Business and Development

Australia Gives A Bit More To

THE PACIFIC (A LOT TO P NG)

The Australian budget, presented by the Federal Treasurer, Mr.

Bury, on August 18 had implications for the South Pacific, and especially New Guinea, as well as for Australian taxpayers.

Australia will spend $2OO million on foreign aid in 1970-71 and the lion’s share of this will go, once more, to Papua-New Guinea, which will get $126,100,000 in direct aid, plus $148,000 for “practical training for Papuans and New Guineans.”

Payments to the South Pacific Commission are estimated to be $276,000 —and no doubt the com missioners hope that estimated is the operative word in this case.

Australia’s actual contribution to the SPC in 1969-70 was $283,200.

The commission prepares its budget for presentation in September—and this will be one of the main items on the agenda at the conference in Suva. It is a pretty safe bet that the commission, like every other organ isation in these times of galloping inflation, is expecting in 1970-71 to get more out of those who support it, not less.

Australia’s South Pacific Aid Pro gramme is expected to take $700,000 this year. This is a substantial rise from the $205,000 of 1969-70 but still not anything to cause excitement when grants to projects very remote from the South Pacific area also come in for substantial handouts.

Something called the “Special Com monwealth African Assistance Scheme” is to get $500,000 of Aus tralian taxpayers’ money.

On a different plane, grants under the Colombo Plan are $26,397,000, including $8.5 million in special aid to Indonesia.

Papua-New Guinea will be directly affected by the Australian budget. It has been customary in the territory, where the P-NG budget is usually presented within weeks of the Aus tralian Treasurer’s effort, to increase internal revenue when the Australian grant is increased. This usually means that the P-NG Treasurer slaps on extra taxes, either in customs and

excise or through the Post Office, etc.

He has plenty of precedents this year in the Australian budget. ... . . , , Australian postage rates, already among the highest in the world, have risen again. An extra cent has been put on most items including letters and postcards which are now to be a basic 6c for surface carriage.

Telegram rates have gone up from 36c to 48c for the first 12 words; telephone rentals have gone up by $7 ner vear J * u ’ x U U P-NG Post Office charges have never lagged behind those m Australia and sometimes have been in advance of them.

In Australia, company tax has been increased but there has been some relief in personal taxation. At the same time, through sales tax and excise duties, motor cars, radio and

TV sets, tape recorders photographic goods, watches and fancy goods, cosmetics, cigarettes, petrol and tobacco will all cost more.

For the first time excise duty has been levied on Australian wine. P-NG doesn’t produce wine but it does pro duce beer and cigarettes, two items regarded as milch-cows by all Treasurers with budgets to balance.

This year, for the first time, there will be changes in the method of making Australia’s grant to P-NG.

Instead of a single, all-purpose grant, it will make a basic grant of $33 million to supplement local revenues and the responsibility for spending this (plus locally raised revenue) will be assumed by P-NG’s Government, through the Administrator’s Executive Council.

Another s37i million is earmarked for development, which the Aus tralian Government will oversee; and $29 million provides extra salaries and allowances for expatriate public servants.

These three items make up what

is regarded as the usual Australian annual grant to the territory—it is the amount that appears in the P-NG budget, to be presented this year on August 31, after this section of PIM is printed. In total the three items represent $lOO million, which is just $4 million more than last year.

However, there always have been other Australian expenditures in Papua-New Guinea and these in 1970-71 are estimated to cost Australian taxpayers a further $26 million.

One of these items is $8 million which will go towards financing the new town cf Arawa and other capital

costs involved in the Bougainville copper project. Another $3,600,000, new taken into budget accounting, has already been made available by the Commonwealth to the P-NG Administration as a first installment on the latter’s 20 per cent, equity in the copper project (P-NG’s share will cast $12,500,000 in all). Expen dim, es by Commowealth Depts. in P-NG in 1970-71 are estimated to be another $14.5 million.

The whole expenditure adds up to $126 million and this, according to Mr. Bur>, is over $ll million more than the Commowealth expended on the territory last year.

Sugar from P-NG

in 1975?

Reports in some sections of the Australian Press that Australia was “preventing” P-NG from starting a sugar-growing industry brought a swift retort from Minister for Ex ternal Territories, Mr. C. E, Barnes.

Mr. Barnes said that studies had been going on for some time and then went on to instruct the would be economists on the facts of life sur rounding a sugar industry.

It is, in fact, extremely unlikely that P-NG will ever become a sugar exporting country—the world is over supplied with sugar already and those countries that depend on it have many headaches. These head aches will grow worse for British Commonwealth producers when, or if, Britain enters the Common Market.

However, it has been thought for years that sugar will eventually be produced in places like the Markham Valley for territory home consump tion. This must wait until local con sumption is 30,000 tons per annum at which point a sugar industry would become a viable proposi tion. This rate might be reached about 1975 although in 1969 it was still only 17,000 tons.

Cheap fresh water

from the ocean

Fresh water at less than a dollar per 1,000 gallon should be of interest to many areas in the Pacific which were plagued by periodic droughts.

Although the situation has been coped with by local inhabitants in the past, even to the extent of fall ing back on the liquid in coconuts, the coming of tourism which fre quently establishes itself in dry areas, has brought problems the übiquitous coconut can’t solve.

Distilled sea-water is one way out but until recently this was a costly business. Now a South Australian company is manufacturing an outfit for under $4,000 that will produce 800 to 1,000 gallons of pure water a day.

No outside heat, no chemicals are required as the principal of operation is “flash distillation”.

The machine is the brain-child of Mr. Norman Foley, bom in Scot land, who was a ship’s engineer. He once saw the top of a main seawater valve explode. Water turned to steam and condensed as pure water on the bulkhead. Foley mulled over the in cident for a long time and when he

migrated to Australia four years ago, decided to test his theories.

