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Werner, Good to hear that the tutorial at UPNG was of some insight. Some of the issues raised here goes to the heart of the doctrine of separation of powers in PNG.

Thanks Stephen for leading the Centre’s vital work in analyzing Australian aid. The Budget Forum was excellent. The key takeout for me is the need to make aid volume the almost exclusive focus of future work by those interested in aid and Australia’s role in the global community. Collectively, we failed in this budget. Even with a substantially new Cabinet, we failed to convince the government to stop the planned additional slashing of aid. Over the last four years, a 30% aid cut in real terms, in the context of 10% real increases elsewhere, is reprehensible. A challenge is how to balance energies and analysis between the overall aid volume story relative to other details on the sectoral allocation, or the geographic allocation, or the partnership allocations etc. For example, yesterday’s blog focused on the cuts in health and education relative to governance. The figures are a bit tricky (see below). But essentially, the percentage fall in education and health is almost exactly proportional to the cuts in health and education. They have pretty much kept their shares of the program at 19% and 14%. They have been cut by around 30% - but the overall aid program has been cut by 30%. Slamming the cuts in health and education is appropriate, but it is almost entirely related to the cuts in the overall volume of aid. Of course there are more detailed choices about how to cut up the shrunken pie, but the key issue is that the pie has shrunken. For those that supported cuts in aid, they would probably be happy if future aid lobbying efforts spent too much time talking about the details of the shrunken allocations rather that the big picture issue of the overall slashing in aid volume. Getting these balances right, essentially a choice on priorities, will be an important factor in rebuilding a development cooperation program. Sectoral details (warning – a bit boring and technical: the key messages are above). There are major challenges with attempting multi-year sectoral comparisons of Australian aid. First, the figures in the new “orange book” do not add up. Taking the sectoral allocations set out as percentages of the overall aid budget of $3,828m and multiplying by the relevant percentages from Figure 1 on page 2 does not come up with the figure shown in the detailed sectoral section of the orange book -from pages 41 to 51. For example, the health sector expenditure estimate is shown as $473.3m on p46. However, Figure 1 indicates the health sector is 13.0% of the 2016-17budget – which is $497.6m. Indeed, about $180m appears to be missing from the base – and this affects all the sectoral allocation estimates. Second, we do not yet know the 2015-16 sectoral outcomes. The best source of information is the percentage estimates from MYEFO documents in February. Staying on the health sector, this implied estimated expenditure of $579.4m. However, we do not know what the actual expenditure was as yet (this sectoral detail was not updated in the orange book, although it did update many other key estimates). Third, the impact of multiyear expenditure timing is very uncertain. For example, once again on the health program, the contributions to “Global Health Programs” are shown as dropping from the MYEFO estimate of $136.6m to only $56.1m in 2016-17 - a reduction of $80.5m. These are explained as not being cuts – simply changes in the timing of multi-year commitments which would still be met. So in other words, the apparent cut in the health sector in the 2016-17 budget is either entirely explained by this re-timing of Global Health Program payments using the p46 health figure ($80.5m of an apparent cut of $81.8m) or 75% of the apparent cut using Figure 1 percentages ($80.5m of an apparent cut of $106.1m). To make this more complicated, and related to the second point, the updated expenditure item for the Global Health Programs is now $181.1m in 2015-16, not $136.6m. It seems that $44.5m was paid early. This means the actual cut in health sector expenditure in 2015-16 is likely to be less than expected. However, with the new base, it also means that the apparent health cuts in 2016-17 will be much larger. All because of the timing of a payment that does not reflect changes in policy intent. Fourth, there are inevitable grey areas in how a project is classified. For example, the excellent support that ANU provides to the University of Papua New Guinea is classified as “governance” sector. The support for the University of the South Pacific is classified as “education sector”. And of course, there are very important linkages between sectors to get real sustainable development so drawing the lines can be somewhat artificial. Fifth, the definitions of sectors changed significantly between 2012-13 and 2013-2014 – so it is difficult to make comparisons at this stage prior to 2013-14 (OECD DAC definitions will provide a consistent sectoral comparison but these won’t be updated for this year’s budget for some time). Sixth, the figures in that base year of 2013-14 are affected by a charging of some $300 million in refugee costs to the humanitarian (or “resilience”) sector. If this is included, it makes it appear that humanitarian aid has taken very large cuts when most of the change is simply not including these costs any more. Treatment of these refugee payments also affects the estimate for the size of overall aid program cuts as well as the starting percentages for all other sectors. Seventh, the largest cuts in the share of the program have come from the “general development support” category (from 13.3% of the program in 2013-14 to 6.8% estimated in 2016-17). It is not clear what this is – so it’s hard to assess the impact of the proportionate cuts relative to the proportionate winners of infrastructure and trade (the biggest sectoral winner since 2013-14), “governance” (which shows a cut in 2016-17 of between $17.1m or $56.2m depending on the issues above) and “Agriculture, fisheries and water”. Paul

