The biggest single Australian aid package worth $1 billion dollars has been announced by the Prime Minister, John Howard.

The aid package will be made up of $500 million in grants and $500 million in concessional loans. It will be administered by a joint commission overseen by Indonesian President Yudohyono and John Howard.

The aid is in response to the tsunami that devastated areas of South Asia on December 26. The Aceh region of Sumatra in Indonesia was particularly hit and will be a focus for much of the aid package.

• Listen to Howard announce the aid package.

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• Listen to Howard Announce Day of Mourning for Tsunami Victims.

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• Listen to US Secretary of State Colin Powell comment on the Tsunami.

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This is the transcript of the press conference held by the Prime Minister, John Howard, at the Mulia Hotel, Jakarta, Indonesia.

Well ladies and gentlemen, I’ve just had a meeting with President Yudhoyono, I took the opportunity to personally convey to him the condolences and genuine sympathy of the Australian people to the people of Indonesia for the appalling lose of life and the terrible suffering that follows from the disastrous impact of this great natural disaster. No country has suffered more than Indonesia, the lose of life will probably never be accurately calculated and it was an opportunity for me to personally convey to him on behalf of the Government and the people of Australia how much we had sorrow in our hearts for what had occurred to his people.

I’m able to announce arising from this meeting what is an historic step in relations between Australia and Indonesia in the wake of this terrible natural disaster which has inflicted such suffering and destruction on the people of Indonesia. I can announce an Australia-Indonesian Partnership for Reconstruction and Development. It will involve the largest single aid package in Australia’s history – $1 billion Australian dollars will be made available in an aid package to involve the reconstruction and development of Indonesia. It will be made of up of $500 million in grants and $500 million in concessional loans. The grants will be used for more short term restorative projects, the loans for longer term development projects. The programme will be administered by a joint commission which will be overseen by President Yudhoyono and myself. We will depute our foreign ministers and in each case an economic minister to ensure that the programme proceeds smoothly. There will be a joint secretariat which will comprise people from both countries. It will in every respect be a partnership between Australia and Indonesia. I think it is very important in the wake of all of the aid that is flowing into this country to remember that we are guests in Indonesia, that we are here to help the Government and the people of Indonesia and the ultimate responsibility for co-ordinating the provision of that aid naturally rests with the Government of Indonesia. But in so far as the Australian aid programme is concerned it will be a joint commission, we have in fact with the ready acquiescence and approval with the Indonesian Government entered into an arrangement where there will be Australian officials seconded to the Indonesian co-ordinating agency for this disaster, which I understand is called BAPPENAS, and in every way we’ll be working together as partners and friends to bring about the wise and valuable utilisation of this very significant commitment.

I want to make it clear that this 1 billion Australian dollars is in addition to existing Australian aid to Indonesia. It is completely over and above what we now provide and that will bring the provision of aid over the next five years to something in order of $1.8 billion Australian dollars and of course it is in addition to the resources that have already been announced by the Government, the commitment of $60 million and all the Air Force, all the ADF and other assistance that the Government is already providing.

It’s been said before but it does need to be repeated that this is a human tragedy on a scale that none of us in our lifetime have seen and it does require a response above the ordinary. I am very proud of the fact that Australia was the first on the scene amongst foreign countries helping Indonesia and that is something that is deeply appreciated by the Indonesian President without in any way of course denigrating the efforts of others, this is not an occasion to sort of get into meticulous comparisons, it’s an occasion of people of goodwill to work together but Australia has been in the forefront of countries expressing in practical ways that goodwill. As I said in Australia before I left that the response of the Australian people to this tragedy has been remarkable, and it’s demonstrated that Australia has a good heart and the people of Australia will always respond to a deserving cause in a very generous fashion and they’ve certainly done that. I believe that the decision that I’ve announced tonight, which I will report to the conference tomorrow, will have the overwhelming support of the Australian people. It expresses through the Australian Government the desire and the will of the Australian people to maintain a close and co-operative partnership between Australia and Indonesia. We see Indonesia’s need, we respond to that need but we respond to it in a way that respects the sovereignty of Indonesia and also respects the need for our two countries to work in partnership and the meeting I had this evening with President Yudhoyono had all the elements of two leaders wanting to work together as friends and partners in a time of challenge and distress for one of us. So I’m very pleased to announce this decision, I think it will place the relations between our two countries on an even firmer footing and it will echo I believe the desire of millions of Australians for our country to play a major role in rebuilding what has been destroyed and in the process laying the groundwork for a brighter, more stable and stronger future for the people of Indonesia.