A tower was built behind a small South Australia factory and in it was housed a lengthy “U” tube filled with salt water and designed to create enough vacuum at its top for the ordinary heat of the sun to do the rest. The thing worked.

Mr. Foley has been joined by others and the desalinator that has resulted consists basically of a blower like those used in an air compressor, a small drive motor and two small pumps.

The machine is now being manu factured by Water Desalination Pty.

Ltd. of Adelaide.

Exporters out to

woo Islands trade

Government and semi-govern mental instrumentalities in both Aus tralia and New Zealand are making a concerted effort to increase their export trade with Pacific Islands but both are limited to more or less traditional markets by available shipping services.

NZ exporters would like to have a piece of the New Guinea trade (see p. 97) but inadequate shipping makes this difficult. Australia, at the same time, is trying to preserve and extend its traditional markets in Papua-New Guinea and Fiji but finds it more difficult to build up in other Pacific territories, again because of shipping.

The NZ Trade Commissioner for the Pacific, Mr. Gordon McLaren, visited Tonga for discussions with Tongan officials and merchants in July. In Nukualofa he said that “vigorous marketing, competitive prices and a regular shipping service” were factors in NZ’s increasing two way trade with the kingdom. NZ now supplies nearly 35 per cent, of Tonga’s total imports and takes all of Tonga’s export bananas as well as other fruit and vegetables.

Mr. McLaren said that when a NZ diplomatic mission is established in Fiji at independence, it will include a trade office with the view of building up NZ exports.

An Australian trade survey mis sion, sponsored by the Export Development Council, was in Papua- New Guinea in early August. The council is concerned that Australia must maintain its position in the growing P-NG market. Supremacy it still has, of course, but this is steadily being whittled down. In 1955 Austra lia supplied 65 per cent, of ter ritory imports. In 1969 this had fallen to less than 55 per cent.

Fiji sugar quota

increased for 1970

On the sugar scene, there was news that Fiji’s sugar export quotas for this year had been boosted by a further 10,000 metric tons.

The Minister for Natural Resources, Mr. D. W. Brown, an nounced this after receiving advice from London that the increase had been recommended by the Hardship Relief CommiLee of the International Sugar Organisation.

As a result, Fiji is expected to market a total of 336,000 long tons of sugar this year, compared with

313,000 long tons in the 1969 calendar year.

South Pacific Sugar Mills Ltd. showed a profit of $F 1,471,690 dur ing the year ended March 31—a drop of more than $750,000 compared with the previous year’s profit.

A directors’ report released in August said that despite the smaller profit, the annual dividend would not be affected. “The lower profit was mainly due to the very low produc tion and once again there was in sufficient cane to fully utilise our plant capacity,” the report said.

“Fortunately, the financial effects of the low production were offset to some extent by a higher income per

ton of sugar than in the preceding year.”

The directors have again recom mended a dividend of 7i per cent., amounting to a payment of $1,387,500 to shareholders. The same dividend has been paid since SPSM, Fiji’s only sugar miller, was formed in 1961.

The directors anticipate a “serious reduction” in the company’s share of the return from the current year’s earnings. This is due to the fact that the Denning contract will come into operation for the first time.

Copra down but

still lucrative

The Papua-New Guinea Copra Marketing Board adjusted copra prices downward from August 1.

Including the bounty of $3 per ton, the prices payable now are $136 per ton for hotair; $133 for FMS grade; and $l3l for smoke-dried.

Reason for the adjustment was the gradual fall of prices fixed by the London Copra Assn, and Nether land interests over the month of July.

Reports from London at the end of July indicated a dull market for copra, with a downward trend. This follows easier prices for all alternative edible oils.

The P-NG Copra Marketing Board has made a final price adjustment for copra delivered to its stores during 1969 and this was distributed to producers on August 14. The adjustment was at the rate of $28.08 per ton—with the result that P-NG copra producers became richer by a total of $3,296,503 on pay-out day.

Tarawa's first bank

opens in November

The Gilbert and Ellice Islands will get its first commercial banking ser vice when the Bank of New South Wales Ltd. opens its doors in a modest, leased building on Bairiki, Tarawa, in November.

The Wales, which has been doing some shrewd Islands expansion in re cent years in Nauru, Fiji, Norfolk Island and New Guinea, will start with excellent prospects in the GEIC.

To start, the Wales takes over the government savings bank, which has deposits of about $400,000. It also takes over many of the functions of the GEIC Government Treasury but does not immediately cut into the functions of the British Govern ment-owned Crown Agents, which re ceives commission for investment of GEIC reserves.

Then there’s the accounts of an

estimated 100 expatriate families, mainly on Tarawa, and the business of the Wholesale Society, governmentowned main trader, shipper and diversified importer. . , , The Wales s biggest potential cash inflow, however, is the money sent back by trained GEIC seaman working aboard Hong Kong or German ships. The estimate is that each sends back an average of $4O per month to relatives etc in the GEIC riv- SUO 000 this year $llO,OOO this year.

Long-term GEIC business prospects are, of course, at best, hazy. after the Ocean Island phosphate deposits are worked out, about 1975.

C,| V/ ,' iUVQ S '-ItlDOnk OpCHS

foi* buSIIIGSS

With a certain amount of fanfare and after many weeks of intensive preparation, the First National City Bank of New York opened its lavish new Suva office—the first in the South Pacific—on August 15. , , w . . . f ,-,Fms M'n.ster for Labour > Ratu Edward Cakobau, as an enterprise which would provide new avenues of employment. Of the initial staff of 26, all but the three executives are locals.

In Fiji, it is offering a full service operation, including a range of trading and savings bank functions.