Hi Jess, thank you for a raising a very important question about the process of constitutional change. Sections 13-15 of the Constitution set out the process. It authorizes the Parliament to make amendments after a two months notice (first reading). This is obviously different to Australia given its process of referendum. The drafters of the PNG Constitution assumed that PNG political leaders would act responsibly when it comes to constitutional amendments. But it appears to be a challenge. So far, PNG has made forty-three amendments over the last forty years of Independence – a high rate compared to many democracies. So your point is vital i.e. the process of constitutional amendment will have to be looked at. With the current arrangement, the court have found over the years that parliamentary standing orders and opportunity for critical debate are often suppressed due to a majority government and a Speaker that often sides with the government (the Speaker is appointed by the government). Apparent abuses in parliament are non-justiciable but the Courts have take judicial notice of it through Hansard evidence, media etc. The courts in PNG are required to be ‘open, liberal’ and to be politically conscious. They are not to be removed from political realities, but to look beyond the letter of the law to see the politics behind it. For them, a dominant executive against a declining legislature is a cause for concern. Those concerns are taken into account when dealing with issues of constitutionality of amendments and legislation. So Courts in PNG do take an interest to do justice, and not to allow mere processes and procedure get in the way. Some may accuse them of making political decisions but in essence, these are issues of justice coated in politics so courts will have to take a direct interest when brought to its attention.

Neat idea. Couple of questions: 1. What are some of the services that you see being traded on the platform? I can't see the cobblers, key-cutters and seamstresses occupying every corner of Asia's metropolises being able to benefit because their market is saturated with competitors. Client's don't have any trouble finding these services because providers are everywhere, and getting on the web-platform won't result in lower costs for them because competition has already driven the price of the local service provider down to the market clearing level. Where is the incentive for the client? Do you see this functioning more like Alibaba? That is, linking up small businesses (like maybe 3 women making clothes out of someone's house) to larger clients in a kind of subcontracting network? How would you make that straightforward on the interface? 2. How good a mobile phone does someone need to make use of the service? Smart phone costs are coming down, but even $40USD is pretty steep for a lot of the people you are trying to reach, who often don't even have access to electricity to charge a phone. The services that have been effective for such people in the past, like SWIFT, can be accessed through $2 phones. 3. What do see the interface looking like? Does a potential customer search and find listings with associated postage fees like on ebay or alibaba? Is there some geographic sensitivity beyond postage fees so that people are connected to local suppliers? Do you see any difficulties using the platform to connect buyers and sellers of discreet goods vs buyers and sellers of contracts for a bundle of pieces? Do sellers just list their product and then twiddle their thumbs? Can they list a general service or do they need to have a list of goods? 4. Do you foresee the people you are trying to reach being tech- and business-savvy enough to use your platform without some kind of training program? My understanding is that similar operations connecting say, handicrafts workers or weavers of traditional garments to foreign markets typically utilise middle men to get people onto the platform, ensure they are making things to specification, ensure they have the requisite electronic accounts for fund transfers etc. Do you think these things will be problematic for your platform? Do you need to engage with any of this stuff for the purposes of the prize or does all of this come after you win the money?

