Canberra, 7 May 1969
Bougainville copper project
Detailed projections of Administration receipts, prepared by Economic Policy Branch, are attached.2
2. On these assumptions the Commonwealth grant would drop below 50% of total budget receipts (or expenditure) by 1973/4 and below 33⅓% by 1980/1. Put another way, local revenue (including Bougainville) plus loans would equal [the] Commonwealth grant by 1973/4 and would be twice the grant by 1980/81.
3. If Bougainville is excluded from the projections the Commonwealth grant would exceed 50% of total receipts until 1977/8. By 1980/81 the grant would still represent 42% of total receipts.
4. From a quick comparison it appears that overseas aid represents perhaps 45% of total government expenditure in Liberia and 28% in Kenya. In both cases the aid is over 90% bilateral.
5. The conclusion one draws in regard to the impact of Bougainville on constitutional development will depend on one’s ideas about the relationship of overseas aid and self-government. On this criterion alone—
• if self-government is viable at a 50% aid level, then the effect of Bougainville is to accelerate the viability date from 1977 to 1973 i.e. by 4 years;
• if self-government is not viable until aid drops to one-third of total expenditure, Bougainville makes self-government feasible by 1980 whereas without it the viability date is well beyond the horizons of the projection.
6. It would obviously be possible to set up a number of economic indicators for consideration in relation to self-government, e.g.—
• overseas aid per capita;
• ratio of overseas aid to G.N.P.
• ratio of government receipts to G.N.P.
The indicators could be derived from statistics of developing countries and off such writers as Lewis. Obviously the assessment would be fairly arbitrary and a lot of other indicators, e.g., ratio of graduates to population might have at least as much value.
7. In thinking of self-government, it may be of interest to consider total Commonwealth payments to the smaller states in Australia. For 1964/5 the figures are—
| Payment | ||
|---|---|---|
| $M | %* | |
| Q’LD. | 103 | 39 |
| S.A. | 80 | 40 |
| W.A. | 89 | 50 |
| TAS. | 44 | 53 |
- To total revenue including grant
8. The position, of course, differs significantly from the Territory in that the Commonwealth raises significant revenue from the inhabitants of the States. It does suggest, however, that some limited forms of self-government are not inconsistent with substantial economic dependence.
[NAA: A452, 1970/460]
1 Paul Kelloway, Assistant Secretary, Special Projects Branch, DOET.
2 Not printed.