Reduced Australian Grant

Shocks Papua-New Guinea

WITHOUT warning, Papua-New Guinea has had its allocation of public funds from Australia suddenly reduced by between one and two millions of pounds.

As a result, there has been severe ‘slashing” of public works and de partmental expenditure to which the Territories considered them selves already committed; and there is dismay in some quarters.

In the year ended June 30 last, P-NG spent £6,400,000— being £4i millions granted by Australia, and some £1,900,000 from local revenues.

A total expenditure of over £8 mil lions seems to have been contem plated in 1951-52. But Canberra das announced that Australia’s *rant this year is £5,400,000 (nearly a million more than last year, but far short of what was expected); and officialdom has been obliged to :ut expenditure down to £7,000,000.

This is being done by curtailing public works; reducing Depart mental expenditure by 21 per cent; reducing staffs by 5 per cent; in creasing local fees and charges; and there is grave talk of imposing an income tax.

Mr. C. J. Archer (First Assistant Secretary) and Mr. J. E. Willoughby (research and planning officer) flew to Moresby on September 23 to dis cuss the matter and order the slashing; and it was later reported that the new Assistant Adminis trator (Mr. Cleland) would fly to Canberra to beg for a little mercy from the financial Molochs.

It is not likely that Canberra will give concessions to P-NG, when so much Australian money is involved, and Australians themselvies are being so brutally taxed under the new Budget.

The P-NG economy, in any event, is almost entirely false. Something like this was bound to happen.

There is no reason at all why Aus tralia should keep pouring money into the Territories, on the recent scale and in the recent fashion, ex cept for defence.

Before the war, Papua got along on a fairly regular grant of £40,000 from Australia. New Guinea was almost entirely self-supporting.

Since the war, year by year, Aus tralia has been granting P-NG more and more money, until it has reached staggering proportions. It has not been justified on the score of defence. There has been colossal waste in the Works and Housing set-up, and in the Administration generally—mostly in the shape of ridiculous over-staffing. Money, in the Territories, has flowed like water.

The PIM has warned again and again that these good times could not last. They have not ended yet —£7,000,000 is still a huge annual expenditure—but the sight of the pruning-knife has scared a few people.

Quite a number of public works are reported as slated for cancella tion. The quarter-million bridge over the Markham, the new Mala hang (Lae) airstrip and the new town at Rapopo (south of Rabaul) are among those mentioned, but there is nothing official.

The hold-up of the Markham Bridge might be a good thing. Mr.

M. J. Leahy’s vigorous denunciation of the project, plus a general lack of faith in W-H policies, has created a certain amount of doubt about the wisdom of the Markham Point site.