The Australian Government today agreed to provide a US$80 million financial support facility to PNG following advice from the PNG Government and the International Monetary Fund (IMF) mission that PNG has agreed on a Letter of Intent in support of its request for a Stand-by Arrangement with the IMF. This delivers on a commitment made by the Prime Minister, Mr Howard, during his October 7-9 visit to Port Moresby.
This short-term facility will bolster PNGs reserves, allow for a reduction in PNG Government debt to the Bank of PNG, and contribute towards a further strengthening of confidence in the PNG economy.
Australias assistance is further evidence of our commitment to PNG and follows an agreement by Australia on 1 September to bring forward some $30 million in aid budget support payments to PNG.
The Treasurer visited Port Moresby early in the life of the new PNG Government and both he and Prime Minister Howard have offered assurances to Prime Minister Morauta of Australias commitment to support his Governments reform efforts.
The Treasurer met with both IMF Managing Director, Michel Camdessus, and World Bank President, James Wolfensohn, in Washington in late September to underline the importance Australia attaches to PNGs re-engagement with the IMF and the World Bank.
Todays announcement of a financial support facility is designed to support PNG's efforts to secure agreement with the IMF and the World Bank on programs which will provide additional and on-going support for the PNG Governments economic and governance reform agenda.