12 Jul 2010

Minister assures that PNG will control its sovereign wealth funds

4:00 pm on 12 July 2010

The Papua New Guinea Minister for Public Enterprises, Arthur Somare, has clarified how Australian technical assistance will be used regarding money earned in the liquidified natural gas project.

The LNG project is expected to have a huge impact on the PNG economy and Canberra has indicated it'll provide technical and advisory support as the country establishes sovereign wealth funds.

But there has been criticism in PNG that Australia will end up managing the expected large inflows of revenue and that Papua New Guineans are not trusted to do the job.

Mr Somare says this is not the case.

He says it was clear at the recent Ministerial discussions on LNG in Melbourne that PNG was seeking assistance for the framing of legislation regarding the establishment of the wealth funds.

Mr Somare says billions of kina will flow into the government coffers after 2014 and the government is keen to put the legislative and governance framework for the management of these funds in place.

He says PNG could have sought assistance on sovereign wealth funds from countries such as Norway and Singapore but chose Australia in view of the strong bilateral aid arrangements and Australia's experience with such funds.