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Tuesday, 15 May 1973
Page: 2094

Mr PEACOCK (Kooyong) - The Opposition supports the Bill. The Bill seeks approval for a contractual guarantee for overseas borrowing in foreign currencies by Papua New Guinea not exceeding $A14.3m. I wish to refer to matters concerned with the controversy that occurred over the future of the Papua New Guinea national airline. I shall relate my remarks to the raising of funds under this loan Bill because they have some significance to the fact that this is the first time that the Australian Government has given a guarantee to Papua New Guinea for that country to seek funds overseas other than from the Asian Development Bank or the International Bank for Reconstruction and Development. We support the contractual guarantee because, as it relates to the first loan that is to be raised in this manner, if Papua New Guinea is to be favourably recognised as an emerging international entity it is absolutely essential that the first issue be successful. Therefore our contractual guarantee must be included in the prospectus to assist in obtaining the borrowings.

This is obviously the reason for the urgency of this Bill. The Opposition fully recognises the need to depart from the normal procedure of giving parliamentary approval after a loan agreement has been signed. I said earlier that theloan will be the first raised by Papua New Guinea on international capital markets. But it is, as I inferred, not the first time that Papua New Guinea has obtained overseas borrowings. References are made in the second reading speech of the Treasurer (Mr Crean) to the borrowings from the International Bank for Reconstruction and Development and the

Asian Development Bank. In such cases, the guarantee has been given after the loan agreement. Clearly, it is imperative on this occasion, as I have said, to give the guarantee in advance. I understand that the guarantee will continue for the duration of the loan, that is, it will therefore continue after independence. In this sense, it is akin to the guarantees given previously to the International Bank for Reconstruction and Development, but not to the Asian Development Bank which has never insisted on the condition that the loan continue until independence, as I understand the IBRD does.

The other distinction is that the Joan is not for specific projects which normally are undertaken specifically in relation to the loan from the ADB or the IBRD. In this case the loan will be to finance the public works and services of Papua New Guinea. In other words, it is to support its budgetary matters. So, as far as the nature of the guarantee is concerned, we are fully in agreement with the Government's proposing it in this matter and with the form of the guarantee as referred to in the Bill itself. What I want to raise and call into question is that here we have a situation in which Papua New Guinea is seeking loans overseas, and it is saying in its prospectus that it will receive a guarantee from the Australian Government. This should add weight to its borrowing powers. But at the same time, as a consequence of statements made by a Minister in this House, the actual security of investments in Papua New Guinea has been called into question and the manner in which the Government has been administering Papua New Guinea has also been called into question.

Mr Chipp - Which Minister?

Mr PEACOCK - I do not relate my remarks to the Minister for External Territories (Mr Morrison) who, as I said on a previous occasion, appeared to me to be working particularly closely with the Government of Papua New Guinea. He has my full support in what he is doing in working so closely with that Government. I have abstained from making remarks in this Parliament about the statements of the Minister for Civil Aviation (Mr Charles Jones) because I believed that it was only right that the matter be cooled and that a fresh and proper approach be taken to the national airline of Papua New Guinea. This will be the subject of discussions on Friday between the Minister for External Territories and the Minister for

Civil Aviation. I have abstained from making remarks in this House on this matter because I wanted to be sure that a re-examination would be made. But as this Bill is before the Parliament and as it refers to the opportunities for Papua New Guinea to borrow overseas, it is related to the question of the development of an airline and the close association of Australia to Papua New Guinea, and it is necessary only a few days before the Minister's return to Papua New Guinea to register a couple of points.

Mr Morrison - Mr Speaker, I raise a point of order. I submit with respect that the honourable gentleman is exceeding the terms of reference of the Bill that we now have under consideration. This Bill relates to a loan guarantee, lt contains no reference to the use of those funds for civil aviation, and I ask that those observations be not admitted.

Mr PEACOCK - Mr Speaker,1 ask you to hear me on that question. [ reject the submission that has been made by the Minister for External Territories and 1 submit to you as persuasively as I can that the submission should be rejected for the following reasons: When we have a Papua New Guinea Loan Bill before us, it normally is for. specific purposes. On this occasion, the proposed Papua New Guinea Loan is to support the budget of the Papua New Guinea Government and the funds provided by the loan will be spent also on civil aviation facilities. In other words, it is a loan from international markets which will contribute to the budget of Papua New Guinea. The loan is not being made to fix a road, to develop a highway or to make a bridge. It is a very different loan Bill from the normal ones and I am entitled, I submit, under this particular Bill, to make reference to these matters which will come naturally, under the aegis of the Papua New Guinea budget.

Mr Morrison - With respect, Mr Speaker, the civil aviation powers are not powers that have been transferred to the Government of Papua New Guinea and, as such, are not included in the budget of the Government of Papua New Guinea.

Mr PEACOCK - I also add, Mr Speaker, that I am very well aware that the civil aviation powers have not been transferred. 1 think I am as well aware of that as is any man in this chamber! T arn aware too that if we were discussing the transfer of powers, we would have done so under the Bill which the Government introduced a fortnight ago. That has nothing to do with this Bill.

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