Speech

At the Australia-Papua New Guinea Business Council Breakfast

Well, thanks very much John.  Welcome Senator Ellison, and ladies and gentlemen.

I also acknowledge the High Commissioner, Michael Potts.  It is also a nice opportunity to do a function with him as well. He has been working very hard over the last few years, while he’s been here as the High Commissioner.

Well, it’s always a pleasure for me to come back to Port Moresby. I think that, as Foreign Minister, I’ve been here a dozen or so times. I’ve not really counted them.

But in my early time as Minister, I came here to help with the Bougainville peace process.  I guess we focus very much on the difficulties and troubles at that time, but it is not a bad thing to reflect on the great successes of the past.  I think one of the great things that have been achieved in Papua New Guinea over the last few years has been peace in Bougainville.

It’s interesting the way that, as human beings, we just move on – we just pop it back and move on.  But this is a country which was torn by the civil war in Bougainville.  Australia played a key part, along with New Zealand, in helping Papua New Guineans, and Bougainvilleans specifically, to resolve that problem.

It did cause some substantial ructions in our relationship with the Papua New Guinea government, particularly during the Sandline Crisis.  But I think the confrontation that we had with each other over that led to good outcomes eventually. So, I just I want to mention that before I get into the issues that I’m dealing with while I’m here because when I think about Papua New Guinea, I think about a lot of good things that have happened over the last few years.

When I think about it today, following up on what John said, I know that a lot of economic statistics are looking a good deal better. Papua New Guinea has benefited, of course, substantially from the massive resources boom which is being driven, more than any single factor, by China.

I was watching the Today Show on TV news this morning and it was foreshadowed that BHP Billiton, Australia’s largest company and certainly the world’s largest mining company, is going to announce a profit of $8 billion. That it serious money, that is a big profit. Is here anyone here who works for BHP? I see you all laughing, but it reflects the fact that, of course, resources have been doing extraordinary well -and that has helped Papua New Guinea.

There is no doubt too, and there is a real sense of anticipation, now about the PNG Queensland Gas Pipeline.  I’m very encouraged by the fact that customers have been found and there is every chance that the project will go ahead.  That will be very good for Papua New Guinea, particularly bearing in mind that a number of long standing projects are starting to come to the end of their lives and will affect the Papua New Guinea economy.

As you know, though, we have given quite a lot of consideration to our aid program. We are coming up to the 30^th anniversary of Papua New Guinea’s independence.  The Governor-General will be up here next month to help celebrate that historic event. He is very much looking forward to it. I was only talking to him only about last week. He and his wife are both coming.  It is going to be a very important ceremony in the history of Papua New Guinea, and for Australia.

But it is worth remembering that over those 30 years we have spent $10 billion of taxpayers’ money here, and by that I mean in aid to Papua New Guinea.  That is an enormous amount of money. I think a lot of the aid program has been good. We have assisted in particular areas like health, education and infrastructure.  We still have a long way to go, not only in terms of ensuring the effectiveness of our investment, but for the Papua New Guinea Government continuing to build the country in those three areas, as well as others.

But we did think a year or so ago that it might be possible to get better value for our aid, and get better outcomes for our aid programs, if we are able to assist the Papua New Guinea Government more robustly with its reforms.  We therefore put together what became known as the Enhanced Cooperation Program, not a very elegant name, the ECP.

The idea of the ECP was that we would have Australians in in-line positions, very unusually by way of an aid program. Outside of the Solomon Islands and what we’ve done there, I’m not sure where else this is being tried.  Australians are working directly in a number of government departments here, as well as in the administration of police. Controversially, we even had Australians deployed as part of the ECP into in-line positions, if you like on the beat for police. 

You would all be aware of the fact that this depended on there being appropriate legal immunities for them, in particular for the Australian police on the beat. We obviously couldn’t take the risk that they would be subject to vexatious actions of some kind or another, vexatious litigation. We had to provide appropriate protection for them. Of course we would not argue that they should be protected from illegal acts and abuse - but that would be dealt with under Australian law not in Papua New Guinea.

Anyway, we reached an agreement on those immunities that is consistent with the sorts of immunities that we have for Australians who are deployed in different parts of the world, doing different things.  These immunities were actually consistent with the immunities that have been extended to the Papua New Guineans who are working in the Solomon Islands, so there was nothing particularly surprising about it.

We have to accept the rule of law.  We insist on the rule of law in our own country, and we think around the world it is very important that the rule of law be applied.  It is a basic principle of governance.  The Supreme Court ruled that the immunities were unconstitutional.  Bearing that in mind, we obviously could not any longer leave the in-line police on the beat here in Papua New Guinea.  So there were 154 of them, I think, that were here at that time.  They have been withdrawn and since then we have been having discussions with the Papua New Guinea Government about what we might be able to do to salvage the Enhanced Cooperation Program.

We have obviously given thought as to whether we wanted to salvage it, or whether we didn’t.  We have come to the conclusion that whilst the Papua New Guinea Government will clearly not, and the Papua New Guinea Parliament by the way, will clearly not amend the constitution to provide for those immunities and we’re disappointed that they won’t. 

