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Thursday, 21 March 1968

Mr BARNES (McPherson) (Minister for External Territories) {3.26] - The honourable member for Banks (Mr Costa) criticised the Government for its attitude towards pensioners. I remind the honourable member that no Government in Australia's history has contributed more to the National Welfare Fund than has this Government. From recollection 19% of the last Budget was devoted to the National Welfare Fund. This is an achievement not equalled by any other government. Notwithstanding the increasing total of the Budget each year, the percentage of the Budget devoted each year to the National Welfare Fund seems to be increasing. This situation flows directly from the Government's economic policies; it is the result of the Government's encouragement to great industries, such as the mining industry. It is the result of the Government's encouragement of overseas investment in this country; of its encouragement to people overseas to bring their knowledge to this country and to invest hundreds of millions of dollars, in, for example, mining. After all, the Government is a sleeping partner in these companies. It receives about 50% of their profits. All of this goes into the cake of which every Australian has a share. So no criticism can be levelled at this Government over the amount that it makes available to the National Welfare Fund.

The honourable member also criticised the Government over increases in the cost of living. Those increases have been moderate, as statistics for recent years will show. When the Labor Party was last in power - admittedly a long time ago - we had galloping inflation. What did the Labor Government do to control it? It imposed all kinds of controls. It even endeavoured to nationalise banking. We had petrol rationing. People could not buy motor cars or build or enlarge houses. Those are the kinds of controls which a Labor Government imposed. The honourable member has suggested that similar controls should again be imposed. The Labor Party has not changed its views on controls, and the electors should be aware of this fact.

In the Governor-General's Speech the Government's policy for Papua and New Guinea was plainly set forth. A major feature is that renewed emphasis will be given to the increasing role of Papuans and New Guineans in economic development and in social, administrative and political affairs. What is uppermost in the minds of many Papuans and New Guineans today is development - economic development. I want now to talk about development and the role of the people of Papua and New Guinea in that development.

When I say that the task of nation building in Papua and New Guinea is as much an economic problem as a political one, I run the risk of being misunderstood. I can well imagine that to some such words would suggest a slowing down in political advancement and all that that implies. But this is not the case. As has been stated before:

It is the expressed intention of the Commonwealth to help the inhabitants of the Territory to become self-governing as soon as possible and to ensure that when this aim is reached the Territory will, to the greatest extent feasible, be able to stand on its own feet economically.

What we seek is an economically selfreliant people who can with confidence and dignity assume the responsibility of selfdetermination.

As I have said on other occasions, without substantial economic self-reliance, selfgovernment or independence would be a mockery. What then is the role of the local people in this development and how can the imagination and energy of Papuans and New Guineans be brought to bear on the task of building a nation economically as well as politically? I believe that there is a steadily growing recognition by the local people that they must rely less on Australian aid and more on international aid and overseas private investment, and that development by outside aid must increasingly be based on their own active support and increasing participation. An atmosphere of mutual confidence and co-operation between Papuans and New Guineans, the Administration and overseas investors, will provide the basis for real progress.

The last few years have seen substantial progress, due increasingly to the efforts of Papuans and New Guineans. Take agriculture for example, which is, and will remain for as far as we can see ahead, the Territory's basic industry. Exports of primary produce have doubled over the last 10 years. About half this increase has been achieved by the indigenous producers themselves. Already 60% of the coffee, nearly 30% of the cocoa and about one third of the copra in the Territory comes from native producers. At the same time there is rapid development taking place in the new crops - tea, pyrethrum and oil palm. These developments will mean rises in exports, more opportunities for Papuans and New Guineans as cash croppers or wage earners and more scope for local enterprise.

In every field the Government has set itself the task of encouraging the local people to take advantage of opportunities as they arise. There are opportunities as never before for young people to gain qualifications to equip them for the great task of nation building and fit them for responsible positions in the public service and in private enterprise. Enrolments in secondary schools have increased steadily over the last 5 years, though much remains to be done. There is a rapidly growing stream of trained people coming from training institutions in the Territory. In the Public Service the number of local officers in professional, administrative and clerical positions has more than doubled in the past year.

Many new institutions have been set up. The Bulolo Forestry School, the Vudal Agricultural College, the Administrative College, the Papuan Medical College, the Papua and New Guinea University and the Institute of Higher Technical Education have been established to provide a wide range of training for Papuans and New Guineans. The next few years will see further developments along these lines. A co-operative college is being planned to take 150 students. Existing institutions will be reshaped to meet changing needs.

Much has been done to increase the pace of development. Yet the needs are vast and great problems remain to be overcome. One set of problems relates to the supply of suitable land for various development purposes and to customary land tenures. Traditional land tenure arrangements have not operated favourably for economic development. Again, a good deal of development can take place only if native land holders are prepared to sell land to the Administration, and sometimes they are reluctant to do this. These problems cannot be overcome easily and require close co-operation. Some of the problems of economic development are not as yet easily understood by Papuans and New Guineans. They learn readily how to grow new crops but tend to be perplexed when they find market prices changing.

