Overview of Australia's aid program to Papua New Guinea

How we are helping

2014/15 Bilateral Outcome
$450.6 million

2015/16 Bilateral Budget Estimate
$477.3 million

2015/16 Total Australian ODA Estimate
$554.5 million

Australia values its longstanding ties with Papua New Guinea (PNG) – we have a shared history and a shared geography. As our nearest neighbour and close regional partner, a stable and prosperous PNG is in Australia’s interest. We share a border, economic interests and common legal frameworks with PNG. In 2015, PNG celebrates the 40th anniversary of its independence. Over time, our relationship has matured into one of economic and strategic partnership, and in March 2014 we signed a new Economic Cooperation Treaty.

The Australian Government will provide an estimated $554.5 million in total ODA to PNG in 2015–16. This will include an estimated $477.3 million in bilateral funding to PNG managed by DFAT.

PNG has experienced robust economic growth for over a decade, driven by mining and agricultural exports. PNG’s strong overall growth however has not resulted in equitable development and PNG faces growing fiscal challenges. Poor law and order, lack of infrastructure, complex governance arrangements, weak public service, inequality between men and women, and rapidly growing population are challenges to its future prosperity. PNG also remains vulnerable to climate-induced and other disasters, including earthquakes, volcanoes and tsunamis.

Over 40 per cent of the population remain poor and face hardship and 80 to 85 per cent of Papua New Guinean’s reside in traditional rural communities. The development challenges for children and youth in PNG are stark: an estimated 40 per cent of children are stunted, one in five children are not enrolled in school and nearly half the population is under the age of 20. Family and sexual violence is endemic, with some of the highest rates of violence against women and children in the world. It is also estimated around 15 per cent of the population have some form of disability.

Despite these development challenges, PNG is seeking to achieve upper middle-income country status by 2050 (PNG Vision 2050 [PDF 2.78mb]). Sector priorities, as set out in the PNG Government’s 2012 Alotau Accord, include education, health, law and justice, infrastructure and sustainable economic growth. PNG’s economic growth agenda focuses upon investments in high impact infrastructure, job skills development and partnering with the private sector. PNG also has a strong focus on improving service delivery at the local level through the introduction of District Development Authorities (DDAs).

Australia has consistently been PNG’s largest aid donor, but our relationship is evolving, reflecting a more mature, focused and innovative response to PNG’s development needs. Australian aid is aligned with PNG and Australian Government priorities to ensure our aid program delivers assistance that supports sustainable economic growth and equitable development in PNG.

Our program is organised around the following three mutually reinforcing objectives as outlined in the Aid Investment Plan 2015–16 to 2017–18. We are integrating gender equality, youth and disability-inclusive measures in all investments.

Objective 1: Promoting effective governance

An effective public sector and rule of law are fundamental for PNG’s ongoing stability, economic growth and poverty reduction. Our assistance is supporting enhanced governance by strengthening public sector leadership, performance and accountability, community engagement and electoral reform. Australia has partnered with the PNG Government to establish a new Pacific Leadership and Governance Precinct and is supporting PNG-led reforms aimed at strengthening sub-national service delivery. In consultation with the PNG Government, we will reshape our policing assistance and continue our support for investments aimed at preventing and combatting corruption and strengthening access to justice.

Investments for promoting effective governance in Papua New Guinea

Objective 2: Enabling economic growth

Australia’s aid can be a strong catalyst for more inclusive economic growth in PNG. We engage with businesses and support initiatives that promote private sector growth, led by both men and women. This includes increased support for infrastructure, skilling the workforce and a range of other investments which reduce the costs of doing business, reduce risk and improve productivity. In recognition of the role infrastructure plays in supporting economic growth, Australia’s aid investment in infrastructure is expected to increase from 37 per cent of the program to approximately 50 per cent by 2017.

Investments for enabling economic growth in Papua New Guinea

Objective 3: Enhancing human development

PNG continues to face enormous challenges in providing access to quality health services and education opportunities for all Papua New Guineans. Australia is assisting PNG to achieve a more effective health system, targeting improvements in maternal and child health and communicable disease control. To maximise the influence of our investments we focus on key areas of the health system, including workforce, infrastructure and financing.

Australia's support for the education sector in PNG has a firm focus on improving access to quality education. Our efforts are supporting more students, particularly girls and children with a disability, to enrol in and complete school, to further their education through university or technical college, and to enter the workforce with the skills that they need. We are also expanding support to improve women’s leadership, economic opportunities and safety in PNG.

People-to-people and institutional links between PNG and Australia are supported through the Australian Awards scholarships and Australian Volunteers for International Development. The Australia-Papua New Guinea Network, the Emerging Leaders Dialogue and the New Colombo Plan also foster and strengthen people-to-people links.

