The federal government needs to assist our major banks re-engage with PNG

The Prime Minister is due to visit Papua New Guinea next week. He will have a full agenda for a short visit.

However, there is one issue I hope he gets a thorough briefing on before he makes the trip.

In recent years the involvement of Australia's major banks in PNG has sadly diminished.

I don't blame Westpac or ANZ for that. Doing business in PNG is not easy. It is especially difficult for our banks given the dominant position the Bank of South Pacific enjoys in PNG, and BSP has the national government as a shareholder, and almost all government and GOC business is transacted via BSP.

Sadly the Morrison Government did nothing to encourage our banks to remain fully active in PNG. Today both Westpac and ANZ have a limited presence.

At a time when the Albanese Government wants to increase our engagement in PNG and across the South Pacific, the decline in our banking//finance house presence is a serious obstacle to greater business investment.

The Prime Minister might well ask his officials if there is any way the government might help encourage our banks to re-engage.

Without government help that won't happen.

The PM might consult the banks on what reasonably might be done to assist them do so.

There are an increasing number of PNG businesspeople interested in doing business in Australia- and entering joint ventures with Australian businesses. That needs to be encouraged.

The absence of a substantial Australian bank presence in PNG is most certainly an obstacle to that.

But there is another factor that deserves urgent consideration.

China has been showing an interest in the PNG banking and finance sectors. So far, the presence has been relatively minor.

Last week Prime Minister Marape issued a long statement urging the Bank of China to establish a substantial presence in PNG - including retail banking.

I suspect China won't need much encouragement to do so!

That won't be in the Australian national strategic interest.

The cost to the government of providing some encouragement should not be great.

But I believe it is necessary.

At the same time the government could well look at the status of our banks in important regional neighbours such as Fiji.

I believe engagement with our private sector, neglected by the former coalition government, ought to be a priority. Banking and finance services should form part of that strategy.

We cannot stop China getting more involved in banking and finance in PNG but competition is vital.

Australia remains the largest private sector investor in PNG.

It needs to remain so.

The visit by PM Albanese is welcome. He will be warmly received.

But its impact needs to be more substantial than usual!

A look at how we can raise our profile in the key banking and finance sectors merits at the very least consideration.

Marape does not like the dominant position of one bank, even though it is locally owned.

I sense he is frustrated at the reduced Australian banking presence. He would welcome that changing - but he is a deft card player so if Australia won't he has no problem with China.

The Australian national interest demands the issue be seriously examined.

The PM's visit provides a good opportunity to begin that process.