But we obviously accept that they clearly won’t.  Even if they, the government itself, indicated it would be prepared to amend the constitution it’s very questionable that they would get the numbers in parliament to achieve it.  In any case it would take a very long period of time involving enormous domestic controversies.

So I’ve looked at this very closely and I have come to the conclusion that the immunities simply aren’t going to be possible because the constitution isn’t going to be amended.  We just have to live with the consequences of that. But we decided that what we would like to do is salvage as much of the Enhanced Cooperation Program as appropriate.

So, if you like, we are going to continue with the Enhanced Cooperation Program, subject to the Papua New Guinea Government agreeing that we should.  Because we have had the feedback, just as John was saying this morning, about the work that the 43 Australians working within the Papua New Guinea public service are doing. Although in theory I suppose they are not in line positions, they’re not barking orders around the government departments.  They are now advisers.

There is no doubt that from the perspective of the Papua New Guinean Ministers who are directly involved, from the perspective of the deployees - some of whom I know are in this room today - the perspective of the deployees themselves and also from the perspective of the general community in Papua New Guinea, they are having a very big impact. 

There is no doubt from the information that’s been provided to me that they are improving substantially the performance of key government departments - Treasury, the Finance Department, the Immigration component of the Foreign Affairs and Immigration Department, the Customs Service and so the list goes on.

It seems to me that it would be pity to withdraw all of those people and to destroy the capacity that they are already deploying to improve the performance of those government departments.  There is no doubt in my mind, and in the mind of our High Commissioner and the staff here in the High Commission in Port Moresby, that if we can assist the Papua New Guinea Government to improve the performance of the bureaucracy, that is going to be a key component of ensuring that our aid program is more effective.

The Papua New Guinea Government, the level of quality of governance and the economy from your point of view as business people, would work better. So, that is the first thing I’d say about the Enhanced Cooperation Program, that that component of it we would like to keep.

The second thing I’d say is that we do need to protect the interest of the Australian taxpayers.  I have to confront them day in and day out in Australia - I have an electorate and we, as a government, have to face the electorate every three years. It’s a very uncertain thing.  The electorate, quite rightly, I don’t think you should make a mistake about this. The electorate in Australia, quite rightly, think on one hand well it’s all very well to give aid to other countries and yes, in principle, that sounds like a nice idea.  But secondly, we wouldn’t want to think that that money was being wasted and we wouldn’t want to think that there was any corruption involved which would detract from the effectiveness of our aid programs.

Now for us the issue of corruption is throughout much of the developing world. I don’t mean to be so specific to Papua New Guinea, but for us the issue of corruption is an enormous issue. There’s been a lot of debate in recent times about how developed countries should be increasing their aid in proportion of GDP, that there should be a doubling of aid to Africa.

You might have heard of this campaign led by Bob Geldoff, which you would have seen on television. This is all very well, provided that the quality of governance in the countries which are the recipients of this aid, provided the quality of governance is good. If there is widespread corruption, if there is widespread incompetence, then all the aid in the world is not going to help. In fact, if anything, it is only going to make the situation worse because it’s going to expand the opportunities for corruption.

So what we thought we would do here is talk to the Papua New Guinea Government about strengthening the institutions in Papua New Guinea which are designed to address the problem of corruption. For example, within the Royal Papua New Guinea Constabulary we would like to see a properly resourced anti-corruption unit – well-resourced, I mean they do have one but I mean it has a budget of K300-K400, 000 a year and employs a very small number of people.  We will help the Papua New Guinea Government to at least fund this element of their policing.  We also will put Australians, we will be prepared to put Australian advisers, into those parts of the Papua New Guinea Constabulary.

Certainly I’d say that although we can’t send Australian police back here to the beat, if you like - even if the government wanted to, we would not be able to get the police to come. They could not come without the immunities - you can make people do a lot of things, but you cannot make people go overseas if they don’t want to go overseas.

If they want to stay in Australia, that’s their right. So we cannot force them back here, even if we want to, and they will not come back here without those immunities. It’s not to put the onus on them. We are not proposing to even try to get them to come back here without those immunities. We would not do it. It would put Australians too much at risk. We are not prepared to do that.

But we are prepared to make a contribution, as part of the Enhanced Cooperation Program, to help with the training of the RPNGC - or the retraining in some cases - of the police and to help the police themselves address the fairly substantial problems they have with corruption. And we’ll be talking during the course of today with Minister Kimisopa and Senator Ellison in particular who will be talking to him about the details of some of the ways we will be helping with the training.

So our anticipation is that if this package is agreed by the Papua New Guinea Government, of course its up to them ultimately, our anticipation is that we would at least be able to send back around 30 or so police. Not the sort of numbers we had originally under the ECP, but under this remodelled ECP we will be sending back around 30 or so people from the Australian Federal Police - some of them may come from the state police forces by the way - and to assist with training, to assist with the anti corruption activities of the police. 

We will also be ensuring that the ECP deployees within some of the other institutions of the government such as the Solicitor General or and the Public Prosecutor’s Office, which are clearly very important to making sure amongst other things, or exclusively amongst other things this issues of corruption is properly addressed. But I talk pretty bluntly about the issue of corruption because, not to pick specifically on Papua New Guinea, this is a problem in many countries but I think it is not just the Australian public who expect me to be tough in dealing with this issue, but I am sure in doing so we are strongly supported by the people of Papua New Guinea themselves.

