30th Australia Papua New Guinea Business Forum and Trade Expo

  • Speech, E&OE

Prime Minister Peter O'Neill, thank you for that inspiring speech today, and to your Ministers who are here;

Bougainville President John Momis;

and to our respective High Commissioners to PNG and Australia, Deborah Stokes and Charles Lepani;

Ewen Jones, Member for Herbert and committed champion of the PNG- Australia relationship,

Michael Trout MP, representing Premier Campbell Newman,

Bob Manning, Mayor of Cairns,

Australia-PNG Business Council Presidents,

Council members, delegates and friends.

What a pleasure it is to be here, first in Cairns - and thank you Mayor for your warm welcome and the great weather - and secondly, what a pleasure it is to address this forum again, in its 30th year.

Next year will mark the 40th anniversary of PNG's independence from Australia as a separate sovereign state - the only nation with which Australia has such a connection.

I note Prime Minister O'Neill's reference to next year also being the Centenary of ANZAC and I think these two events in 2015 will enable us to reflect even more deeply on our relationship.

I am often struck by the many and varied links between our people. Even in my own family, I grew up hearing wondrous stories about PNG. My uncle Ross fought in PNG in the war - and there's an intergenerational family connection with Goroka.

My great uncle Dr Harry Penny was principal of Adelaide Teachers' College,mand in 1967 he established the teacher's college in Goroka. About a decade later, my sister Patricia did her medical internship in Goroka and 40 years later her daughter, my niece, my god-daughter Isy - a teacher - is currently doing 12 months volunteer work in Goroka.

And of course there's my now famous pen pal from Popondetta!

Since assuming responsibility for foreign affairs, in opposition and now in government, I have visited PNG more than any other country. And that is as it should be – for our relationship with Papua New Guinea is a foreign policy priority for the Abbott Government.

Geographically we are neighbours. Historically our connections are deep. Our wartime experiences are shared. Our passion for rugby league is an ongoing bond. We have always been there for each other.

Today our two countries seek to build on our relationship so that we can become true economic partners – to move on from the traditional aid donor-aid recipient relationship to a more mature, contemporary 21st century partnership - but still a relationship where we look out for each other and trust each other, rejoice in each other's success and share in each other's pain, where we encourage each other to do better and take nothing about our relationship for granted.

But in order to achieve this, we must also be honest with each other and talk openly and frankly about the challenges and opportunities we face together.

I welcome the many discussions I have had with Prime Minister O'Neill, Foreign Minister Pato and other Cabinet ministers, politicians, public servants and business leaders – as well as with PNG High Commissioner Charles Lepani - on the issues we must address. I'm pleased to see that this forum includes sessions on many of those issues.

Australia cares very deeply about PNG's future – and I am optimistic that with the right policies, priorities and governance, and with carefully targeted support from Australia and others, PNG can have a strong and sustainable economy in a secure and prosperous nation.

Papua New Guinea is in its 14th consecutive year of economic growth.

Abundant in natural resources, PNG can be an economic engine for our region – as a reliable supplier of energy and minerals to the vast economies to our north. With massive investment in energy projects in particular, PNG is on the cusp of transforming its economy – with the potential to double its GDP.

But like Australia, while resource based growth is set to continue for some time, our economies do need to be more diverse - more complex, more advanced - growth economies.

This is where the Australia-PNG Business Council has such an important role to play – for the private sector,working with government, will help both Australia and PNG grow our economies: sustainable, accountable growth that benefits our whole populations.

There are a number of elements to building prosperity that I wish to address today:

First – driving strong, sustainable economic growth.
Second – harnessing the private sector by ensuring government provides the right conditions for business and investment.
Third – building a skilled, economically independent workforce.
Fourth – investing in productivity enhancing infrastructure.
Fifth – implementing structural reform backed by strong policies, political leadership, accountable institutions and governance.

As to driving economic growth, I believe that trade and investment are the keys to building stronger nations.

Australia is entering its 23rd consecutive year of economic growth, but we are determined to make the necessary reforms and take the hard but necessary steps to ensure it can continue. This is the background against which our recent Budget was delivered.

That's why we're concluding Free Trade Agreements with important partners like Japan and Korea and continuing negotiations with China and the 12-nation Trans Pacific Partnership, and the ASEAN-based Regional Comprehensive Economic Partnership (RCEP).