JOURNALIST:

What was the President’s reaction to Australia’s generosity?

PRIME MINISTER:

He said, if I can best paraphrase it, that he had been overwhelmed by it and he would never forget it.

JOURNALIST:

Mr Howard, what kind of projects do you see the short term grants going towards?

PRIME MINISTER:

Well I think it would obviously go towards rebuilding necessary infrastructure like schools. I don’t think at this stage I want to start giving you a list because the whole idea of having people on a commission from both countries is to work out what those projects are. But the whole idea is to rebuild what has been destroyed and in the process lay the groundwork for stronger, more effective governance and a greater capacity to deal, if tragically it should happen again in the future. Natural disasters perhaps not on this scale but of any kind of dimension which are always very destructive in countries that have poor infrastructure and a struggling standard of living.

JOURNALIST:

Prime Minister, is there any timeframe for the work of this commission?

PRIME MINISTER:

Well it’s over a period of five years, the money’s going to be provided over five years and I would hope therefore at the end of the five year period we could look back on five years of very solid achievement.

JOURNALIST:

Prime Minister, do you think that this will also lead the way for other developed nations?

PRIME MINISTER:

Well I don’t want to point the finger at other countries. Look the world has been very generous. My responsibility is to make sure that Australia’s generosity matches the need of those who are in distress. That’s my responsibility and I believe that I have discharged that responsibility but even more importantly than that I am proud of the fact that my fellow country men and women have done the same thing. The response of Australians to this disaster has been just been so overwhelming and so generous and so decent and so good that it makes you very proud indeed to be an Australian.

JOURNALIST:

Given the size of the donation is there any capacity for Australia to provide any money to the other nations…

PRIME MINISTER:

Well we have already done that and bear in mind that India and Thailand have said they do not want foreign aid. There will be through the money that we have donated to agencies and of course donations that individuals and corporations have made to agencies, there’ll be quite a deal of money flowing to countries such as Sri Lanka. Bear in mind that we have provided medical teams to Sri Lanka , through the World Health Organisation, and to the Maldives and I’ll be meeting representatives of those two countries tomorrow.

JOURNALIST:

How much did the idea of national security play into this, if at all, given that there’s talk of terrorists perhaps gaining a foothold in the…

PRIME MINISTER:

Well the purpose of doing this is as I have explained it. There is an overwhelming humanitarian case…

JOURNALIST:

(inaudible)

PRIME MINISTER:

No the idea of us providing this assistance is as a response to the need of a friend and a neighbour from a country such as Australia that is by the standards of the world fortunate, wealthy and able to help.

JOURNALIST:

Mr Howard, what do you want to see come out of the conference tomorrow from other nations?

PRIME MINISTER:

Well that is really a matter for them. The response of the world as a whole has been very generous, I think the most important thing is to make sure that assistance gets through on the ground and obviously co-ordination is needed and obviously we are in Indonesia and the overall responsibility for co-ordination naturally in co-operation with the countries that are helping rests with Indonesia. And my view is that whatever works in a situation like this you adopt, you don’t sort of have some kind of golden rule about who does what, it’s just a question of making it work. I mean the good thing from our point of view is that we decided very early to send people in and they went in and they’ve been doing good work for a week or more and that’s terrific and my view is that whatever works ought to be embraced.

JOURNALIST:

Prime Minister can you put the, is it possible to put the $1 billion in context? I mean does anyone in governments have any true idea about the amounts of money it will take to…

PRIME MINISTER:

Well I think, look it’s a very big contribution from Australia, so putting it in a context I think it is probably the largest single aid package in Australia’s history but you know it’s 1 billion Australian dollars. You’re asking me can I put a figure on the total amount that’s needed? No I can’t. I mean it’s obviously an enormous amount and it’s a lot more than $1 billion. But then there are other countries, there are international agencies, there’s the World Bank, or all sorts of organisations. But this is a bilateral arrangement between Australia and Indonesia, I want to make that very clear. And the only people who will decide how this money is spent is Australia and Indonesia that is how it should be because Indonesia is the recipient country and Australia is the donor country and the people of Australia would want it to be administered in the way that I have described.

JOURNALIST:

Prime Minister, what role then do you see for the United Nations in the overall relief effort?

