Loans and grants for infrastructure plus export financing and security funding aim to hold out Chinese soft power offensive

This article is more than 1 year old

This article is more than 1 year old

Scott Morrison will unveil a $2bn infrastructure financing facility for the Pacific as part of new measures designed to project Australia as the region’s principal security and development partner at a time of rising Chinese influence.

Morrison will use a speech delivered at the Lavarack Barracks at Townsville on Thursday to flag the new program of loans and grants for infrastructure development in Pacific countries and Timor Leste, and the prime minister is also expected to commit an extra $1bn for Efic, Australia’s export financing agency.

The injection of funding for Efic is intended for what Morrison characterises as “a new more flexible infrastructure financing power to support investments in the region which have a broad national benefit for Australia”.

The new infrastructure financing facility will prioritise investments in essential infrastructure like telecommunications, energy, transport, water, and Morrison will say the program “will stretch our aid dollars further”.

The speech provides no details about how the new measures will be funded.

As well as the proposed infrastructure rollout, which follows Morrison’s decision this week to rebuke the Victorian government for signing up to China’s Belt and Road initiative, Thursday’s speech will flag soft power initiatives, like getting more Australian content on Pacific television, and opening diplomatic missions in Palau, the Marshall Islands, French Polynesia, Niue and the Cook Islands.

It will also propose security commitments, like a Australian defence force mobile training team for the Pacific, more navy deployments, annual meetings between defence, police and border security comanders, and creating a Pacific faculty at the Australian Institute of Police Management.

Thursday’s commitments come ahead of Morrison’s participation in his first summit season as prime minister. He will attend the East Asia Summit and the Apec summit in Papua New Guinea next week.

Ahead of Apec, Morrison and his PNG counterpart, Peter O’Neill, signed off on a joint naval base to be located on Manus Island. The joint facility, agreed last week, crowds out an aspiration by Beijing to develop the port. The cost of the project is not yet clear.

Australia has been executing a strategic pivot to the Pacific both under Malcolm Turnbull and Morrison to try and hold out a soft power offensive by China in the region, executed predominately through loans and infrastructure projects delivered to the island nations.

China’s expansion in the region has coincided with the Coalition’s decision to cut Australia’s foreign aid budget, which foreign policy experts say has worked against Australia’s interests in the Pacific particularly in a time of uncertainty about America’s ongoing commitment to the region.

Australia stepped in recently to fund a new underwater internet cable for the Solomon Islands to lock the Chinese telecommunications company Huawei out of any deal, and the new fund will give the government firepower to counter similar overtures from Beijing.

Morrison is expected to say on Thursday that Australia’s national security and that of the Pacific are intertwined, and it is time to pursue a new chapter in regional relations.

“My government is returning the Pacific to where it should be – front and centre of Australia’s strategic outlook, foreign policy and personal connections, including at the highest levels of government.”

“This is our patch. This is where we have special responsibilities. We always have, and always will. We have their back, they have ours. We are more than partners by choice. We are connected as members of a Pacific family.”

The prime minister has been campaigning in marginal seats in Queensland this week, and he will characterise the state critical to the Coalition’s election fortunes as “our gateway to the Pacific”.

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According to extracts of his speech, Morrison will say he wanted to outline the Pacific reboot at the Lavarack Barracks in the marginal Labor-held seat of Herbert, because servicemen and women were charged with putting the plan into action.

“Australia has an abiding interest in a southwest Pacific that is secure strategically, stable economically and sovereign politically,” he will say. “This is not just our region, or our neighbourhood. It’s our home.

“It’s where Australia can make the biggest difference in world affairs. A strong, stable region keeps all of us more secure and enables our economies to grow.”

Morrison will say while Australia has natural advantages as a security and development partner because of history, proximity and shared values, Australia cannot take its influence in the southwest Pacific for granted, “and too often we have”.