Manus island decision unlikely to threaten PNG's aid

Transcript

An expert in Australian foreign aid says hundreds of millions of dollars promised to Papua New Guinea for hosting an asylum seeker detention centre is unlikely to be threatened.

Last week, PNG's Supreme Court declared the centre on Manus Island unconstitutional, and the prime minister, Peter O'Neill, announced that it would close. 

Officials from both countries are due to meet early this week to work out what to do and what the implications of the decision are. 

The head of the Development Policy Centre at the Australian National University, Stephen Howes, says most of the money promised to PNG for hosting the centre is yet to be spent and it's unclear what implications the court ruling will have for that.

But he told Jamie Tahana it's unlikely the aid package will be cancelled. 

STEPHEN HOWES: It was an agreement that came with benefit for PNG as well as costs, and the aid deal was, I think, about just over (AU)$400 million over four years, that's about 100 million a year that was agreed back in 2013. But if you actually look at the aid to PNG, it's only gone up by about 15 million compared to what it was before the deal. So it shows that a large chunk, most of that extra money hasn't been spent and I think that reflects the fact that the money was tied to some new projects, the most prominent of which was the reconstruction of the hospital in Lae. Of course, you know, that's a major undertaking and you've first of all got to design that new hospital, work out what to do with the old hospital, work out interim arrangements, and in that case for example the design has been completed but the construction hasn't yet commenced. So I think with this large amount of money being spent on new projects it's not surprising that it's had a slow start and most of that money remains unspent. Of course it remains a question: 'Well, what's going to happen with that money? Is PNG ever going to see these projects? Are they going to be seen through to completion?' That's one of the unknowns, PNG will certainly be making the case that it has provided this processing centre for three years, that it was closed down by factors beyond their control, namely the Supreme Court decision, so they'll certainly be pressing for those funds to be spent and those projects to be completed. It remains to be seen what the position of the Australian government will be. But you've got to think that given the  way Australia's reacted, given their determination that these asylum seekers and refugees should remain in PNG, they will need the cooperation of the PNG government in some form or other and so you would think it wouldn't really be in Australia's interests to start withdrawing that aid.        

JAMIE TAHANA: And I see now we've got Australian politicians, well mainly the opposition, saying 'just offer Papua New Guinea some more money to change its laws.' Is this easier said than done? 

SH: Much easier said than done. While PNG will press the case that existing aid commitments should be honoured, I don't think they will be asking for more aid and they certainly won't be offering in return  a change in law. In fact, you know they did change the law, but the Supreme Court ruled that that change in constitution was itself unconstitutional. So PNG's gone down that route, it's hard to think what else they could do to make this centre legal -- that route is closed. And then in addition, it's not a popular deal, as I've said, it's now seen to have incurred these costs and so apart from it not being really feasible there doesn't seem to be the interest on the PNG side either.