Australia to splash cash in the Pacific

Prime Minister Scott Morrison will pledge A$3 billion (NZ$3.2b) towards much-needed infrastructure in Pacific nations as part of a frank admission Australia has sometimes taken its neighbours for granted and amid concerns that China is building its influence on Australia’s doorstep.

In what he badges a ‘‘step-up to the Pacific’’, Mr Morrison was to also announce yesterday the establishment of an Australian Defence Force mobile training team that can travel to Pacific nations to help them with skills including infantry fighting, peacekeeping and disaster response.

The announcements in a speech to soldiers in Townsville will be widely read as aiming to edge out growing Chinese infrastructure-building in Pacific nations and will come shortly after Foreign Minister Marise Payne arrives in Beijing for talks that signal a thaw in the year-long diplomatic frostiness between the two countries.

‘‘Australia has an abiding interest in a south-west Pacific that is secure strategically, stable economically and sovereign politically,’’ Morrison says, according to speech notes provided by his office.

Raising questions about sovereignty have in the past been a way for Western leaders to express concern that China is loading developing countries up with infrastructure-related debt they cannot handle, making them politically beholden to Beijing, though Morrison stresses Australia will co-operate with other countries including China.

In surprisingly blunt remarks, Morrison says Australia has in the past taken the Pacific for granted.

‘‘While we have natural advantages in terms of history, proximity and shared values, Australia cannot take its influence in the south-west Pacific for granted, and too often we have,’’ he says.

He says the Pacific is estimated to need $US3.1 billion (NZ$4.5b) a year in investment through to 2030.

He will announce the creation of an Australian Infrastructure Financing Facility, which will make available A$2 billion for grants and long-terms loans to support infrastructure in the Pacific and Timor Leste, prioritising telecommunications, energy, transport and water projects.

Morrison says this money will ‘‘stretch our aid dollars further’’. But he does not say whether any of the money will come from within the existing aid budget or from budget savings elsewhere.

He will also commit an extra A$1 billion to Australia’s export credit agency – called Efic – which helps Australian companies invest and expand overseas by giving them loans and guarantees. – Fairfax