We see trade liberalisation and facilitation as essential to creating new markets, or enhancing existing markets for our goods and services exporters, and for new sources of capital for our businesses.

PNG has immense potential as an energy and mining exporter. But the conditions must be right for ongoing investment – as Australia well knows – business thrives when there is less useless red tape, less unnecessary regulation, there's a competitive tax environment and there's policy fairness and certainty.

As well as increasing our bilateral trade - as evidenced by the recent signing of an Economic and Cooperation Treaty by Prime Minister Abbott and Prime Minister O'Neill - Australia and PNG are working together to progress the PACER Plus trade negotiations with our Pacific friends.

Australia is also looking to expand our Seasonal Workers Program and the Working Holiday Maker program and I encourage Papua New Guinea to expand its participation in both.

In my recent visits to PNG, I have stressed the opportunities for greater trade and investment – not only in energy and resource projects, but in agriculture, services, education, tourism and infrastructure.

That brings me to the second point – opportunities for the private sector.

Globally, the private sector is the engine of growth. In developing countries, the private sector makes a huge contribution to growth and poverty alleviation.

The numbers are significant – the private sector generates 90 per cent of jobs. It funds over 60 per cent of investment. It underpins over 80 per cent of government revenue in low and middle income countries through company taxes, resource rents and income tax from employees.

It also provides an ever-increasing share of essential services, and is the dominant producer of exports. It invents, designs and produces most goods and services.

In my recent assessment of our PNG aid program for example, we have identified the importance of cooperating more closely with business in both our countries.

PNG's private sector potential has yet to be fully unlocked. In February I announced the establishment of the Australia-PNG Network – a partnership between the Lowy Institute in Sydney and the National Research Institute in Port Moresby - to deepen the people-to-people and business-to-business links. It will be formally launched in Port Moresby at the end of May. I encourage you to sign up to the Network - we've put in $1 million to kick start this business-focussed initiative which will complement the work of our Business Councils.

Prime Minister, we do hear your concerns about visas. We are engaged in finding a technical solution to the necessary background checks that need to be made,as we have done with New Zealand. It is a technical solution, it's not a political one.

We do want to add the fact that we have online applications for PNG and no other countries but we are determined to ensure that there can be greater mobility between particularly our business and government populations.

Targeting development assistance in PNG to promote private sector-led growth is essential.

In the coming weeks I will detail our new approach to development assistance – to reflect what I call the new paradigm in aid funding based on economic development as the key driver of poverty reduction––of leveraging the private sector, of aid for trade initiatives, with an emphasis on innovation as a means of lifting living standards, and the introduction of performance benchmarks against which outcomes will be judged, and mutual accountability.

We will also focus on Bougainville––to assist in its development, stability and prosperity, particularly over the next five years.

We do need a new and innovative approach.

I am troubled by the fact that despite a significant investment in aid into PNG over many decades, in some vital areas there has been no discernible progress.

I am troubled by the fact that PNG has fallen from 77th place on the UN Human Development Index in 1975 to 156th today and I'm troubled that PNG is not expected to meet one of the Millennium Development Goals by 2015. These goals judge progress on social indicators in areas like maternal health and infant mortality. So a new approach is needed and that's what I'm determined to deliver - after consultation and cooperation with PNG.

Third, investing in our people through education, skills and training is also critical if we want our people to be active participants in growth. Health is important too, a matter of human capital, a matter of national interest. These are both government and private sector responsibilities.

Ten days ago when I was in PNG I announced funding with the NRL for girls' and boys' sports programs in schools – League Bilong Laif –with the NGO Buk Bilong Pikinini to open its 15th library to support literacy, and with the private educational institution Pacific Adventist University to train up to 500 midwives for PNG – each one of them an example of innovative private-public partnerships, addressing urgent social issues of school attendance, literacy and maternal health.

Actually I'm reminded, speaking of Rugby League, that recently I met the executives of Australia's NRL and we were talking about their plans to roll out more programs across PNG and the Pacific because sports diplomacy is such a bridge builder. And they said, "Foreign Minister, it's quite evident that you don't support Rugby League. You are a West Coast Eagles fan, you obviously support the AFL. But if you're really going to put your heart and soul into these programs you're going to need an NRL team".

