Scott Morrison splashes cash in the Pacific as China fears loom

Prime Minister Scott Morrison will pledge $3 billion towards much-needed infrastructure in Pacific nations as part of a frank admission Australia has sometimes taken its neighbours for granted and amid concerns that China is building its influence on Australia’s doorstep.

In what he badges a "step-up to the Pacific", Mr Morrison will on Thursday also announce the establishment of an Australian Defence Force mobile training team that can travel to Pacific nations to help them with skills including infantry fighting, peacekeeping and disaster response.

The announcements in a speech to soldiers in Townsville will be widely read as aiming to edge out growing Chinese infrastructure-building in Pacific nations and will come shortly after Foreign Minister Marise Payne arrives in Beijing for talks that signal a thaw in the year-long diplomatic frostiness between the two countries.

"Australia has an abiding interest in a south-west Pacific that is secure strategically, stable economically and sovereign politically," Mr Morrison says, according to speech notes provided by his office.

Raising questions about sovereignty have in the past been a way for Western leaders to express concern that China is loading developing countries up with infrastructure-related debt they cannot handle, making them politically beholden to Beijing, though Mr Morrison stresses Australia will co-operate with other countries including China.

In surprisingly blunt remarks, Mr Morrison says Australia has in the past taken the Pacific for granted.

Prime Minister Scott Morrison.Credit: Dominic Lorrimer

"While we have natural advantages in terms of history, proximity and shared values, Australia cannot take its influence in the south-west Pacific for granted, and too often we have," he says.

He says the Pacific is estimated to need $US3.1 billion ($4.3 billion) a year in investment through to 2030.

He will announce the creation of an Australian Infrastructure Financing Facility, which will make available $2 billion for grants and long-terms loans to support infrastructure in the Pacific and Timor Leste, prioritising telecommunications, energy, transport and water projects.

Mr Morrison says this money will "stretch our aid dollars further". But he does not say whether any of the money will come from within the existing aid budget or from budget savings elsewhere.

He will also commit an extra $1 billion to Australia’s export credit agency - called Efic - which helps Australian companies invest and expand overseas by giving them loans and guarantees.

Mr Morrison says this funding will "support investments in the region which have a broad national benefit for Australia". Australia and like-minded countries such as the US are keen to attract more private capital into the Pacific.

His comments come ahead of the APEC meeting in Papua New Guinea, where Chinese President Xi Jinping will make his attendance part of a full-blown state visit and will convene his own separate meeting with Pacific leaders.

PNG has been among the biggest recipients of Chinese-funded infrastructure and has signed up to the controversial "Belt and Road Initiative", which is widely seen as a strategic play by Beijing.

Both sides of politics have dramatically sharpened their focus on the Pacific nations this year amid concerns from intelligence and security officials about Chinese activity.

Last week, Opposition Leader Bill Shorten said a Labor government would set up a government-backed infrastructure investment bank to provide concessional loans for the Pacific.

Mr Morrison says a new ADF Pacific "mobile training team", to be based in Australia, will travel to Pacific countries when invited to help those countries forces learn skills in "humanitarian and disaster response, peacekeeping, infantry skills, engineering and logistics".

The Royal Australian Navy will also carry out more missions to the Pacific for training and exercises. Australia is giving its neighbours 21 new naval patrol boats, which are being built now.

In a so-called "soft power" diplomacy gesture, Mr Morrison will also announce that the government will work with Australian media companies to get more Australian content on Pacific televisions.