There has been and will be a constant effort to expand the Territory's exports. One aspect of this is that the smaller and least developed countries such as Papua and New Guinea may encounter special problems in obtaining for some of their newcomer industries a firm and expanding place in world markets dominated by large and longestablished producing countries. The Australian Government is concerned that the problems of Papua and New Guinea should be clearly understood and recognised in world councils. In a recent statement as leader of the Australian delegation to the second United Nations Conference on Trade and Development at New Delhi, the right honourable the Minister for Trade and Industry (Mr McEwen) drew attention to the role of Australia in the development of Papua and New Guinea and emphasised our intention to press for arrangements which will take into account the circumstances of this newly-emerging country.

In a number of commodities Papua and New Guinea producers have a valuable asset in the form of their ready access to the Australian market where, for example in the case of coffee, their preferential claims are internationally recognised. However for most Territory agricultural products, including new products, access to world markets also is essential. Territory coffee, cocoa, copra, timber and other traditional exports are already firmly established in overseas markets and there is every confidence that the new crops, especially tea and palm oil, also will be successfully established.

In Papua and New Guinea agriculture is the key to development of the economy as a whole in terms of export income, in terms of providing the subsistence farmer with the opportunity of entering into the cash economy, and in the achievement in due course of economic self-reliance.

The overall balance of trade for the Territory has deteriorated over the last few years especially as with increased government spending more money has been spent on imported goods. Exports over the last 12 months are paying for only 40% of imports compared with 54% 10 years ago. But the position will improve as export industries are expanded, and as agricultural productivity is raised and greater use is made of local resources. Local revenue has doubled over the last 3 years, and comprises about 40% of total Administration expenditure. But the task of building up the Territory economy and the capacity of Papuans and New Guineans to tackle these problems has meant increasing expenditure by Australia. The grant has risen from an annual $21m to $7 8m over the last lf> years and there has been greatly increased direct spending by Commonwealth departments.

The Australian Government grant to the Territory Budget over the 5 years to June 1968 will total $3 16m. This does not include direct Commonwealth spending in the Territory. In 1967-68 the Government's expenditure of an aid character - that is excluding defence - amounts to over $40 per head. There are few nations receiving aid of this order. About fifty developing countries receive less than $5 per head and less than ten receive more than $20 per head.

The 1964 mission from the World Bank recommended a 5-year programme of economic development. This was accepted by the Government as >a guide for planning, and a revised programme is being prepared. The Government recognised that a development programme on the line of the Bank's recommendation would require increased aid to the Territory and that this would have come mainly from Australia. Some people have criticised Australia for wanting to develop the Territory on her own. This criticism is unfounded. The Government is actively seeking assistance for the Territory from other sources.

Negotiations are under way with the World Bank on loans for several projects in the Territory. In the last few months Bank experts have visited the Territory to examine agricultural, livestock and telecommunications projects. These could qualify for perhaps $12m to $13m in loans from the Bank, or credits from its affiliate the International Development Association. Other possible projects are being kept under review. The United Nations Development Programme has agreed to finance a basic transport survey in the Territory this year. It is expected to contribute $430,000 and the World Bank will be the executing agency.

The United Nations is also financing part of the development of the Goroka Teachers College at a cost of about $1.2m, the balance of $2.4m being contributed by the Administration. A number of other projects for United Nations assistance are either operating or are under consideration. If loans now under discussion with the World Bank group are negotiated, the total aid from international agencies will amount to about $2 per head per annum over the next 3 to 4 years. The Australian grant this year to the Territory's Budget is equivalent to $34 per head.

But the value of international aid cannot be measured solely in terms of money. It can bring much needed technical assistance. It can help also to attract international private capital and engender confidence in the business community. I believe that private capital from overseas both from Australia and other sources, together with the activities of the local farmer and the local businessmen, can and must play a big role in the Territory's development. The Papua and New Guinea Development Bank, established in July 1967 and especially charged with the responsibility of lending to small enterprises, will also play a vital part.

Major investmentsin oil palm, copper, forestry, and oil exploration are under way or in prospect. The development of the Bougainville copper deposits could lead to the investment of over $100m. We are attracting international firms with adequate capital and expertise to develop the productive potential of the Territory with provision for the participation of the local people. Australian Government aid, World Bank loans, United Nations assistance and private money from overseas are all vital; but they will not be enough. They will go only part of the way to satisfy the aims and aspirations of the people about whom I spoke earlier.

The indigenous people continually press for more roads, bridges, schools, hospitals, and other facilities and services. This is a start. Progress can begin with pressure for economic development. But with this pressure there is a wider realisation that without giving hard work, shouldering responsibilities, paying more in taxes, acquiring skills and learning to manage their own affairs, sustained progress cannot be expected. This can be achieved only by active participation by the people themselves.

It will take time for their efforts to bear fruit. A self reliant nation and a progressive economy cannot be developed overnight Yet, if the people accept the challenge with enthusiasm, they will be able to have in due course the things they want - cash crops and the consumer goods that go with them, and the roads, bridges, schools, hospitals and other public works that follow. The Government on its part, will continue to foster close partnership and mutual understanding between Australians and the people of the

Territory in all fields. Australia is helping with money and people. I do not believe that the path to economic development can be paved only with money, handouts and good intentions. But the Government, in all its efforts, will place great emphasis on building up the capacity of Papuans and New Guineans to help themselves.

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