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Transparency needed on K1b loan

Bridi rice
Bridi Rice - "We need to be more sophisticated than providing loans through Export Finance Australia"

BRIDI RICE
| Australian Council for International Development

CANBERRA - The Australian Council for International Development has commented on news that the Australian government will provide a loan of $US300 million (K1 billion) to Papua New Guinea.

As the PNG government seeks to pursue further economic reform, short-term liquidity provided by Australia could provide a leg-up for long-term change. But this is far from certain.

This is a departure from business-as-usual for the Australian government and it remains unclear how it will manage the heightened risk which comes with it.

Despite assurances that it won’t hit the budget bottom-line, the Commonwealth still bears all risks and losses on national interest account loans.

This should be mandate enough for the government to provide more transparency to the Australian taxpayer on the details of this loan to PNG.

We don’t know if there are any red lines on what the spending can be used for, the terms of the loan or plans for repayment.

We support the Australian government’s efforts to look at new forms of finance to support our neighbours.

But we need to be more sophisticated than providing loans through Export Finance Australia which is focused on exports.

We believe the government should accelerate a plan for a development finance institution which includes foreign policy and sustainable development expertise.

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