PNG asks Australia to fund Health and Education

SYDNEY (AUSTRALIA) - Australia's increasingly tricky relationship with Papua New Guinea could be about to get more difficult.

PNG's Government has asked Australia to directly fund its health and education spending after it suffered a severe economic downturn and was forced to make major budget cuts.

PNG used the 25th ministerial forum between the two countries to ask Australia to shift its $500 million of annual aid away from narrowly-focused programs and into helping fund its health, education and infrastructure priorities.

Planning Minister Charles Abel said the shift was something that had been discussed for some time.

"The Papua New Guinea Government has sent a signal at this meeting of our desire to move by 2020 into a budget support arrangement where the program is channelled more directly through the PNG budget process," he said.

Australia is the dominant contributor of aid to PNG, providing 68 per cent off its development assistance.

Mr Abel said that money could be having a bigger impact.

"We would like to see a larger proportion of the budget actually going into hard, tangible, on-the-ground outcomes," he said.

PNG's Major Events Minister Justin Tkatchenko said the request arose out of concerns about the effectiveness of Australia's aid program and the amount of money that is spent on contractors and technical assistance.

"Budgetary support will assist in programs and activities that the Government is trying to achieve and that alone will achieve a lot more positive outcomes than what's going on at the moment," he said.

The request came as a surprise to the Australian ministerial delegation.

It also came after PNG suffered a major drop in revenue that forced its Government to slash spending, particularly to health services, but Mr Abel rejected suggestions it was linked to PNG's cash shortage.

"It's a policy-based directive that has come from a series of documents … it's not a knee-jerk reaction," he said. (abc)
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