EXCHANGE OF LETTERS CONSTITUTING AN AGREEMENT TO AMEND THE TREATY ON DEVELOPMENT CO-OPERATION BETWEEN THE GOVERNMENT OF AUSTRALIA AND THE GOVERNMENT OF PAPUA NEW GUINEA, AND EXCHANGE OF LETTERS, OF 24 MAY 1989 

[Development Co-operation, EOL]

(Waigani-Canberra, 18 March-29 May 1992)

ENTRY INTO FORCE: 29 MAY 1992

[Letter from the Minister for Foreign Affairs of Papua New Guinea to the Australian Minister for Foreign Affairs and Trade]
I
Minister for Foreign Affairs
Central Government Offices
Waigani
PNG
18 March 1992
Honourable Gareth Evans
Minister for Foreign Affairs and Trade
CANBERRA ACT AUSTRALIA
Dear Gareth
It is with pleasure that I write to re-affirm the Papua New Guinea Government's decision referred to at the recent Papua New Guinea/Australia Ministerial Forum talks in Madang to allow for a marginal shift from budget support to project tied aid under the current Development Cooperation Treaty.
Our Minister for Finance and Planning, Hon. Paul Pora's letter of 3 February 1992 to your Minister for Trade and Overseas Development, Hon. John Kerin, also refers. 
The specific endorsements of the Papua New Guinea Government are as follows: 
(a) use of A$5.5 million of the Balance of Payments Support Grant for general budgetary purposes and transfer of A$5.5 million from Budget Support to Project Aid in Australia's fiscal year 1991-92; 
(b) increase in project aid by A$16 million (from A$30 million to A$46 million) in 1992-93 with a corresponding reduction in budget support; 
(c) increase in project aid by A$11 million (from A$35 million to A$46 million) in 1993-94 with a corresponding reduction in budget support; 
(d) further review of the project programme for 1993-94 by officials with a view to achieving an increase in the project programmes for that year, thus facilitating a steady build-up of project aid. 
Our Government has also noted that no provision has been made in 1992-93 for any projects which might arise from our Security Review. Whilst we recognise scope for including such projects in the 1993-94 programmes, at this stage we do not wish to commit ourselves to a source of funding for such projects. 
I am now writing to you officially to confirm the above understandings. 
Pursuant to the relevant articles of the Treaty on Development Co-operation between Australia and Papua New Guinea and the Exchange of Letters between the Prime Ministers of Papua New Guinea and Australia of 24 May 1989, I wish to propose the following amendments: 
The table at paragraph (a) of the Exchange of Letters shall be replaced by the following: 
Year Budget Support Jointly Programmed Aid 
1989/90 275 20 
1990/91 275 25 
1991/92 269.5 35.5 
1992/93 259 46 
1993/94 249 46 
The table at paragraph (b) of the Exchange of Letters shall be replaced by the following: 
Year Budget Support 
1 July-31 December 1989 137.5 
1990 275 
1991 275 
1992 261.5 
1993 254 
1 January-30 June 1994 124.5 
To enable the shift in Australian budget support proposed above, I further propose that Article 4.5 of the Treaty shall not apply to the payment of budget support for the year 1991/92. 
I further propose that if the foregoing is acceptable to the Government of Australia, this letter and your letter in reply shall together constitute an agreement between our two Governments to amend the Treaty and Exchange of Letters and shall enter into force on the date of your letter in reply.[2] 
Yours sincerely 
Regards 
[Signed:] 
(MICHAEL T SOMARE)
MINISTER FOR FOREIGN AFFAIRS
[Letter from the Australian Minister for Foreign Affairs and Trade to the Minister for Foreign Affairs of Papua New Guinea] 
II
Minister for Foreign Affairs and Trade
Parliament House
CANBERRA ACT 2600 
29 May 1992 
The Rt Hon Sir Michael T Somare
Minister for Foreign Affairs of Papua New Guinea
Port Moresby
PAPUA NEW GUINEA

Dear Minister 
I have the honour to refer to your letter, dated 18 March 1992, the text of which reads as follows: 
[Here follows the text as printed under I.]
I have further the honour to confirm that the foregoing is acceptable to the Government of Australia and that your letter and this letter shall together constitute an agreement between our two Governments to amend the Treaty and Exchange of Letters, which shall enter into force on the date of this reply.
Yours sincerely
[Signed:]
(GARETH EVANS)
MINISTER FOR FOREIGN AFFAIRS AND TRADE
______________________________________________________________
[2] The Agreement entered into force 29 May 1992.