Papua New Guinea to join NRL under historic deal with a China ‘escape clause’

Australia will be able to withdraw $600m in funding for a PNG rugby league team at any time and without cause under a 10-year deal struck to financially back the expansion side that will enter the NRL in 2028.

The Australian government will not release terms of the deal between the two countries, which sits alongside the bilateral security agreement that comes into force on Thursday, but officials have described the arrangement as based on shared strategic trust.

Related: Lucrative tax breaks will be ‘vital’ in PNG team’s bid to attract top NRL players

The deal, which starts in the current year and expires in 2034-35, includes the construction of a compound to accommodate players and tax breaks to assist in recruitment.

Prime minister and rugby league fan Anthony Albanese said the deal – which has been years in the making – was about more than sport, and would bring benefits to the PNG economy and those living in the region.

“Rugby league is PNG’s national sport, and PNG deserves a national team,” he said, adding it will normalise people-to-people connections between the countries.

“It will change the way that PNG is reported on in Australia, and the way Australia is reported in PNG, to something that’s not unusual, but something that is a day-to-day occurrence,” he said.

PNG prime minister James Marape said the impact will be felt beyond the rugby league field. “It’s national development, national unity, regional unity, PNG-Australia unity, our security conversations, all of that is turned into this one thing.”

Although neither leader would divulge details of security discussions, a Pacific diplomatic source confirmed the two governments have shared correspondence that includes a commitment from PNG not to enter into security or military arrangements with China.

“This part of the world, our Pacific, must remained focused, united, free-market, [with a] democratic ambience,” Marape said. “This is not just for today and what is in 2028, far from it. It is futuristic to anchor our two nations.”

ARLC chair Peter V’landys said the deal was a “historic step” for the sport, Australia, PNG and more broadly the entire Pacific region.

“Rugby league isn’t just sport, it’s a social force for good – a way to improve lives and build stronger communities,” V’landys said.

“The new PNG team provides the NRL with a new 10 million-plus audience many who will go from being casual fans into engaged fans. Just as importantly the pathways investments will provide many new and exciting players to the game.”

The spending is split roughly in half between the NRL club and other rugby league-related development activities in the Pacific.

$290m will go towards the NRL franchise and $250m is for rugby league programs in the region. $60m will be paid directly to the NRL as a licence fee, which is expected to be shared between existing clubs.

$120m of the money committed will come from existing government programmes, leaving an average annual cost to the budget of $48m.

However the planned NRLW team will not enter the competition in 2028. The bid’s chief executive Andrew Hill said the women needed a team in an Australian second tier competition – similar to the men’s PNG Hunters – before they could field a competitive elite side “What we have found is that there’s a little gap at the moment between where our women are compared to our boys.”

The bid has established a pathways program run by former Parramatta Eels assistant coach Joey Grima that has more than 700 teenagers. A requirement is players attend school, and they are provided merchandise by the team including jerseys and hats. The Australian Schoolboys drew with the PNG Junior Kumuls 22-22 in October.

The arrangement also involves more than $100m investment from Papua New Guinea which will build new facilities and accommodation for players and staff as well as fund the tax breaks.

Australia has provided more than $1.4bn to the PNG Treasury in the past three years according to the Lowy Institute.

The PNG government hopes Australian tourists will also travel to Port Moresby to watch matches involving the new team.

About 10,000 Australians currently live in PNG, and approximately the same number of PNG nationals currently reside in Australia.

The PNG Hunters have played in the senior Queensland Cup competition – one tier below the NRL – since 2014 and were premiers in 2017.

At $60m a year, the investment is dwarfed by Australia’s overall spending in the Pacific, which the government claims reached $2bn for the first time in 2024-25.

The deal has been secured by the signing of detailed term sheets involving the two governments and the NRL, but Australian officials expect the long-form agreements to be signed within weeks.