The Hon Anthony Byrne MP, Former Australian Parliamentary Secretary for Trade
Australian Commonwealth Coat of Arms

Speech

18 May 2009

Papua New Guinea Australia Business Forum

Thank you, Ernie Gangloff, for your kind introduction.

My thanks also to the Australia Papua New Guinea Business Council and the Business Council of Papua New Guinea for hosting this Forum, which I understand is being held for the first time in Papua New Guinea.

I’m very grateful for the opportunity to visit this extraordinarily beautiful part of Papua New Guinea, and to speak at this important gathering of business leaders.

I would particularly like to acknowledge the presence here today of the Honourable Sam Abal, Papua New Guinea’s Minister for Foreign Affairs, Trade and Immigration;Sir Arnold Amet the Governor of Madang,; His Excellency Mr Chris Moraitis, Australia’s High Commissioner to Papua New Guinea;Mr Henry Kila,President of the Business Council of Papua New Guinea; Mr Ian Clarke, President of the Australia Papua New Guinea Business Council; and Mr Philip Franklin, President of the Papua New Guinea Branch of the Australia Papua New Guinea Business Council, who has also been outstanding over many years in his role as Australia’s Honorary Consul in Lae.

I appreciate the opportunity to meet with business leaders and to reflect on what has been a dynamic and productive period in the bilateral relationship between Australia and Papua New Guinea.

As governments, we have made excellent progress.  We have had a series of very productive exchanges over the last 18 months and have put in place clear plans to build a relationship based on mutual respect and mutual responsibility.

The Australian Government has made clear its commitment to development and growth in Papua New Guinea and we see trade and investment as a key driver of future prosperity in this country.

Today, the Business Councils have gathered an impressive array of leaders from across the business community, all of whom, I am sure, could teach me something about trade and investment opportunities in Papua New Guinea.

It is gratifying to see such buoyant business sentiment prevailing in Papua New Guinea, despite the global economic situation and the general downturn in commodity prices.

I’ll make some short remarks about the Australian Government’s perspective on those opportunities and look forward to hearing more from you over the course of the morning.

Strong links

Australia’s relationship with Papua New Guinea is one of our deepest and most enduring.

PNG is an important friend and neighbour to Australia, and we are closely linked by both geography and history.

The impressive Coastwatchers Memorial here in Madang is just one reminder of the deep links Australia has to this country, and a fitting memorial to the brave Australian and Papua New Guinean civilians who remained in Japanese-held territory to report on ship movements.

Australia’s deep appreciation for the enormous support and friendship of the Papua New Guinean people during the Second World War was recently expressed by the Prime Minister in his announcement of medallions to honour the service and sacrifice of the Fuzzy Wuzzy Angels.

I know Mr Rudd was very pleased to welcome Grand Chief Sir Michael Somare to Australia last month.

Sir Michael is a long-standing friend of Australia and we were pleased to be able to thank him personally for the extraordinarily kind donation the PNG Government made following the appalling Black Saturday fires in Victoria and floods in Queensland of earlier this year.

Thousands of Papua New Guineans made generous individual donations to the recovery efforts, showing again the deep and abiding friendship between our peoples.

The links between our people extend to connections formed over many decades through family ties, migration, education, tourism and on the sporting field.

These friendships have enriched our past and strengthen the fabric of our relationship today.  Looking forward, however, we are keenly aware that business relationships between Australia and Papua New Guinea will be a key to us sharing a prosperous future.

The energy, creativity and vision of a thriving business community can provide the opportunities and investment that will underpin sustainable economic growth.

That’s important for Papua New Guinea’s development and therefore important to the Australian Government.

Development through trade

There are over 4,000 Australian businesses that trade with PNG and many will know full well the enormous potential of this country.

Already our bilateral merchandise trade is worth over $4 billion, with the balance of trade firmly in PNG’s favour.

At last year’s Ministerial Forum here in Madang, we committed Australia and PNG to a stronger bilateral business relationship, and agreed to hold regular meetings between business representatives and senior PNG and Australian government officials.

The first of these meetings took place in Port Moresby last September and we look forward to the Business Council’s attendance at the upcoming Senior Officials meeting and Ministerial Forum.

The business community’s involvement will also be important as we work to free up the flow of goods, services and investments within the region

At last year’s Pacific Islands Forum Leaders’ meeting, the region’s Leaders highlighted the importance of greater regional economic and trade integration and agreed to develop a roadmap to negotiate a new trade agreement – known as PACER Plus and asked for officials to report to them this year with a roadmap on the way forward.

A key challenge for future PACER Plus negotiations is to carefully design the agreement to take account of individual circumstances in each country so that trade and economic opportunities can be maximised.

This includes developing the skills, and the regulatory and investment policies to support sustainable economic growth.

Under Australia’s Trade Research Initiative, for example, each Forum Island country can access $65,000 to fund independent national studies to support their preparations for PACER Plus negotiations.  This funding allows each country to do a stock-take of the areas of priority for them.

We have also begun a Trade Fellowships program which is providing training to Forum island country officials, including from PNG, to increase trade negotiating capacity.

