This Statement relates to the Loan Agreement between the Commonwealth of Australia and the Independent State of Papua New Guinea (PNG) for A$750 million, signed on 15 December 2022.
This loan is provided in response to a request from PNG Treasurer, Ian Ling‑Stuckey, to provide support to PNG to meet its 2022 Budget financing shortfall, and support the delivery of reform actions under multilateral development programs, including a new International Monetary Fund (IMF) program expected to be established in 2023, the Asian Development Bank State Owned Enterprise Reform Program and the World Bank Development Policy Operation.
Background and History
PNG’s economic outlook forecasts greater stability following the pandemic. The PNG economy is projected to grow between 4 and 5 per cent. However, many challenges remain from low COVID‑19 vaccination rates, rising inflation and a slowing global economy. In 2021, Australia provided a bilateral loan to support PNG’s 2021 Budget help it respond to the ongoing health and economic impact of the COVID‑19 pandemic, and continue progress on economic reforms under the second International Monetary Fund Staff‑Monitored Program.
Australia and PNG are sovereign partners who share unique and enduring connections underpinned by a special bilateral relationship including the Comprehensive Strategic and Economic Partnership. It is in Australia’s interests to have an economically stable partner with sustainable fiscal management.
Further information on Australia’s partnership with Papua New Guinea can be found on the Department of Foreign Affairs and Trade website.
This Statement is being tabled pursuant to the requirements of sections 8D‑8E of the International Monetary Agreements Act 1947 (IMA Act). Under the IMA Act, the Treasurer is required to release and table in the Parliament a statement that describes the nature and terms of an agreement entered into by Australia to provide financial assistance to another country, and that details why such an agreement is in Australia's national interest.