So we went through the teams - the Rabbitohs, Manly, Broncos, the Cowboys and I said, "I think I'm going to wait until the PNG Hunters are in the NRL. That's my kind of team". (applause) Do not tell my Cabinet colleagues!

In higher education, I have invited PNG to take part in Australia's New Colombo Plan, so that Australian students can study at universities in PNG from 2015, which will lead to a focus on course accreditation and mutual recognition with Australian universities, on standards in PNG universities, with opportunities for more student exchanges.

I am strongly committed to increasing women's participation and leadership in our region. While I think the private sector understands the importance of this, economically and socially, governments in PNG and Australia can do more.

I fear that without a higher participation of women in the formal economy and labour markets, PNG will not reach its proper potential.

Women need to be empowered – to have access to agricultural resources and to finance - to be leaders in business, in politics, in education, in communities, in law and order. Every time I visit PNG I meet energetic, talented, creative women and girls – women in leadership positions, guiding their communities, advocating, acting as role models, getting things done - but we need more of them. Girls who want to learn but who need opportunities, and mentoring and more role models.

I aim to work even more closely with PNG to help combat violence against women and girls so that they can make their contribution to the economy and society in a safe and secure environment – free from fear and free from violence and intimidation. Australia also faces this challenge within our communities and I hope that together we can share experiences and solutions so that violence against women is stamped out.

I am pleased to confirm that productivity-enhancing infrastructure is an agreed priority for the aid program in the years ahead. We will work towards allocating up to 50 per cent of the aid budget to infrastructure projects. There is also the infrastructure funding flowing from the previous Labor Government's deal with the PNG Government on Manus which we also support.

The private sector can't do its work in driving growth in the absence of a stable, predictable set of governance structures. Government does have a responsibility to provide stability and predictability in the policy environment, as well as an attractive regulatory environment.

Australia's Strongim Gavman Program in PNG plays a critical role in assisting PNG's key economic agencies – Treasury and Finance – to deliver budget certainty. I believe we should expand this program to include capacity building opportunities across the PNG public sector.

We are already working on programs to share our policing experience through the AFP – this model can be improved and can be used across more sectors. I want to explore 'twinning' or exchange opportunities with our public servants – at both national and local levels.

Credible procurement is also essential to investor confidence.

PNG's plan to establish an Independent Commission against Corruption is a vital step, and will help reassure business and investors wary of stories of corruption and mismanagement.

Building good government is critical for private sector success. Political and economic institutions which encourage behaviour that is undeniably in the interests of the many - rather than the few - are central to driving broad-based economic growth.

There are clearly some serious challenges facing our region – security, poverty alleviation, managing our sovereign wealth for the long-term prosperity of all our people are amongst them. And in the area of people smuggling, another challenge for our region, again I want to thank the PNG Government for its cooperation and assistance in helping Australia dismantle and defeat the people smuggling trade.

These are responsibilities our two countries must share and pursue together through our partnership. But there are also some staggering and exciting economic opportunities that can transform PNG as a nation and transform lives.

The next few years offer enormous potential for PNG – hosting the Pacific Games in 2015; hosting the APEC leaders forum in 2018. There's also the completion of the terms of the Bougainville Peace Agreement in the period up to 2020.

Australia wants to do all we can to help PNG showcase to the world its natural beauty, its gorgeous people, its limitless potential, and its dynamic economy.

So as we approach the 40th year since independence in 2015, the Australian Government commits to:

encouraging stronger economic ties through increased trade and investment, and I look forward to our White Paper on Northern Australia with recommendations on how PNG can also benefit from our closer economic ties and our development in the north.

a more targeted development assistance programme that enables the PNG Government to be responsible for basic service delivery to its citizens, while Australia helps leverage economic development.

a more skilled public and private sector workforce.

healthier and stronger communities – free from the devastating effects of preventable communicable and non-communicable disease – where people are able to fulfil their potential.

all the while encouraging PNG to rightly assume a leadership role in the region and beyond.

I have a deep regard for PNG, and a deep respect for its people. I am committed to its successful future. I cherish the friendships I have made within government and business circles and I am committed – through our focus on 'economic diplomacy' and a more effective and efficient use of development assistance funding to see improvements in the quality of life for all the people of PNG.

I am confident that we can continue to work cooperatively – as the closest of nations, as the dearest of friends.


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