Treasurers meet to sort out future

THE Australian and PNG treasurers have agreed to explore refocusing Australia's aid on several high-impact projects.

THE Australian and Papua New Guinea treasurers, Joe Hockey and Don Polye, have agreed to explore refocusing Australia's aid on several high-impact projects.

This would be instead of what Mr Polye described as a current aid commitment "spread thinly on many small projects".

The PNG Prime Minister, Peter O'Neill, has welcomed the Abbott government's restructuring of AusAID, saying: "AusAID has become a huge bureaucracy and we have made it known for some time that aspects of their operations in PNG have been disappointing."

Mr Polye, who met Mr Hockey in Bali last week, was reported in PNG to have claimed Mr Hockey assured him Australia's $507.2 million aid to PNG this financial year would remain intact.

Mr Hockey's spokesman said yesterday the treasurers' conversation seemed to have been "over-interpreted" and "no specific commitment" had been made during a general discussion on the topic.

The commitment to reduce this year's AusAID budget by $656m from $5.66 billion remained in place, the spokesman said, but the detail had yet to be considered. However, Mr Polye's spokesman said the PNG Treasurer's remarks, made at a press conference in Port Moresby, had themselves been "exaggerated".

The Abbott government has said it would stand by further aid commitments made by the Rudd government as part of the asylum-seeker deal struck two months ago.

An agreement to share equally the $355m cost of renovating Angau hospital in Lae figured prominently in this arrangement. The hospital proved unable to treat adequately several PNG porters wounded in an attack on Australian and New Zealand trekkers two weeks ago, with one of them dying there.

Mr Polye said he and Mr Hockey had agreed to explore developing a public-private partnership model "acceptable to both economies for engaging in our two private sectors, capital markets and governments".