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Opening of Goroka Base Hospital

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(Speech by the Minister for External Territories, the Hon. C.E. Barnes, IMP.)

Attached is the text of a speech by the Minister for External Territories, IJIr Barnes at the opening of the Goroka Base Hospital today. For the convenience of the press, a summary of the main points is as follows:

Indigenous Participation in Development:

The advancement of the local people is a main objective of Government policy. The Government wants to develop the capacity of the local people to build up and manage their own enterprises -whether in growing cash crops, in raising cattle, in factories, in

shops and stores and in service industries of all kinds.

Mr Barnes said, "Every local and overseas officer in the Territory Public Service is called upon to understand this and to work towards a positive and effective participation by Papuan and New Guineans in the development of their own country".

Investment Programme The Government's investment policy has three basic objectives:

• to encourage employers to provide apprenticeships and training for local employees; • to ensure that a portion of investment in the Territory was reserved now or in the future for the local people; and • to seek maximum local processing in the Territory to increase

the economic benefits to the people of the Territory.

Training of Indigenes to Be Stepped Up

Mr Barnes drew attention to the assistance given by the Administration to the co-operative movement; to improvements in education, particularly in the range of tertiary training institut-ions; and to the appointment of a four man Public Service Board, with two expatriate and two indigenous members.

He said, "There are cases where jobs that are now being filled by expatriates could be done by the native people. For positions that require experience management has a responsibility to set up training schemes now and it needs to provide special opport-

unities to fit Papuans and New Guineans for these positions. Some employers are doing this. It needs to be done everywhere." Land Needed for Development

The Government's development policy in Papua and New Guinea could not succeed unless needed land could be made avail-able, Mr Barnes said.



9 April, 1969. D.T. 5308/67




9TH APRIL 1969.

This splendid hospital is the fourth base hospital

built in the Territory. It will accommodate 278 patients. It

took three years to build and cost nearly $31vi. It will cost

over $500,000 a year to run. If ever there was a measure

to emphasise the Te

fills the bill. It

have been described

Along with those of

provides facilities


rritory's material progress this hospital

is only a few years ago that Goroka could

as a remote village. What a contrast.

Port Moresby, Lae and Rabaul this hospital

for general medical surgical and maternity

During 1967/68 the Administration spent nearly

$14 million on public health services and facilities.

The people of the Territory continually seek

more health services of this kind. They continually seek

more roads and more schools. Up to the present most of the

money to provide these things is made available in the Territory

budget through the grant received from the Australian Government

which this year is about $87 million. Most of the rest of

the money must come from taxes in the Territory.

Last month charges for medical services were

introduced in all district hospitals. The revenue from this

will be small but it is necessary for people to understand

that the provision of health services costs money to everyone.


As the country develops more and more money will be

required to provide services of every kind. Only through

economic development can the people of the Territory get more

of these things out of their ownresources. The policies for

economic development are designed to build up •the economy of

the Territory so that it is able to provide schools, hospitals

and roads the people want. All these things must be paid for.

As the economy develops people will be able to buy

more of the things they want. As people receive more money

from cash crops or as wages the Administration is able to raise

more money from taxes and it can provide more of the things

like roads or schools that the people want as well as pay the

wages for nurses and teachers and agricultural officers and

so on.

Last year a programme of economic development was

introduced. These policies of economic development will

require more money for the Territory budget. The Australian

Government has said it is prepared to make more money available

to support the economic development programme on the basis of

co-operation with the House of Assembly and the people of the

Territory. The House of Assembly has said that it proposes to

increase the Territory's financial self-reliance by raising

the level of Territory tax revenue and loan receipts as much

as possible over the period of the programme.


I believe there is now agreement between the

Australian Government, the House of Assembly and the people

of the Territory to carry out policies directed towards

developing the economy of Papua and New Guinea as rapidly as

possible. These development policies will mean many changes

for the people of the Territory and much hard work for them.

But if they are successfully carried out these policies will

progressively enable Papua and New Guinea as a country to pay

for the things Which the people want from the Administration,

and also enable the people to pay for those things that they

want to buy themselves as individuals.

The Government does not regard the present Development

Programme as perfect. It has no closed mind nor rigid attitude

about the details of the Programme. There will be need for

flexibility and for adapting the Programme to deal with changing

circumstances and with various problems that will arise.

Comments on the Programme in the House of Assembly by Members

of the House will be fully considered. The objectives and

policies of the Development Programme will be kept under review

and in these reviews the Government will take particular

account of the views of the Administrator's Executive Council

who have a special responsibility for giving policy advice to

the Administrator.



The need is clear for policies directed toward

development when we look at the gaps in the Territory economy.

There is a revenuegap. The Administration this

year is spending about X150 million. This money goes on

salaries for agricultural officers, teachers, police and nurses

and other Public Servants along with other spending on buildings

and roads and so on and other Government Departments like Civil

Aviation also spend money in the Territory outside the Admin-istration's budget. This financial year it is estimated that

nearly two out of every three dollars of Government spending in

the Territory is provided by the Australian taxpayer. In

practical terms this means that for a hospital like this the

Territory itself provides only a little more than $1 million -almost p2 million comes from Australia, that is from the

Australian taxpayer. So there is a very large revenue gap.

