26 Aug 2003

PNG government under pressure to keep Australian aid

10:45 am on 26 August 2003

The Papua New Guinea government debate over aid money is expected to put increasing pressure on next year's budget.

The largest aid donor, Australia, has called for a review of its nearly 200 million US dollar allocation to PNG.

Our PNG Correspondent Peter Niesi says aid is a key lifeline to the nation, but receiving aid means there is the perogative to set conditions.

He says analysts are concerned about the way those conditions are being expressed, and it is a real love hate relationship with aid money.

"The Papua New Guinea government has basically reacted and said hey stop talking about it, go ahead and do it and if you need to cut it do it, instead of keep you know referring to it over and over again. It's being seen as a carrot and stick situation."

Peter Niesi says there's been no word still on the promised Asian Development Bank funding boost for the government budget from the finance minister Bart Philemon.