Australia has indicated that it will provide - in their fiscal year 2020/21 - A$596 million (K1,252 million) in economic assistance as grant funding. In addition, they have agreed to suspend interest and principal repayments for the US$300 million (K742 million) concessional loan provided last November.
Australia is also providing a major COVID-19 economic assistance package, guaranteed PNG would be part of a major vaccine distribution program when one is available, and is providing additional support through a new infrastructure facility.
“Combined, it is likely that 2020 and 2021 will represent the highest levels of support in Kina terms ever. This demonstrates the very high level of international support being received by the Marape-Basil government for the reforms they are implementing,” stated the Treasurer.
“Our increased budget transparency and genuine willingness to work with international organisations to meet international best standards is paying dividends for the people of PNG.”
Details of Australia’s financial assistance to PNG were included in the Australian government’s recent budget by Treasurer Josh Frydenberg. The Australian budget was delayed by five months from the usual May budget to October due to COVID-19.
Budget processes are being delayed around the world due to the uncertainties created by the global pandemic. In terms of the budget process, PNG is still planning to deliver its budget in the usual November rather than delaying it by three to six months as being seen in other countries.
Australia’s Department of Foreign Affairs and Trade said the decision to suspend loan repayments is in line with the G-20 Finance Ministers’ agreement for a coordinated approach for suspension of debt service payments for the world’s poorest nations. The Treasurer helped lead this initiative for debt relief, writing to the Multilateral Development Banks urging them to promote debt relief, and this initiative was pursued by PNG’s Foreign Minister in South Pacific meetings.
Ling-Stuckey said the PNG Government was especially grateful that Australia, in addition to A$596 million grant budget, will procure and deliver COVID-19 vaccines once they are available to PNG and other Australian partner countries in the Pacific and Southeast Asia. The total expected cost of this initiative is A$500 million.
He said: “Early access to vaccines will save lives and underpin PNG efforts to tackle health issues and overcome the economic downturn caused by the Covid-19 pandemic.
“The Australian government has signed advance purchase agreements for vaccine supplies from the University of Oxford and University of Queensland.
“The benefits from supply of safe vaccines will have an inestimable value to the government and people of PNG.”
In addition, the Australian government will provide A$304.7 million over the next two years to help PNG and other Pacific island nations recover from COVID-19 impacts through targeted assistance for health initiatives, food security and improved air services.
PNG is also scheduled to become a direct beneficiary of the Australian Infrastructure Financing Facility for the Pacific (AIFFP), which became operational on July 1 last year. This is a fund for high priority infrastructure projects such as the proposed solar power facility in Morobe Province.
(Treasurer Ian Ling-Stuckey meeting with officials of the Australian High Commission at Treasury, Waigani)