We are alive to the importance that the Pacific Island nations place on trade-related capacity building – and the measures to fund training and research demonstrates our strong commitment to delivering practical assistance to bolster negotiating capacity.

A Partnership for Development

Our development assistance is guided by our determination to assist Papua New Guinea’s progress towards the Millennium Development Goals (MDGs).

Appropriately, it was in Port Moresby, last year, that the Prime Minister announced the Pacific Partnerships for Development.

The Partnerships embody our shared sense of commitment to achieving greater progress towards the MDGsand our partners' other development ambitions.

They are based on the simple premise that we shouldwork collaborativelywith our Pacific neighbours, including PNG, to promote our shared economic and social aspirations.

In PNG, we have worked carefully with the PNG Government to tailor a partnership that will be enable better progress towards achieving the MDGs.

Prime Ministers Rudd and Somare signed the PNG Australia Partnership for Development in August last year.

It commits both our governments to shared goals across five initial priority areas ofTransport Infrastructure; Basic Education; Health; Public Service; and Statistics.

We will continue to work closely with you as we seek to implement the vision articulated in the Partnership.

Helping create a business-friendly environment

The Australian Government recognises that business is a core driver of sustainable economic growth and we therefore need to develop the skills, infrastructure, trade and investment policies and regulatory environment that support business confidence.

That’s good news for PNG businesses and good news for Australian companies doing business here.

Here in Madang, it’s easy to be startled by Papua New Guinea’s extraordinary natural beauty.  From the offshore volcanic islands to thereef-fringed lowlands and rugged mountain ranges it’s a fantastic advertisement for much that this country has to offer.

But the spectacular geography also presents significant challenges for the development of infrastructure and the delivery of services.

Transport infrastructure, in particular, is a key challenge which affects businesses looking to move goods and equipment through Papua New Guinea.

Tomorrow morning you have a session on the agriculture sector and the prospects for income generation through agribusiness in Papua New Guinea.

Expensive and logistically challenging transport delivery networks can stymie this sort of sort of development, nipping a potentially profitable business in the bud.

The resources and broader exports sector can likewise suffer through poor infrastructure and expensive transport, depriving many businesses of trade and employment opportunities.

That is why a significant proportion of Australia’s development assistance is invested in the PNG transport infrastructure sector.  This will improve trade within PNG, and enhance opportunities for PNG businesses to trade beyond national borders.

Critical infrastructure including roads, telecommunications, air and sea ports are vital to the reliable provision of access to markets and social services.

We are, for example, helping to maintain 340 kilometres of the important Highlands Highway, improving its reliability and safety while reducing the operating costs of transport.

The highway services almost 2 million people and is a crucial route for the movement of goods in Papua New Guinea, and therefore for the local economy.

Of course, not all barriers to trade and investment are physical.

Creating the right regulatory environment for sustained economic growth and private sector activity is equally important. Accountable and transparent decision-making is essential for business confidence and sustained economic growth.

This requires effective and stable government institutions and accountable leadership at all levels.  In short, it requires good governance.

Our Partnership with the PNG Government firmly recognises that good governance is critical to stability and development.

Increased capacity in the public sector will assist PNG to implement its long-term development plans.

Australia is supporting PNG’s economic and public sector reform through technical and advisory services as well as through training for central agencies.

Through the Strongim Gavman Program,experienced Australian Government officials work in PNG with their counterparts to improve outcomes in economic and financial management, law and justice, border management, and transport safety and security.

And ‘twinning’ arrangements between PNG and Australian departments are improving technical and professional skills within the PNG public service.

PNG LNG Project

Improved infrastructure and governance will both be essential to achieving good development outcomes from the potentially transformational PNG LNG Project.

If managed effectively, the Project could help to underwrite PNG’s development for the next two to three decades.

Effective investment of revenues in the short and longer term, and careful management of foreign exchange inflows, will also be essential.

The Australian Government stands ready to work beside the private sector in PNG to maximise the development benefits of this, and other, new projects.

HIV/AIDS

Another, unfortunately tragic, threat to business and broader development in Papua New Guinea is the spread of HIV/AIDS.

Unless more is done to halt this, the country’s workforce may decline by 12.5% by 2025, significantly reducing the size of PNG’s economy.

The Australian Government is the lead donor supporting Papua New Guinea's national HIV response, providing $178 million over five years.

This funding focuses on preventing the spread of HIV and improving treatment, care and support for those infected and affected by HIV and AIDS in communities across all provinces of PNG.

I know many of you have joined the PNG Business Coalition Against HIV and AIDS and I take this opportunity to thank you for supporting this important cause.

Conclusion

The Australian Government’s strong engagement with Papua New Guinea is based on a shared aspiration to see the country deliver on its enormous potential.

Australia shares its history and its future with PNG.  In many respects, this country’s challenges are our challenges, and we have a stake in helping PNG meet its responsibilities and achieve its aspirations.

The Australian and Papua New Guinean business communities have a key role to play in this.  In many respects you are at the front line of the bilateral engagement, providing opportunities for fruitful exchanges and enhanced development.

As we work with Papua New Guinea towards sustainable growth and development we are also committed to working with you.

I thank you again for the opportunity to speak this morning and wish you all the best for a productive couple of days here in Madang.

Thank you.