PNG. The first seven of these students are close to completing their four week professional teaching practicum in Oro Province, working alongside local teachers in the Kokoda Elementary School and the Kokoda Skills Training Centre. I could not think of a more suitable location for the first placements under the New Colombo Plan in PNG.

The other five students will arrive in Papua New Guinea to do their practicums in mid-2016.

The second pathbreaking initiative is the Pacific Leadership and Governance Precinct. The Precinct will support PNG’s vision of a more professional and ethical public service. This follows an MOU signed in December 2014 by Australia’s Foreign Minister Julie Bishop, PNG Minister for Public Service, Sir Puka Temu and Minister for Higher Education, Mr Malakai Tabar.

Together, PNG and Australia will strengthen two key institutions – the transformation of the existing School of Business Administration at the University of PNG into a new School of Business and Public Policy; and transformation of the Institute of Public Administration into the School of Government.

The Precinct as a whole will provide training, mentoring, undertake research to inform policy, and foster public debate. The Precinct will also support improved infrastructure at the two institutions.

PNG and Australia have already made strong progress on the Precinct.

Since February, the Precinct has delivered courses on public policy, leadership, company directorship, and public administration.

The Precinct is also supporting relationships between Australian and PNG institutions. And it will build on this to become a regional initiative over time.

The Australian National University has signed a new partnership with the University of PNG to establish greater ties between both our countries’ national universities. The ANU will provide visiting lecturers, support collaborative research and student exchanges.

The University of Queensland is also working with the University of PNG to deliver new qualifications in governance and public policy.

The Australian Public Service Commission is working with the IPA to deliver diplomas in public administration and accounting.

I wish to now turn to three other areas of our relationship which show that we are working together to build an even stronger partnership between our two nations in a dynamic region.

We are working together in the Pacific Islands Forum under the strong leadership of PIF Secretary General Dame Meg Taylor to help make the region’s premier regional body as effective as possible.

We are also working closely with PNG agencies to support its hosting of APEC in 2018.

In 2014 PNG and Australia initiated the annual bilateral security dialogue. For the first time we had a cross section of agencies from each country with responsibility for various aspects of security – including defence, foreign affairs and police agencies as well as other agencies with border protection roles.

This dialogue will help deepen cooperation and understanding between two close neighbours who share similar security challenges and outlook.

Through all of these steps we are building a dynamic, cotemporary relationship between our two countries, fit for the 21st century.

The Update itself makes an important contribution to this contemporary relationship. It brings together researchers, policy makers, and the private sector to think about the contemporary issues in PNG. It promotes collaboration as well as understanding, and importantly public debate about central issues.

I commend the University of Papua New Guinea and the Australian National University for their hosting of this very important conference. I also wish to commend the contributors – the largest number ever. This is a very positive indicator of healthy debate and growth in the research community in PNG.

I wish you the very best for a successful two days.