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Wednesday, 5 May 1965


The PRESIDENT - There being no objection, leave is granted.


Senator GORTON - Honorable senators will recall that the Government invited the International Bank for Reconstruction and Development to arrange for a mission of experts to undertake a comprehensive survey of the economy of Papua and New Guinea. A team of ten experts, including economists and specialists in agriculture, livestock, transport, education, health and other fields carried out the survey in 1963, and their 500 page report was presented to the Government in October last year. Printed copies of the report are expected to be received later this month. From the limited supply of advance mimeographed copies available at present, a number have been placed in the Parliamentary Library.

The Mission was asked to make a general review of the economic potentialities of Papua and New Guinea and to make recommendations to assist the Government in preparing a development programme designed to promote economic growth and raise standards of living. It was asked in particular to assess the resources of the Territory and the scope for their development, to suggest measures to expand the economy, to examine the effect of current economic, fiscal and administrative policies and measures on the development of the economy and to recommend in broad outline an appropriate allocation of resources likely to be available for investment.

The Government is greatly indebted to the Mission for its thorough review of the resources of the Territory and for its valuable analysis of the prospects for economic growth. The Report is based on a comprehensive study of the Papua and New Guinea economy and will be of great benefit to the Commonwealth Government in its consideration of future policies. The Mission has recommended a five year development programme which places major emphasis on stimulating the productive potential of the Territory and on advancing the native people through education, vocational training and the acceptance of greater responsibility. The Government endorses these objectives which are vital if the movement of the Territory's two million people towards self-government is to be paralleled by steady progress towards economic self-dependence.

The Mission's main proposals for increased production relate to the primary industries of the Territory. The specific programmes recommended envisage a doubling of total existing plantings of coconuts, cocoa, rubber and tea and a tenfold increase in cattle numbers to 300,000 within 10 years. A trebling of forestry production over five years is also envisaged. Export earnings from the production of the main agricultural commodities and forest products are expected to double within five years. Increases in production under the Mission's programmes are to be achieved partly by investment from overseas and by expatriate settlers and partly by Papuan and New Guinea farmers. The Government accepts these programmes as a working basis for planning in the Territory. Numerous proposals and suggestions have been put forward by the Mission for the development of manufacturing industry, tourism, mining, power supplies, transport and communications. These are accepted by the Government as valuable guides for policy and action.

In the field of education the Government endorses the Mission's view that expansion at the secondary, technical and higher levels deserves high priority so that increasing numbers of the native people can participate effectively in the economic advancement of the Territory. Education policy has been preparing the way for this for many years. The Government, along with the Mission, recognises that the rate of expansion of such activities as curative health services, primary education, public utilities and general government services, should be related to the capacity of the Territory's population to contribute towards them. Tt also recognises the soundness of concentrating additional expenditures on increasing production from agriculture, livestock and forestry and on accelerating the advancement of the native people through training and education. In recent years a growing proportion of additional expenditure has been spent on these activities.

The Mission's report expresses the view that the goal of economic self-dependence cannot be reached for at least several decades, even with the substantial economic growth which its production programmes envisage. It recognizes that there will need to be increasing aid from outside, primarily from Australia, in the form of skilled manpower and funds. At the same time, economic expansion will require the native people to play an increasingly important role in development. For example, people in the villages will be able to do much by cooperating in building rural primary schools, houses, medical aid posts and health centres. Moveover, economic development over the next few years will require a substantial increase in the number of administrative, professional, technical and managerial personnel, both in the Public Service and in private enterprise. Much is being done to accelerate the education and training of native people in the necessary skills. This process will take time and, meanwhile, to achieve the required progress in the immediate future there will need to be a concentrated effort in recruiting increased numbers of professional and technical personnel from Australia for service in the Territory. It is estimated that in addition to the present local and overseas strength of the Territory Public Service, to whose work the Territory already owes so much, about 2,000 more officers will be needed from outside the Territory, including about 500 qualified agricultural, livestock and forestry officers and 500 teachers for Administration secondary schools.

The International Bank Mission suggests that a service patterned on the British Voluntary Service Overseas scheme and the U.S. Peace Corps should be established to enlist people with special skills who wish to serve in the Territory for short terms. The Papua and New Guinea Administration in the normal course already offers employment for terms as short as two years and volunteers already work with the Christian missions in the Territory. However, the Government is examining the possibilities of the Mission's suggestion in conjunction with a review of present arrangements and facilities for Australians to serve abroad in SouthEast Asian and other developing countries.

The task of economic expansion places a heavy responsibility on Australia to provide the bulk of the skilled people and the money that will be needed from outside the Territory. The Commonwealth grant to the Territory during the financial year ended 30th June 1965, is £28 million in a total Territory budget of about £45 million, and the Commonwealth Government recognises that the development of the economy now envisaged will involve increased Commonwealth financial assistance over the years immediately ahead. The Government will also give its full support for the provision of the necessary human and physical resources. It will also explore the possibilities of aid from international agencies.

The Government has accepted the Mission's strong recommendation that developmental credit should be made readily available in the Territory to encourage rapid expansion of private enterprise and in particular to finance small scale native agriculturalists. The requirements in particular fields are being examined and specific proposals for a development credit organisation suited to Territory conditions will be drawn up for the Government's consideration.

The Government has already done and is doing much to give effect to its policies directed to the accelerated development of the Territory. It has financed a rising level of Government investment. It has strengthened the Administration and has provided substantial tax incentives for pioneer industries. It has also announced a programme for university and higher technical education. Much has already been achieved in the very directions in which the Mission believes effort and expenditure should be concentrated. The Government looks forward confidently to further important advances - to new private investment from within and outside the Territory, to a rising tempo of activity by the Government and private enterprise, and to a rapidly growing participation by the native people.

Further advances of this kind are vital. The progress being achieved in the Territory in political development calls for a parallel move in the economic field. It is not the Government's view that self-determination must wait until the Territory has a fully viable economy, but the present degree of economic dependence is extreme. If we had been hoping that the Mission's study would show us a way of moving immediately towards reducing the gap to reasonable proportions, we would be disappointed. There is no escape from the reality that the only prospect of moving towards selfsufficiency in the longer term is to increase economic dependence in the short term. There is no needto over-stress the contradiction between these economic realities and talk of early political independence, but this contradiction does have a significance that must be faced.

The Government places a high value on this report of the Mission from the International Bank for Reconstruction and Development. The report has been the subject of close and serious attention by the Government, and it will provide a constant reference in the Government's consideration of economic policies in the Territory. The Government's acceptance of the Mission's programmes for increased production in the Territory as a working basis for planning does not mean that the Government is committing itself to a series of cut and dried programmes or that it necessarily accepts all the Mission's views. Moreover, there will be no question of imposing decisions on the Territory without regard to the views of the people's elected representatives, and as decisions are made on particular questions views expressed in the Territory House of Assembly on those questions will be taken into account. Regard will also be paid to the opinions of people and organisations directly interested in the economic development of Papua and New Guinea. It is the Commonwealth Government's policy to encourage the rapid but sound expansion of the Territory economy on the basis of close and continuing partnership between Australia and the Territory. The Government is backing that expansion, but success will depend also on the strong support of people in the Territory, and Papuans and New Guineans will increasingly need to work for and accept responsibility for their own economic, social and political advancement.

I present the following paper -

Papua and New Guinea - Economic Development - Report of Mission from International Bank for Reconstruction and Development - Ministerial Statement, 5th May 1965 - and move -

That the Senate take note of the papers.

Debate (on motion by Senator McKenna) adjourned.







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