Jenny Hayward-Jones of The Lowy Institute, said PNG’s most pressing needs are job creation strategies, improved education services, and more infrastructure.
But she said that under Australia’s existing aid policy, about half of the A$400 million ($317.7 million) given to PNG each year is spent elsewhere.
“(PNG) people need jobs now, they need to go to school now, unless you do something quite radical then you’ll continue with the current problems,” she said.
“Ordinary PNG people aren’t seeing the impact of the (aid) spending…and Australian tax payers want to see outcomes.”
Hayward-Jones said Australia’s current policy focused on good governance and strengthening PNG’s institutions.
But those objectives were much more difficult to achieve and to show improvements in, than building infrastructure, she said.
“More than 50 percent of Australian aid is delivered through ‘technical assistance.’ The average with other international agencies is 24 per cent,” she said.
“That’s basically A$200 million ($158.8 million) of the annual A$400 million ($317.7 million) to administration, salaries, consultants fees and accommodation,” she added.
“It’s a big frustration in the Pacific in the amount of funds going there rather than a health clinic or school.”
PNG is not on track to meet any of its internationally agreed Millennium Development Goals by 2015.
Just last week, a PNG public accounts committee found evidence of gross incompetence in 15 government departments and poor or non-existent record keeping.
There is an estimated one billion kina ($386 million) missing from the public purse.
Hayward-Jones said unless Australia’s policy on aid to PNG changed, its relationship with its northern neighbor would not progress.
“They (the Australian government) risk the usual relationship problems that we’ve had with PNG when PNG doesn’t deliver the outcomes promised,” she warned.
“It’s unclear what Australia will do in such a case. Does Australia then punish PNG by withdrawing aid?”
AusAID, in a written statement, highlighted several public-private partnership schemes and meetings with business groups as part of a new approach.
Australia’s pilot seasonal workers scheme was one initiative that would provide 2,500 jobs for four Pacific island countries, including PNG.
