Australia inks $518m rugby deal with Papua New Guinea to combat China influence 

SYDNEY – Australia and Papua New Guinea (PNG) have announced a deal worth A$600 million (S$517.7 million) to include a PNG team in Australia’s National Rugby League, but with a caveat that the unusual arrangement will be scrapped if PNG signs security pacts with China or other countries.

The deal announced in Sydney on Dec 12 by the prime ministers of both countries marks a dramatic win for Canberra in

its battle with Beijing for influence in the Pacific.

To try to counter Beijing’s efforts to form a security partnership with PNG, the rugby league deal includes a confidential clause that reportedly enables Canberra to withdraw support for the new team if PNG fails to keep Australia as its primary security partner. 

Welcoming the deal during a visit to Sydney, PNG Prime Minister James Marape said it would be “pivotal in anchoring the PNG-Australia relationship”.

He said PNG had committed to having Australia as its primary security partner before the rugby league deal was confirmed.

“Is Australia pushing this on us? Far from it,” he added. “It’s in our interest to have a secure PNG, a secure border, a secure relationship – (the new) team is a benefactor of the security arrangements.”

Australian Prime Minister Anthony Albanese, an avid rugby league fan, confirmed that he had committed A$600 million over 10 years to support the inclusion of a PNG team, which will be based in PNG’s capital Port Moresby, and will compete from 2028.

“We work together, and part of that working together is because of our common values,” he told reporters.

The deal has been celebrated in PNG, whose poverty-stricken population of 10 million residents includes diverse ethnic groups that are largely united by an almost religious devotion to rugby league. 

An expert on PNG politics, Mr Bernard Yegiora, a lecturer at Divine Word University in the city of Madang, told The Straits Times that the inclusion of a local team in the Australian rugby league was a “huge deal” that would “take the relationship with Australia to a new level”. 

“PNG has a massive rugby league fan base,” he said. “This will influence people’s perceptions that we are part of Australia. It is winning the hearts and minds of the PNG population across the country.”

In recent years, China and Australia have competed to secure policing and security deals with nations across the Pacific. But the move to include a PNG team in Australia’s National Rugby League marks a change in tactic that is likely to win over public opinion.

Australian sports historian Greg Blood told ST that the deal marked the most substantial investment that Australia has ever made in sports diplomacy.

He said Australia has previously provided funds to Pacific nations to help develop sports or assist athletes and coaches with travel, but the funding and the scope of the projects were limited.

“This is a first for Australia, bankrolling a team,” he said, adding: “Time will tell whether it is a good investment.”

Mr Blood noted that the project still faces major hurdles, such as persuading foreign players to move to Port Moresby, where crime rates are high.

“The government is looking at how you build a relationship with PNG. It is obviously through sport,” he said. “The government doesn’t want to say it, but it is about securing PNG support over China.”

PNG is the only country in the world whose national sport is rugby league, a sport that is relatively little-known – particularly compared with rugby union – and is played mainly in eastern Australia, New Zealand, France and northern England.

An estimated 80 per cent of PNG residents follow the National Rugby League, the world’s most competitive domestic competition.

To try to draw foreign players to join the new team, the PNG government introduced laws last week to exempt foreign players from income tax.

Mr Yegiora said the rugby league deal could provide far-reaching benefits to PNG, which suffers from high unemployment and high rates of violence and drug use.

“It could help the economy, help people out of poverty, and provide young people with a better pathway for the future,” he added.

Australia is by far the biggest donor to PNG. According to research by the Lowy Institute, Australia provided A$993 million in aid and development funding to PNG in 2022, the most recent year for which data is available.

China was the second-biggest national donor, providing A$79 million, followed by Japan, which gave A$58 million.

Beijing’s efforts to cement ties with PNG and other Pacific states have caused anxiety in Canberra about the prospect of China gaining a naval base in the South Pacific, whose waters provide access to Australia’s north-east.

Australia’s various policing and security deals with PNG include a A$200 million security pact inked in December 2023.

Similar battles have played out in other countries.

On Dec 9, Mr Albanese announced a treaty that involves providing the tiny nation of Nauru – the world’s third-smallest country – with A$140 million in financial support, amounting to A$14,000 for each of its 10,000 residents. 

As part of the treaty, Nauru, which switched diplomatic recognition from Taiwan to China in January, agreed not to form security pacts with other countries.

Australia has made a similar arrangement with Tuvalu.

Mr Marape said the rugby league deal was aimed at “uniting our diverse country”.

“Uniting the most diverse nation on the face of planet earth and also uniting PNG (and) Australia together in the way that matters most, people to people,” he said.