Its a pity health and education must be subjected to a reduced budget not only from the Australian AIDE but also internally where the PNG Government had decided to cut K 50 million from the churches medical sector in 2016. This is despite PNG's global standing on maternal mortality at 6th worst in the world. An established system of 24 hours lighting system in labor ward delivery rooms across the country would make so much a difference in the periods between child birth and perinatal period in the following 6 weeks. Solar energy for example, is an increasingly favored technology that is reliable, affordable, constant and user friendly that is geographically fragmented by deep gorges, high mountains, fast flowing rivers and yet the PNG Government has completely ignored basic strategies to improve health and community standard of indigenous communities. From a layman's perception, while we appreciate Australian AIDE to improve governance in PNG, it would be of interest to genuine PNG citizens that Australian AIDE as well as from other donor countries are temporarily swayed to allow the PNG government to clean up its attitude rather than continually play the 'naughty child's' mentality through receiving from both the right and the left hand and still isn't satisfied while others are kept patiently standing in line awaiting a share they too must benefit from the Australian tax payers. Papua New Guinea citizens must genuinely earn from sweat and tears toiling the land than sitting around waiting for free hand outs, nothing falls freely from the sky since the time of Mana.

One thing is certain, one would have thought that refugees in the asylum agenda would be of the 'tarangu' group; torn, broken hearted, humiliated and dis-spirited. I have witnessed on two (2) separate occasions the asylum seekers on my island as being people walking around with wallets full of money and a free joy ride on the island!! So who is the 'tarangu' here, the foreigner or my own lay back peaceful island people who have suddently become subjected to heavily inflated goods and services? Secondly, in my recent visit in April to Manus, i noticed one fact the Australian government can not ignore. The unnecessary expenditure on fuel alone! Empty 25 sitter buses, loading trucks, police van and the lot who keep driving up and down bumper to bumper to and from Lombrum - Lorengau with absolutely no coordination. This is certainly cause for concern when it comes to unnecessary fuel burning in a confined area. Now either the funding authority is ignorant, the middle man too clever or both! The supreme court decision came exactly 2 weeks following my open assumption and illustrating to my local people that the fuel costs on Manus island alone would determine stiff decisions on the future of asylum seeking on the island, seems I wasn't wrong by a big margin. Even if this was ignored by both the PNG and Australian governments, a simple tax payer in Australia would raise some concern. Gerard

The interplay of politics either it was correctly done or just an injudicious arrangement between Australian and PNG to process the asylum seekers in Manus Island has a lot to be decided within the two countries. The big winners are the legal consultants who worked in framing the arrangements to reach the MOA, walking away with huge bucks. They should have also provided the counterproductive legal opinions of such arrangement (maybe it was done) relating to the national and international laws on human rights. Few observations here as far as regional politics and security of the Pacific region is concerned. • Australia is seen as big brother among the small Pacific Island nations as well as the south east Asian neighbour countries. In the event of situation that concerns regional politics and security, Australian has to play bigger and better within the confines of national sovereignties and territorial integrities. Also with respect to international laws and commitments. • Even the small island countries needs to open up to the influences of regional politics and security with respect to their national foundation, commitment to regional and international aspects and minimise as much as possible territorial and sovereignty backlash that will affect others in a Pacific global village. • Issues that concern regional politics or security like the recent case for asylum seekers that Australia is addressing through Nauru and PNG, it should better be debated and addressed through regional groups like the MSG, PIF or create a new one purposely for such issue, including countries in south east Asia like Indonesia and Malaysia will serve a lot. The UNHCR would be happy to support such approach.

