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MELBOURNE, Australia (Radio Australia, May 14) - The Australian
government has announced the creation of a Peace and Security Fund for the South
Pacific as part of its eighth national budget, announced in Canberra this week.

The country’s Treasurer, Peter Costello, told Parliament the
fund would deal with crime, terrorism and transnational crime. An initial
allotment of AUS$7.5 million has been made.

One of the most significant aspects of the budget is Australia’s
apparent commitment to a long-term military role in East Timor.

"The budget provides AUS$500 million for a battalion of
three rifle companies - about one thousand troops - in East Timor," said
Foreign Minister Alexander Downer. "That's about one quarter of the UN
peacekeeping force in East Timor. "So that is an Australian military role
in East Timor at least until the middle of next year, and probably beyond,"
he said.

Downer said the Australian initiative more broadly reflects
concern about the internal security of some Pacific states. He said the Peace
and Security Fund would be used to help deal with conflict in countries such as
Solomon Islands, and to prevent its spread to other regions.

"Obviously the bulk of our aid budget in those regions, in
those countries, will be focused on stopping a Solomon Islands situation
occurring," he said.

"I think the focus there has to be on doing more in the
area of law and order.

"We started doing that last year, and we'll be continuing
to build in that area.

"We’ll also be focusing very much on the issue of
governance - practical things like making sure Finance Ministries, Health
Ministries, Education Ministries and so on, that at that level, they work much
more efficiently and much more effectively than they have in the past,"
Downer said.

"It's tremendously important to address all those sorts of

The Australian budget also gives a significant boost to spending
on defense and national security.

The government has acknowledged that Australian forces are now
more likely than ever to be engaged in the immediate neighborhood.

In general, Mr. Costello said, the country was performing well,
despite recently suffering the worst drought on record.

The economy is predicted to grow by three and a quarter percent
in the financial year starting in July, up from three percent this year.

Inflation is in the mid-range of two to three percent, and
unemployment is expected to remain around six percent of the workforce.

But the Treasurer foreshadowed problems for some of the world’s
major economies, which could impact on Australia.

May 16, 2003

Radio Australia: www.abc.net.au/ra

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