PRIME MINISTER:

Well that really is a matter for the United Nations. And my view David is that it’s a question of who and how you can deliver the help, who can deliver and how they can deliver the help the best, that’s what matters. I don’t think there’s any hierarchy of responsibility, I think it’s very unwise to sort of get, in a situation like this, to get caught up with saying oh well this really should be done in a particular way. I mean the only way that we can deliver this aid effectively is in the manner that I have explained and we’re not going to deliver it through an international agency, we’re going to deliver it directly in a bilateral basis. I said in Australia this morning that this crisis has reminded us again that we still live in a world of nation states and it’s only nation states that have at their disposal assets and have an executive capacity to speedily deploy those assets and to bring about results. Now that’s not meant critically of the United Nations and I respect their role and I respect the role of their agencies. But as somebody who is, as you know, interested in practical outcomes in all manner of situations it’s been the capacity of nation states and in the case of this nation state, Australia, being very close to the area most effected to deliver assistance immediately and directly through bilateral discussion and co-operation with the Indonesian authorities that we’ve been able to work in a very effective way.

JOURNALIST:

Prime Minister, have you got any plans to visit Aceh or…

PRIME MINISTER:

No, I don’t have any plans at the moment to visit Aceh, I frankly think that at the moment the resources of the military and so forth in Aceh are better employed looking after the people who’ve been hurt, I don’t think I can add any value by going to Aceh at the moment, it would simply be to divert police and military and so forth away from their more urgent task. That’s my view.

JOURNALIST:

There are reports today that when Colin Powell visited the airport actually closed down for a couple of hours to fix an aircraft. Are you aware of that and do you think that was a waste of…

PRIME MINISTER:

Well look I’m not going to get in to talking about what other people have done. Look, you’re asking me what my position is, but I don’t think that’s a result of any particular decision that the Secretary of State took and knowing the sort of man he is I think he would have been as disturbed as anybody would be if there was any suggestion that resources had been diverted or the flow of things had been interrupted, that wouldn’t have been his wish I know, I certainly know that. But speaking for myself, I don’t think I can add any value at the moment, I’ve been briefed by people who’ve been there as part of the teams, I’ve seen them over dinner by a number of Australians who’ve been heavily involved in the effort over the past week and I don’t intend for the reason I’ve explained to visit in the next little while.

JOURNALIST:

Mr Howard, the Opposition wants you to raise the situation in Burma at tomorrow’s conference, are you concerned that there is perhaps a bigger death toll there than we have heard?

PRIME MINISTER:

Yes, well look I’d be concerned, I hope that the representative of the Burmese Government will be forthcoming. We want to help, when I say we I mean the world wants to help, but you can’t, you know, there are limits to what one can do.

JOURNALIST:

When do you expect some of the money from the $1 billion package to start flowing through?

PRIME MINISTER:

Well soon but I can’t answer the next question and that is when precisely is soon. But it will be soon.

JOURNALIST:

Prime Minister, I hope this question hasn’t been asked but you talked about the concessional loans, can you give us some idea…

PRIME MINISTER:

40 years, no interest, no repayment of principal in the first 10 years.

JOURNALIST:

Will those grants in any way be tied to Australian companies or…

PRIME MINISTER:

No, no. They will be, they will only go to projects and activities jointly agreed upon by Australia and Indonesia. But we’re certainly not intending to say well you know you’ve got to involve Australian companies. I mean I think in the normal course there would be Australian companies involved because they’re competitive players in these things but that’s not the purpose of the aid.

JOURNALIST:

How did you arrive at this figure, was it during your talks with the Indonesian President?

PRIME MINISTER:

Well we had some discussions in Australia first and then formulated a proposal which I raised in outline with the President two nights ago, I rang him again a couple of nights ago and outlined the proposal to him and I then asked Mr Downer to talk in some detail about it today to Hassan Wirajuda and the economic minister and the Vice President and then the President and I talked about it again tonight and finalised the details.

JOURNALIST:

What was the reception from SBY?

PRIME MINISTER:

I beg your pardon?

JOURNALIST:

What was the reception from SBY when you mentioned it?

PRIME MINISTER:

Well he was very grateful. I think I may have said earlier that he expressed words to the effect that he’d been overwhelmed by the generosity of Australia, the speed of our response and it was something he would never forget.

JOURNALIST:

Was the US involved at all in helping Australia decide on…

PRIME MINISTER:

No, it had no contact with or influence of any kind. No.

Thank you.