Can our budget help PNG in its crisis?

It came as little surprise that the IMF has prescribed some tough medicine for Papua New Guinea.

The IMF has been very patient when it comes to economic and fiscal reform. The day of reckoning was inevitable though.

The toughest condition of the IMF's K3 billion loan to PNG is devaluation. Successive governments have long put that off.

The main consequence of a devaluation would be dearer imports. That would erode already low living standards.

Another is that taxes must be raised. That would be tough on business and a disincentive to investors.

Jim Chalmers is in the US meeting top officials, including the world bank and the IMF.

He might seek a briefing on the challenges PNG faces.

It will contain grim news. A weak economy, falling employment and ongoing forex problems.

The Foreign Minister is reviewing our aid program with PNG being the largest recipient.

I doubt there will be major changes in the federal budget in under four weeks. Reform will take time.

What the 2023-24 Budget should do is scale back the dozens of projects we fund with few questions asked about effectiveness or relevance.

The priorities in the $500 plus aid funding should be encouraging agriculture, helping resource the under-funded police force and implementing the defence force upgrade program.

There should be some extra funding for our NGO sector working in PNG, including my charity of choice YWAM.

YWAM has not had its modest funding from Australia increased for some years. It has expanded its work with dental trucks that go inland. That should be supported.

The other issue the budget needs to look at is how do we help protect Daru and Ihu-Kikori from effective Chinese takeover. They are on our border. Our national interest is at risk.

Part of what we should do, especially on Daru, is encourage fishing by local people, and don't let the Chinese dominate it, as there is evidence they are doing.

The other challenge we must address is border surveillance.

We must help the PNG Police Commissioner stop PNG being a transit point for drugs from Asia to Australia and New Zealand.

As I wrote recently my friend Jimmy Maladina represents the eastern most electorate on the PNG mainland. For his vast electorate of dozens of islands, he has just ONE policeman.

We should help Commissioner Manning boost police numbers and capacity.

Drugs can transit via yachts and ships as well as aircraft. We need to boost our border surveillance and help PNG play a greater role in doing so.

We must focus on the Papuan coastal provinces. China will donso....but so will drug runners!

I hope Penny Wong will undertake consultation across the Pacific in time. Wide-ranging reform is needed, but it needs to be done in a careful and consultative way with our neighbours.

We should not expect too much change in this budget. The government has done well.....but the hard yards are ahead!

Planning for the hard yards will vary from country to country. PNG is our biggest aid beneficiary, but it is not the only one.

We give more in aid than anyone else, we must maintain that but plan for longer term reform!