There is an investment gap. Savings are scarce

in the Territory; little capital for private enterprise can

be raised inside the Territory. Much the greater part of the

capital that is needed has •to come in from outside.

There is a trade gap. Exports pay for less than

half the cost of imports.

The policies for economic development aim to narrow

these gaps.

The palm oil project at Cape Hoskins in New Britain

is well under way. It has been established by overseas

private capital and by money from the Administration. The

overseas company provides the experience, skill and knowledge

to bring this new industry to the Territory. About 250 native

growers are being established on their own blocks. It is

estimated that palm oil exports will earn )3 million a year.

When the project is fully established the Administration will

receive income taxes from the Company and from the native

block holders. The Administration holds 50% of the equity

in the company, so that in the future half the shares in this

enterprise can be held by the people of the Territory

themselves. Meantime the Administration will receive half

of the profits.

The Bougainville copper project will make a massive

contribution to economic development. The project will take

some years to be fully established. A total investment of

about $300 million will be required. Directly or indirectly

it will provide 2,500 new jobs and support 10,000 people. It

will greatly assist the Territory's export earnings. The

Administration has an option to take up twenty per cent

of the shares on behalf of the people of the Territory.

At the tax paying stage will pay 50% of its

taxable income to the Administration and if the Administration's

option on twenty per cent of the equity is taken up, in

total 60% of the taxable income will remain in the Territory.


Coffee was also brought to the Territory as a new

industry from overseas. Along with copra it is the biggest

cash crop for native growers. The tea industry is another

example of a new industry brought here through investment

from overseas. Here again the tea plantations show the

way to native tea, :o:. :cc.

The policies of economic development also require

the building-up of secondary industry. The Administration

stated at the last meeting of the House of Assembly that

new arrangements are being made to consider applications for

tariff protection. This is particularly important for

secondary industry which is essential to provide employment.

The higher the level of protection that is required

the more careful will be the scrutiny which is given to its

possible effect on costs and prices.

Another part of the economic development programme

is the development of service industries like transport and

tour i sm.

In all these things the Administration looks to

the Development Bank to play an important part in providing

capital. Out of five hundred loans approved during1967/68

by the Papua and New Guinea Development Bank, 422 were made

to indigenes. The Bank is making strenuous efforts to

increase its lending to native borrowers. The Board of the

Bank has met at different centres in the Territory and hopes

shortly to open a branch office in the Highlands. Both

officers of the Department of Agriculture and of the Department

of District Administration help the people to prepare requests


for loans from the Bank. Trading Banks everywhere in the

Territory are also agents for the Bank.

The Bank decides whether it will make a loan on the

prospects of success of the applicant and not on whether he

has sufficient security. At this stage of the Territory' s

development the loans sought by native borrowers are for small

or medium amounts. The larger loans made by the Bank have been

made to expatriate enterprises which in the Bank's judgement will

help to build up the Territory's economy.

The Bank has only been established a short time. It

has already achieved significant results. It has been especially

active in seeking to make more loans to native people. It is

becoming understood that the Bank cannot simply hand out money.

Borrowers have to have good proposals. The Bank will go on doing

everything it can to increase its loans to native people.

In announcing the present five year development pro-gramme the Government has made it clear that it is concerned to

see that there will be greater opportunities for-the employment

of Papuans and New Guineans in private industry and in the

Administration and to build up the capacity of the local people

to develop and manage their own enterprises. This applies over

the whole field — whether in growing cash crops, in raising

cattle, in factories, in shops and stores and in service

industries of all kinds.

The success of development policies will depend in-creasingly on the efforts and enterprise of Papuans and New

Guineans themselves as well as on private investment from inside

the Territory and from overseas. Most opportunities for local

people in the future will come from growing cash crops, from

setting themselves up in private business and from employment

in private enterprises.

In agriculture, about half the land under

commercial agriculture is already cultivated by Papuans and

New Guineans. The development programme provides for an

increase of more than 50 in annual plantings of coconuts,

cocoa, rubber, tea and palm oil and about 60% of new plantings

will be undertaken by them. Pyrethrum, passionfruit and rice

are virtually grown only by native farmers; they will

increase substantially. Between now and 1973 total cattle

numbers in the Territory are expected to double. During the

same time cattle run by native farmers are expected to increase

from about 5,000 to about 31,000 head.

In the past Fapuans and New Guineans have only

taken a small part in commerce with the outstanding exception

of the co-operative movement. This has a membership of over

110,000 and an annual turnover of more than $$6 million.

Through the tivvork of the Co-operative Division, the

Business Advisory Service and the Division of Business Training

and I1anagement, a great deal can be done to help local people

get into business in a small way on their orn account or fit

themselves for jobs in larger enterprises. As the development

programme is carried out there v1ill be more and more oppor-tunities at every level for local people.

