PNG PM calls for Australian aid rethink

PNG PM calls for Australian aid rethink

PNG PM calls for Australian aid rethink

Updated 28 November 2012, 19:06 AEST

Papua New Guinea Prime Minister Peter O'Neill has called for a "total realignment" of the half a billion dollars in aid Australia gives his country each year.

In a speech to the National Press Club in Canberra, Mr O'Neill said development assistance was being spread too thin and that the funding would be better directed towards roads, schools and hospitals.

"[It] would require a total realignment of the aid program from small projects, in a diverse range of areas, to major infrastructure projects."

PNG is the second largest recipient of Australian aid after Indonesia, with the majority of it spent on good governance and health programs.

"Even the Australian taxpayers question... what have we achieved? All our social indicators are still very low, that is why we are trying to encourage the Australian Government to participate with us in some of the key programs that our government is now introducing."

Mr O'Neill said he realised his proposals could prove unpopular.

"I know there will be some in the aid lobby who will be horrified by this suggestion. But if we are going to make sure that your aid supports our economic and social development, and helps us guarantee our security and stability, we simply must make sure it is more aligned with our priorities and needs."

Aid is not the only area where Peter O'Neill wants to see change.

He said while Australia's mining sector was slowing, investors should consider opportunities in PNG.

"Papua New Guinea's mining and gas sector is not slowing down, it is in fact growing."

But his invitation comes with conditions.

"By investing, we mean a long term investment. We do not want fly-in, fly-out arrangements that has happened in the past."

Australia's Foreign Minister, Bob Carr, said he would discuss Mr O'Neill's requests "in detail" when he meets with his PNG counterparts next week.

"We want our aid to the country to reflect the needs and the priorities of the government in Port Moresby absolutely," Senator Carr said.