Thanks, Ashlee, for drawing attention to Robin Davies' important, timely and creative proposal. I urge anyone interested in humanitarian assistance, and particularly those preparing for the Istanbul meeting, to consider Robin's op-ed and policy brief carefully. The case for creating a global humanitarian fund (GHF), of the type Robin proposes, is compelling for several reasons: the quantum of current humanitarian assistance is clearly inadequate compared with the needs (on any reasonable basis), and is likely to remain so; distribution of humanitarian assistance globally is far from equitable, given the political considerations which largely drive governments' decisions on these matters; delivery of assistance to those who need it is very expensive, fragmented and uncertain; and the jumble of institutions vying for a piece of the humanitarian pie screams out for consolidation and rationalisation. Robin's GHF won't solve all of these problems at a stroke, but it could bring some much-needed rigour and direction to future humanitarian assistance, and give it a stronger place in international relations and co-operation - in much the same way that IDA did for development assistance back in the 1960s. I have three comments on Robin's proposal, none of them deadly. Robin rightly posits that a global target of some kind is needed to get a multi-year GHF going. Estimating global humanitarian assistance is very hard - some would say impossible - and yet we know from the trends that it is simply not enough, and by a large and growing margin, to meet the needs caused by natural disasters and complex/protracted emergencies. Robin makes a pitch for a relatively modest target based on shortfalls in the UN's appeals processes, but this is shaky ground: the UN appeals are themselves inflated to reflect the known shortfalls in responses. A second point is that injecting more money into the (so-called) humanitarian system via a GHF would not fix the many significant inefficiencies (leakages) in that system. While that's true up to a point, a cleverly designed GHF along the lines Robin proposes would see resources shift over time to relatively more efficient delivery channels and this would have salutary reform effects on the others, or their relative importance would decline. The proposal wisely leaves to one side big "environmental" problems besetting humanitarian assistance: the UN appeals processes; Security Council decisions; OCHA's role, status and funding; people displacement and international movement; the fragmentation of humanitarian assistance. A GHF cannot solve these problems, but its own performance will be affected by them. No doubt much of the meeting in Istanbul will be taken up by these big issues. Meanwhile, a circuit-breaker such as Robin's GHF might at least break the current mould of sterile discussion, and create a dynamic with some positive side effects on these bigger issues. Any government with a serious interest in improving humanitarian responses and outcomes at the global level is likely to give the proposal a good hearing, and some might even be brave enough to support it.

Viva, PNG Constitution... My thought on this is that while the world descends into one world diplomacy due to the gradual rise of regionalism (among other factors), state's sovereignty is becoming a myth in international politics. Territorial sovereignty (one of the elements of state as a political being) can never be debated nor defend a state. It will be and always be the Constitution. The approach taken to amend our Constitution without care and consideration is a grave concern. The Constitution-makers have taken years to put together the Constitution but today it has taken months (two at the most) to make amendments and put new laws. I am counting on more lawyers turn MPs in 2017.

Indeed! I can just picture the awkward tour of the refurbished runway by the NZ Foreign Minister when he touches down. Thanks for the added information.

Bal, Could it be argued that it is not a case of the executive, nor indeed the judiciary, being too strong, but of provisions surrounding constitutional change being not strong or clear enough? In the above scenario, we have a government who has made a constitutional change which was valid according to the procedural elements of the PNG legal system. It would seem more appropriate to revise the procedures for constitutional change, rather than ask the SC to make a (unavoidably political) decision about whether despite procedural coherence, the change was unacceptable on other less concrete grounds.

Tess, thank'you for bringing some insights to this topic so readers can see and judge for themselves. It is important that we look at the progress the Vanuatu government has made in such a short span of time on this very pressing issue. I still think that Air-NZ has acted in an inappropriate way in its dealing with the Vanuatu govt. Credits should be given to the current government for the speedy recovery plan put ahead and as you clearly said, they are now in talks with the WB for a long term planning that will allow in the future larger aircraft to land. We are brothers and sisters, we are Pacific Islanders linked by one mighty Ocean, and we should not treat ourselves in such a way that we are hiding our "little dirty secrets" from each other. If Air-NZ thinks according to their financial analysis that AKL-VLI Route is no longer profitable, then the least they can do is announce the real reason behind this but in no way using the runway saga as their scapegoat. The prove is they want to fly in a charter. Bullying tactics has never taken anyone anywhere.