Is development aid still serving the Australian national interest?

Australia is the most generous provider of development assistance - aid - in our region. The recent federal budget increased aid to PNG and our island neighbours.

As far as I can ascertain none of our neighbours thanked us for our increased assistance. It seems to be taken for granted.

On the other hand China has significantly cut aid to the region. The only exceptions are the Solomon Islands and Kiribati - both being closely aligned with China.

Not one country has complained about this significant change.

China no longer uses aid to win friends. It does it through trade and secret investment deals. That makes it more influential than ever.

China continues to tie countries like to PNG to loans they can't raise on their own, let alone repay.

As secret deals with Sri Lanka and Kenya have confirmed, if a country or SOE default on loan repayments it takes control of the asset.

The China experience is working. It's presence in PNG is rising, but with limited negative coverage.

The latest example occurred only this week. Australia, Japan, New Zealand and the United States in the aftermath of APEC 2018 in PNG committed to helping fund "powering PNG" to counter China's influence, including in the electricity sector.

Most PNG cities are experiencing frequent power blackouts. The industrial city of Lae is no exception.

This week, out of the blue, the PNG Government chose two Chinese firms to repair the problem in Lae.

No mention of our contribution nationwide. Accompanying the announcement was a less than subtle commitment to the Ramu 2 hydro power scheme, which will deliver some of the dearest power in the world, and a suggestion that the scheme can power the Wafi mine. Just what Newcrest make of that is not hard to guess!