PORT MORESBY – Australian aid money to Papua New Guinea is being wasted on “middlemen”, such as lawyers and consultants, PNG prime minister Peter O’Neill has stated.

In a press release, O’Neill said PNG wanted to ensure that financial support develops real long-term capacity and skills, and not just temporary relief.

“As a developing country we don’t want handouts, we don’t want Australian taxpayer money wasted and we don’t want boomerang aid,” he said.

“Papua New Guinea is changing, we are growing and as a nation of eight million people we want to move beyond handouts and work with our partners to strengthen capacity.”

The prime minister also said there needs to be a better deal for the taxpayers of contributing countries like Australia, saying that one of the biggest obstacles to effective support were middlemen who take commissions on aid expenditure.

“Development assistance has become a billion dollar ‘industry’ where so much of the goodwill ends up in the pockets of middlemen and expensive consultants,” O’Neill said.

“I wonder if the people of Australia realise how much of the money they give to help Papua New Guinea and other countries is actually paid to middlemen and lawyers.”

O’Neill’s allegations of wasted funds have also been supported by rights groups and independent trade monitors in recent months.

On Monday, Foreign Minister Julie Bishop told the ABC the two countries regularly discuss how to achieve the most effective development outcomes for PNG with Australia’s support.

Aid Watch director Thulsi Narayanasamy recently stressed that aid focusing on tackling corruption may in fact be “benefitting” from ongoing corruption in PNG.

“Australia has done nothing to bring these companies to account despite them being Australian,” he said.

“We would see that as Australia benefitting off the corruption in PNG.”

In the statement, O’Neill stressed that he believes better arrangements were possible and was seeking to implement them.

The prime minster added that PNG would review its current support arrangements, and determine how money and capacity building can be implemented more efficiently.

O’Neill suggested funding positions for PNG citizens to occupy in government to be a better alternative than simply sending foreign advisers to fill the positions themselves.

“The current support delivery sees foreigners occupying positions where they are actually doing the work that should be done by Papua New Guineans,” he said.

“This is not good for Papua New Guinea or the donor country as when they end their contracts they do not leave behind capacity or skills.”

O’Neill believes such changes would allow PNG to move away from needing assistance in the long term.

Stephen Howes, the director of ANU’s development policy centre, who has advocated for better aid implementation in PNG, supported the idea of relieving the dependence on advisers in a recent parliament enquiry submission.

“The advisory approach needs to be dethroned,” he wrote.

“Aid-funded personnel should be given concrete tasks and work alongside, not advise. The word ‘adviser’ should be dropped from the aid programme lexicon.”

Professor Stephen Howes from the Development Policy Centre at the Australian National University said O’Neill’s proposal had merit.

“Ultimately, you can’t get as much out of an expat if they’re an adviser as you can if they’re in an in-line position. And they are very expensive to hire so you want to get the most out that you can,” Dr Howes said.

O’Neill said as part of the review, the current policing partnership with Australia would be reviewed to make it more effective for both countries.

“We have had a policing partnership programme in place for a couple of years now and I think all parties agree, the benefits are limited due to restrictions placed on the Australian police,” he said.

O’Neill believes that PNG would be better off if Australian police officers worked for and assisted local police, rather than doing the job themselves, as bureaucracy hinders their ability to enforce law.

“We would like to recruit foreign police into line positions within the Royal Papua New Guinea Constabulary so they can lead by example to pass on their knowledge and skills,” he said.

“We have Australian police officers who are committed to strengthening law enforcement in our country, but they are frustrated by the bureaucracy that means they cannot do hands-on policing,” he said.

“I cannot imagine being a police officer who is told that if they see a crime being committed he or she has to stand back and watch.”

O’Neill believes the changes in development support policy will deliver better outcomes for all countries involved.