I think the Papua New Guinean public, if not all of the politicians, have been very supportive of the Enhanced Cooperation Program. That’s been the message that I’ve had - be they people in the business community like yourselves, or just people out in the broader community of the country.

I think the Enhanced Cooperation Program is a great opportunity for Papua New Guinea, for the government of Papua New Guinea, to be able to achieve the reforms it articulates, and that it wants to achieve. I also think they would like to feel that the issue of corruption is being addressed robustly, and I think we can help with that.

I mean the government here has, from the Prime Minister downward, spoken strongly about the need to address corruption.  While they’re taking that up, we’re saying ‘yes, we can help you there’. We can help the Papua New Guinea Government with that issue.

Finally, we of course do have broader aid program here. We are spending over $300-million a year without the Enhanced Cooperation Program.  With this addition, being the remodelled Enhanced Cooperation Program, it will be a good deal more than $300-million a year.

But with the rest of our aid that, of course, is going to continue to focus on the core areas of infrastructure, health, and education. We want to assist the Papua New Guinea government to ensure that all young people in this country get a proper education.  This will set them up for a life in the twenty-first century so that they can go out and make a real contribution, and that they can not only get jobs but actually, I hear the business community often say ‘where will they get jobs’, well, by the way, somebody has to create jobs. 

If people have sufficient education they can get some opportunities to go out and set up businesses themselves, consider entrepreneurial activities and that will create jobs as well as wealth for them.  We’re very much in favour of that, you know in the Liberal Party we are into business and well wealth creation, yes I think I should use that phrase occasionally, we’re into wealth creation, we’re in favour of that. So we want to make sure that our education programs are properly focused and targeted. 

Another part of our aid program that is of course enormously important and the issue that worries us, the single issue that worries us the most in Papua New Guinea, is HIV/AIDS.  It has been said that by 2020 up to twenty five percent, I’m right in saying that up to twenty five percent of the workforce could be affected by HIV/AIDS.

Now let’s hope that does not happen, but it is worth remembering that. So we do need to make sure in our aid program that we do what we can to help the Papua New Guinea government address that issue. It is an enormous issue here. It has the potential to become substantially greater.  For the sake of the country and for the sake of the lives of the people of Papua New Guinea we have to make a robust effort in that area.

The third area is infrastructure. I mean, if you keep the roads open then people can get their stuff to market - it’s as simple as that - or to the ports to be exported. If you can’t keep the roads open, it’s not going to happen. Simple things like making sure there is adequate maintenance of major roads, making sure, by the way, there is security on the roads as well so that trade can take place and trade can take place easily.

It is going to be very important to the Papua New Guinea economy when the resources boom is over because one day, like all economic cycles, one day that resources boom will fall off. We are not quite sure how that’s going to happen, but we are sure that it is going to happen.

So there needs to be a diversified economy, not just a dependence on a few major resource projects, and that diversified economy is going to be able to work a good deal better if there are good lines of communication and strong infrastructure.

The only thing I’d say about all of that is that the Australian Government, or should I say more accurately, the Australian taxpayer should not be asked to fund all of these programs.

These are not the primary responsibilities of the Australian taxpayers, these are primary responsibilities of the Papua New Guinea Government.  We do want to say to the Papua New Guinea Government that there should be some matching of the funding component in areas which we fund.  Otherwise, you know the old saying ‘money is fungible’. They say well we don’t have to put much money into health because the Aussies are doing it - so that gives us the extra money to go and do something else, whatever else that might be. We don’t want to see that happening.

What we’re saying is we are prepared to enhance, to use that word, to strengthen their capacity to run education programs, health programs, building and maintaining, maintaining is a good word here, maintaining infrastructure. 

It’s not our job to run the whole country. We are just offering to provide assistance to those who do run the whole country, being the Papua New Guinea Government and its businesses and its people.

So I think during the course of today we’ll be able to have some preliminary discussions with some Papua New Guinea Ministers about this. I think we’ll be able to find a good measure of agreement. I think what we’re proposing fits in very much with the programs the Government of Papua New Guinea has argued are essential to its mandate. 

If we can help them achieve those things, stronger governance within the public service, within the legal system, making sure that they are able much more effectively to deal with the problem of corruption, making sure that our aid programs in areas like health, education and infrastructure work a good deal better.  Then I think we will help Papua New Guinea very substantially, and for those of you in the Australian business community here, it will be good for you as well.  We’re not just doing it for you, but you being Australian businesspeople, we love to see you doing well.

And so my concluding remark is that I appreciate all that the Australian business community does here.  The Australian business community is very important to Papua New Guinea and we do need to see, for Papua New Guinea’s sake, a strong economic engagement between Australian businesses and this country.   That may have run down a bit over the years, and perhaps that was inevitable, but I think from Papua New Guinea’s point of view keeping that strong business relationship is going to be very important.  What you all do is very much appreciated.  Thank you very much.

ENDS