The co-operative movement, with assistance from the

Administration, is being strengthened. A Co-operative College


to house 150 trainees is being established at Zaloki to provide courses adapted to the new and more complex business

activities to be undertaken by co-operatives. A Territory-vide Federation of Co-operative Unions and a Co-operative

Wholesale Society are being established. In addition to

wholesale supply, new activities recently undertaken or

about to be engaged in include freezer service, fishing,

coastal shipping, boat building, finance and housing.

Overseas investors have an important part to play

in all this which cannot be played by the Administration or

people already in the Territory. They have the money and the

know-how to build new factories and plant new crops. They

have skill and many years of varied experience in many countries.

They can show the way. We have to encourage them to come here.

Their projects provide more jobs. They make it possible for

local people to earn more money by working for them or by

themselves growing new crops.

No one can get a skilled job in industry or the

Administration without education.

The Government is doing a great deal to provide

education but this takes time. The Christian IFissions continue

to make their own very great contribution. Educating anyone

needs primary schooling, secondary schooling and up to five

years in tertiary. This is why there are, so far, only a few

native people who have the education and skills to take the

more important jobs.

But this is changing quickly. Even now it is very

different from a few years ago. Four years ago there were



• 0 -

about 7,000 children attending secondary schools; now

there are 15,000 and by 1973 there will be 24,000. when

there were very few Papuans and New Guineans with secondary

education but within the next four or five years there will

be 5,000 a year or more coming out of secondary schools and

going into industry, administration or to the higher instit-utions. By the end of 1972 about 90 students will have

completed courses at the Institute of Higher Technical

Education at Lae and about 140 students will have completed

degree courses at the University at Port I,Ioresby.

Tertiary training institutions now include agric-ultural colleges, a forestry school, a teacher training

college, a medical and dental college, a co-operative

college and so on. People are being trained not only to

work as employees for somebody else but also by such training

as book-keeping and business management, to run their own


But education at schools and colleges will not by

itself fit people for a position of responsibility. They must

get experience in actual work. There is no short cut. Por

more senior pcitions years of experience are necessary.

Last month I announced the appointment of a four

man Public Service Board. There will be two expatriates and

two native members. One of the native members has the

special task of ensuring that local officers are increasingly

employed throughout the Public Service to the greatest

possible extent.




- 11 --

The Administration has just set up a system of

grants and subsidies to employers providing apprenticeships

and training to their local employees. T.iany firms have been

active in doing this kind of thing. They are training local

people for positions at all levels. 1.iore has to be done in

this way. There are cases where jobs that are now being

filled by expatriates could be done by native people. For

positions that require experience management has a responsib-ility to set up training schemes now and to provide special

opportunities to fit Papuans and New Guineans for these

positions. Some employers are doing this. It needs to be

done everywhere.

Another important aspect of the Government's

policy is that local people should share in the ownership and

management of enterprises financed by overseas companies.

We aim to ensure that a portion of the investment in the

Territory is reserved now or in the future for the local

people. Vie lay particular stress on significant local equity

participation in projects which involve use of the Territory's

natural resources.

A third feature which is looked for in negotiations

'with foreign investors is local processing. We seek the

maximum amount of processing in the Territory to increase

the number of jobs and the export earnings. Enterprises

which lead to improvements in public facilities, such as

roads and wharves, are particularly welcome

The Government would like to see these principles

applied by all overseas companies. Some overseas companies



- 12 -

already operating in the Territory think along these lines.

The Government would like to see them all do so. It would

like to see the principles applied in any new venture or

in any expansion of existing activities.

The development policy, hoveever, cannot succeed

unless needed land can be made available. Part of the

process of development is the building of towns, hospitals,

schools, shops and houses. Similarly development needs land

for agriculture and roads.

When I come to Goroka I am told that it is

practically impossible for the Administration to obtain

land for town development. I am told this in Rabaul, in

P:Fadang, in Lae, in Mount Hagen and in Port I5oresby. If

people who own land demand unreasonably high prices they

are demanding this from the people as a whole.

In any country where development takes place

some people have to give up some land in the interests of

the people as a whole - and they are paid compensation.

Where land is bought or acquired by the Admin-istration it becomes the property of all the people and will

be an asset to Papua and New Guinea for ever. Where Admin-istration land is leased for development the asset in the

land is preserved to the people because the land is only


We have to face up to the fact that the development

of the Territory cannot go ahead unless essential land

requirements are met.

- 13 -

The policies of development that have been

endorsed by the Australian Government and by the Territory

House of Assembly are helping the Territory to move into

the modern world. The emphasis is upon the advancement

of the native people of the Territory and upon economic

development. The policies of the Administration are being

directed towards these policy objectives. Every local and

overseas officer in the Territory Public Service is called

upon to understand this and to work towards the positive

and effective participation by Papuans and New Guineans in

the development of their own country.

I have pleasure in declaring the Goroka Hospital