Australian Commonwealth Coat of Arms

Opening remarks to the Australia-Papua New Guinea Ministerial Meeting Alotau

Topic: Development cooperation

Transcript, proof E&OE

7 July 2010

SAM ABAL: Honourable Stephen Smith MP, Minister for Foreign Affairs, Senator the Hon Nick Sherry, Assistant Treasurer, The Hon Bob McMullan MP, Parliamentary Secretary for International Development Assistance, Colleague Ministers, Our respective High Commissioners, Members of the Milne Bay Provincial Assembly, Senior Officials and Private Sector Representatives from both sides, invited guests, ladies and gentlemen.

It gives me great pleasure to extend to you Mr Minister, and your delegation, a very warm welcome to Papua New Guinea. I hope you have had a good flight into this beautiful province of many islands with diverse, interesting and exciting cultures.

At the outset, allow me Minister to reaffirm the congratulations which I had earlier communicated to you on your assumption of the Trade portfolio in addition to Foreign Affairs which you have retained under the Gillard Government.

In the uncertainties that are associated with any change we are comforted by the knowledge that PNG-Australia relations are in the hands of someone who has had close working relationships with us and understanding of Papua New Guinea in the last two and a half years and with whom we have begun to consolidate the relationship. This is especially so after quite a tumultuous period before the change of Government in Australia in 2007.

Mr Minister, let me assure you of how much my colleagues and I appreciate the time you and your colleagues have made available to travel to PNG for us to have these consultations in the face of recent changes. The effort on your part is a clear demonstration of Australia's commitment to our bilateral relations.

While we note that it has not been possible for a full Ministerial Forum, we understand that domestic circumstances in Australia have rendered it difficult for the forum to proceed in the usual manner.

Since our last Forum in Brisbane, we have of course met once or twice in the last 12 months. Those occasions have provided us the opportunity to keep engaged and in-touch with the progress of some of the key international, regional and respective domestic developments that impact on the PNG/Australia bilateral relations.

Over the last twelve months, PNG and Australia have enjoyed a healthy and constructive degree of cooperation. I'd like to turn briefly to development in the Pacific Region.

Australia's chairing of the Pacific Islands Forum resulted in significant milestones. The Cairns Compact for coordination improvement of Overseas Development Assistance (ODA) flows and the Partnerships for Development, including the Port Moresby Declaration, were amongst the notables.

Finally, turning to the PNG domestic front, due to certain measures taken in 2009 by the Somare Government to stimulate economic growth including fiscal management, PNG's real economic growth is reported to have increased 6.7% in 2008, then by 4.5% in 2009, and we expect 8.5% in 2010.

The World Bank in its East Asia and Pacific Update of November 2009 acknowledged the key role of this Government in its fiscal policy stance to withstand the effect of the global recession.

I have attempted to put into context just one or two external developments that have a direct impact on our bilateral relations. Let me make a general comment on the progress regarding decisions we jointly took in Brisbane last year.

I am confident to say that overall, we have made good progress. The most significant of this is of course the PNG-Australia Development Cooperation Treaty.

The agenda of our current meeting is structured in such a way that I hope during this meeting we will reach a clear understanding of the way forward from the Review. I believe the findings of the Review require us to take joint and bold initiatives.

The way forward will undoubtedly take into account domestic developments and the policy environment in both Papua New Guinea and Australia.

We note that the DCT Review conclusion has been closely followed by the Australian Government's announcement of a generous increase of aid to PNG from last year by 40 million dollars to the tune of $AUD 457.2 million (K1.1 billion).

People of PNG are always grateful. This signifies a major proportion of Australia's ODA globally of which PNG is very much appreciative. It is further noted that the flagship sectors of Australian ODA are health and education.

On the PNG side, apart from the fiscal policy measures that the Government took to withstand the global recession, there are significant development plans that PNG has adopted as tools to guide all undertakings that government may embark on for future socio-economic growth of the country.

Moreover, you are of course aware of the state of play of the most significant economic development taking place in Papua New Guinea from the recent discussions you had with my Ministerial colleagues led by the Hon Arthur Somare in Melbourne last week.

Australia's involvement in this development is significant. The future wellbeing of this country depends on prudent management of the wealth generated by the PNG LNG project. I apologise that I was not able to join you then, but I was briefed on how it was a constructive and mutually satisfactory meeting. We will have the opportunity, I hope, to consolidate the understandings reached at the Melbourne meeting on this occasion.

In the spirit of our mutual desire to collaborate closely in an open and transparent manner for a way forward that requires us to take bold initiatives, I hope that we will use the opportunity of this meeting to discuss issues of redirection of Australian aid, and alignment of Australian aid with PNG's cooperative arrangement which reflects the maturity of our relationship as equal friendly countries.

