In 1945, after the passage of the Papua New Guinea Provisional Administration Act, Australia administered Papua and New Guinea as one territory. The new administrative arrangment was agreed to by the United Nations. Australia’s “New Deal” abolished indentured labor, created a public service and accelerated PNG’s move into the modern economy. Local Government Councils were introduced in 1949, a Legislative Council in 1951 and a House of Assembly in 1964. Copra and cocoa produced on expatriate plantations were the main products of the islands and lowlands. Administration officials, missionaries and coffee growers moved into the highlands. In the 1950s highlanders began successful smallholder coffee growing enterprises. Thousands of highland men were moved to coastal plantations under the Highlands Labour Scheme. One effect of the rapid wartime and postwar economic and social change was a proliferation of cults and millenarian movements.
In the early 1960s the Australian government was under pressure from international agencies and groups within Australia to prepare PNG for independence. The report of the 1962 United Nations Mission led to an emphasis on economic planning and a rapid expansion of secondary and higher education to produce an educated elite to take over the management of the country at Independence. Race relations improved in the 1960s when racially discriminatory legislation was repealed. Coffee, copra and cocoa continued to be the major cash crops in the 1960s but the most important economic development was the establishment of the Bougainville Copper Ltd mining project.
Political parties emerged in the early 1970s. In 1973 Chief Minister Michael Somare, leader of the PANGU Pati, produced an Eight Point Plan designed to provide for greater economic and social equality. However, as these goals were not supported by the People’s Progress Party, PANGU’s coalition partner, the plan was not implemented. The Administration took over from the missions much of the responsibility for education and health services. Established churches expanded and fundamentalist sects came to the country. The early 1970s saw interesting developments in the creative arts. A Constitutional Planning Committee prepared a Constitution and the country moved rapidly towards Independence. Early self-government and Independence were opposed by highlanders who were afraid that an independent country would be dominated by lowlanders and islanders, and by expatriates who were concerned to protect their commercial interests.
At self-government, in December 1973, Australia handed over all powers except those concerned with foreign affairs, defense and the legal system. PNG took these remaining powers when it became completely independent in September 1975. By 1975 a significant number of PNGans had joined the modern economy and had been exposed to Western social and cultural influences. However, the great majority of the people lived outside the modern economy and retained many of their traditional customs.