The difference in the approach by the Australian government to the aboriginal Australians and the natives of Papua New Guinea. On the Australian continent the Australian government followed an approach of invasive welfare to drastically alter and (according to their view) improve the lifestyle of people. In the 1950s and 1960s the government even took the children away from aboriginal families who were still living in primitive conditions in the bush, or in otherwise impoverished conditions. What many people forget is that Australian welfare agencies and officials did the same thing to unwed, poor white Australians too numbering in 10s of thousands of children. A documentary on the station
SBS aired recently here exploring this.
By contrast, the Australian attitude to Papua New Guinea was very much laissez faire. The people there continued their stone age culture largely undisturbed. Australia never had serious plans to colonise and settle the area, while the rugged mountains and thick jungle made enforcing culture change on the inhabitants a much more difficult process than on the Australian continent.
Australia was interested in keeping the area outside the influence of neighbouring nations and also ensuring Australian companies had opportunities for mineral extraction. These aims could be achieved at much less cost by granting independence to a friendly PNG government rather than trying to integrate the area into the Australian state. Doing so would also have given Australia its first land border (which raises all sorts of other difficulties - being on an island is a very good deal). Plus, the Versailles Treaty of 1919 had outlined that the area would be a protectorate of Australia rather than a new state to be incorporated into the Federation. Also, 1975 and the final loss of the Vietnam conflict had left many in Australia sceptical about getting entangled about any more conflicts in Asia or any other moves to extend the nation's power projection (not to mention the government at home was a total mess that year).