Mr Minister, being cognisant of the new era of relationship being forseen by the Review of the DCT, the PNG Government believes in redirection of Australian aid from program aid assistance to a form of budgetary support.

Further, the Government of PNG is appreciative of the fact that as a result of understandings reached in Melbourne, Australia is ready to provide assistance to the LNG project. It is our position that such assistance should be over and above the assistance currently given under the DCT program. Obviously as a responsible partnership, there needs to be a time element that we need to mutually agree on. We feel the landscape has changed.

Finally, our view on the bold initiatives regarding the way forward in dealing with the DCT Review findings entail the replacement of the DCT with an umbrella economic cooperation agreement.

The components of such a Treaty would include the following:

  1. Trade
  2. Development Cooperation
  3. Business and Investment
  4. LNG Project which requires us to work closely with you.

The other issues on the agenda of our meeting are also equally important. As such, a good number of my Ministerial colleagues are with us today and, with your permission, I will be asking them to contribute to our discussions as and when appropriate.

On that note, Honourable Minister, I welcome you and your delegation once again. Thank you ladies and gentlemen for your attention.

STEPHEN SMITH: Sam, thank you for that very warm welcome. On behalf of the Australian delegation which includes Bob McMullan, Parliamentary Secretary for International Development Assistance who is well known to you, and Assistant Treasurer, Senator Nick Sherry, can I thank you for that warm welcome and the hospitality that you showed us at the airport and on arrival at the hotel.

This is my second visit to Papua New Guinea as Foreign Minister, and my first as Minister for Foreign Affairs and Trade, so thank you for your personal congratulations on that, by letter and today.

This is my first visit since our very successful Ministerial Forum in Madang in 2008, and that was followed by, again, a very successful forum in Australia last year. Whilst this is not a formal Ministerial Forum, given the portfolio interests represented around the table, we are very confident that we would be able to deal with all of the key issues and interests and concerns in our comprehensive relationship.

It is significant that we meet in Milne Bay Province. Milne Bay of course has historical and military significance for Australia, so we are very pleased to be here.

We share your assessment that our relationship has been one of great and firm friendship, both before Papua New Guinea's independence and subsequently, and we continue to work very closely with you on all aspects of the relationship.

We also agree with you that we are potentially at a turning point, where we do need to take the opportunity to fundamentally reconsider things that we have done in the past, and come to joint decisions about how we should proceed into the future.

Some of this is as a consequence of the Liquefied Natural Gas project, and some of it is as a result of the Review we jointly commissioned into the Development Cooperation Treaty.

But this meeting follows on from the very successful meeting in Melbourne which your colleagues attended. It is quite clear that the Liquefied Natural Gas Project has the potential to transform Papua New Guinea's economic and social circumstances, and we continue to want to work very closely with you to provide what technical and other assistance we can for you in that respect. Following on from that very good meeting in Melbourne, we have listed it on the agenda for the continuing discussions for today and tomorrow.

The Development Cooperation Treaty Review is something we need to jointly consider. It does draw our attention to areas where we have achieved some very good objectives, particularly in the areas of education and health, and I must say we have been very pleased to see the significant increase in primary school enrolments and attendance over the recent period.

But it also does draw our attention to our trying to do too much, or spreading the butter too thin, and we do need to focus on those areas where we can have most impact going forward. We also do need to ensure that those areas are consistent with Papua New Guinea's own decisions about the priorities that it wants to pursue for the future, so we do have some important issues that we need to contemplate and consider there.

We also agree with your assessment and your suggestion that it would be timely to contemplate an umbrella economic cooperation agreement and to put our Development Cooperation Assistance as one of the aspects of that treaty.

The most successful development assistance partnerships are those where, in the end, the development assistance is overtaken by economic growth as the development assistance helps build economic and social capacity. So we do believe that the coincidence of the prospect of a successful Liquefied Natural Gas project, and the Review of our treaty arrangements so far as development assistance is concerned, that it's timely to contemplate a different umbrella, to contemplate these matters in the broader context of economic trade and investment.

Can I also indicate, that I bring to you and your colleagues, the best wishes of Prime Minister Gillard. She was very pleased to receive, as one of the first messages of congratulations, a very warm message from Prime Minister Somare. She appreciated that very much, and she asked me to relay to you and your Ministers her warmest regards and also her enthusiasm to continue the very strong relationship that we have between our two countries, and that we continue the principles and the values and the sentiments expressed in the Port Moresby Declaration, expressed in our Pacific Partnership for Development Agreements.

So, Sam, we look forward to some hard work over the next couple of days, but also to productive work, and also enjoyable work, because we do very much enjoy getting productive outcomes when we meet in these forums, as we did in Melbourne recently. Thank you and your officials for their hard work in preparing for the meeting, and also for the warmth of their greetings and their hospitality in this historical setting so far as Australia is concerned. Thank you.

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