Seven defends PNG corruption story

The Seven Network is standing by a story linking Australian aid to corruption on Papua New Guinea. Source: AAP

THE Seven Network has defended a story which linked Australian aid to corruption in Papua New Guinea, after Prime Minister Peter O'Neill called for the network to apologise and a reporter to be sacked.

In a statement, Seven said it did not not allege $A1.7 billion in Australian aid money had been stolen in PNG in a story aired on current affairs program Today Tonight on Monday.

"Rather, the story stated that about half of PNG's total budget - $1.7 billion - is lost to corruption every year, and that some of this stolen money is laundered in Australia by corrupt officials," the network said in a statement on Thursday.

"The allegations were based on interviews with the head of PNG's Anti-Corruption Task Force, Mr Sam Koim - who was appointed by Prime Minister O'Neill himself - and Professor Jason Sharman from Griffith University, one the world's foremost experts on corruption and money laundering."

Prime Minister O'Neill on Wednesday night issued a statement calling for an apology from Seven, and said journalist James Thomas should be sacked.

"I can say without fear or favour that the Channel 7 TV report alleging $A1.7 billion of Australian aid money being stolen from PNG's budget annually is the Australian media's most ill-researched, mischievous and misinformed piece of journalism coverage on PNG affairs," Mr O'Neill said.

"No one has stolen Australian taxpayers' precious $A1.7 billion because that amount of Australian money has never featured in any of our national budgets to date."

Mr Koim told Radio Australia the next day that PNG loses about 40 per cent of its national budget annually to corruption, waste and mismanagement.

In the report, Prof Sharman suggested the amount of money being stolen from PNG could cause the country to collapse, sparking a refugee crisis with direct implications for Australia.

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