Investments for enhancing human development in Papua New Guinea

Our results

Our results for 2014–15 will be available once consolidated. In 2013–14, Australia's aid program contributed to a range of outcomes, including:

Objective 1: Promoting effective governance

  • Strengthening PNG government’s budget planning, revenue collection and service delivery.
  • Delivering voter awareness training in the lead-up to the 2013 local-level government elections and supporting an increased number of female candidates in local elections.
  • Training and infrastructure development for the Royal PNG Constabulary, including in Bougainville.
  • More female village court magistrates, bringing the number to 900 achieved at the end of 2013.

Objective 2: Enabling economic growth

  • The integration of PNG’s development and recurrent budgets and PNG’s implementation of a Sovereign Wealth Fund with assistance from Australian Treasury and Finance Officials.
  • PNG membership of the Extractive Industries Transparency Initiative (EITI) which is promoting better practice within the extractive industry.
  • The maintenance of over 2,000km of PNG’s most economically important roads, totaling 9,000km since 2010.
  • Modernising and upgrading PNG’s aviation traffic management systems and communications.

Objective 3: Enhancing human development

  • Enabled 24,848 babies to be delivered under the supervision of skilled staff.
  • The immunisation of 54,393 children against measles and other diseases.
  • Increased access to anti-retroviral therapy (ART) for HIV/AIDS patients.
  • The training of 4,315 teachers and building or upgrading 120 classrooms.
  • Financing over 600,000 children to attend elementary school, reaching a 74 per cent national net enrolment rate in basic education.
  • Assisting five PNG universities to complete quality assessments.
  • The completion of 14 Family and Sexual Violence Units.
  • Supporting 328 postgraduate study awards in Australia and 505 study opportunities in PNG.

Our changing program

A new bilateral aid partnership will be agreed in 2015. It will align with the priorities outlined in the Aid Investment Plan 2015–16 to 2017–18 and the second PNG Medium Term Development Plan 2015–17. The objectives outlined in the Aid Investment Plan 2015–16 to 2017–18 and the website reflect ongoing discussions between Australia and PNG officials and may be amended to reflect the formal bilateral aid partnership once agreed.

The current Australian aid program in PNG is implemented in accordance with the PNG-Australia Partnership for Development and the Joint Understanding between Australia and Papua New Guinea on further bilateral cooperation on Health, Education and Law and Order. Together, these set out the mutually agreed priorities and commitments for Australia and PNG to work together to improve development outcomes for all Papua New Guineans.

The 2014 PNG Aid Assessment (A new direction for aid in PNG: refocusing Australian aid to help unlock PNG’s economic potential) considered ways in which Australia’s aid program could more closely align with both Governments’ priorities. This included options to better address key constraints to economic growth and equitable development in PNG. The recommendations of this assessment were agreed by the Australian and PNG Governments and represent a strategic shift in Australia’s approach to aid in PNG.

Given PNG’s sovereign responsibility and financial ability to undertake basic service delivery, Australia is increasingly focusing its efforts in the health, education, infrastructure and law and justice sectors to further develop PNG’s own capacity to deliver services to its population using its own resources.

As part of the shift in Australia’s aid investment agreed between our two Governments, we are increasing initiatives focused on private sector-led growth and aid for trade from 23% to 30% of the program over the next three years. This includes increased support for transport infrastructure, the business enabling environment, agriculture, innovation and partnerships and financial inclusion. We are considering ways to engage the private sector and promote private sector growth in all new aid investments.

Australia is also increasing support to initiatives that empower women to take on greater leadership roles in public and community life, and participate in the economy.

Recognising the importance of the rule of law and effective governance to PNG’s prosperity, we will augment our policing and public sector capacity building assistance.

Australia’s development assistance to Bougainville aims to improve peace, stability and prosperity as the Government of PNG and the Autonomous Bougainville Government continue to implement autonomy arrangements under the Bougainville Peace Agreement. The Australian and PNG governments have agreed that Australia’s aid investments in Bougainville will rise as a proportion of Australia’s total aid to PNG.

We are also continuing to work with the PNG Government to ensure Australia’s regional and global programs complement Australia’s bilateral assistance and promote achievement of Australia’s aid objectives in PNG.

A group of schoolchildren reading books
In PNG there are few functioning libraries outside the school system and most children do not have access to books at all (credit: DFAT).
A group of people at a polling booth
Electoral Commission workers show local candidate posters at a poll booth in Port Moresby, Papua New Guinea (credit: ADF/DFAT).
Three men looking at machinery
The Australia Pacific Technical College utilises existing workshops and training rooms in partnership with local industry to up skill local workers in trades (credit: DFAT).