Pruaitch: PNG in “deep economic crisis”

Posted by The National

PNG is in a “deep economic crisis” which the new Marape Government needs to address and heal, says Opposition Leader Patrick Pruaitch.
“It is a legacy of economic burden from the previous Peter O’Neill Government. Since the election of Marape, there has been an outpouring of public support.
“However, people will make their final judgement after assessing the outcome the promises by them (Marape and his supporting MPs).
“Can PNG’s financial and economic woes be addressed and turned around quickly enough? I am hopeful and optimistic Marape has acknowledged the importance= of constructive criticisms in paving the way for his goal of making PNG the richest black Christian nation where no child is left behind,” he added.
“As a former Treasurer in the O’Neill PNC (People’s National Congress)-led Government, national debt had been rising since 2014.
“As Marape knows, we were running huge budget deficits at that time.
“Prior to getting sacked from Cabinet, I raised the issue of economic mismanagement by the PNC-led\ Government.
“According to the 2018 Final Budget Outcome Review, released just a few weeks ago, Government revenue and grants last year hit an all-time record of K14.1 billion.
“So how can we, in the Opposition, believe the nation is facing an economic crisis when Government revenue was K1.3 billion more than projected revenues in the 2018 Budget?
“That was K2.5 billion more than it was in 2017. Rather than a crisis, these figures suggest a booming economy, with record levels of tax coming from a vibrant private sector.
“When the former government took office in 2012, it managed a record K9.7 billion National Budget.
Virtually in the intervening years, up to 2019, revenue to Government increased by an amazing 45%.
“Any country in the world would have been over the moon to have enjoyed such a huge revenue increase.
The heart of this crisis is very simple: the former Government was incapable of living within its means.
“It squandered record revenues and borrowed and borrowed and spent an additional K17.1 billion, that in 2018, a record K25.6 billion debt rising from K8.5 billion in 2012.”
“In the past month, crude oil prices have fallen by US$11 per barrel.
Domestic debt servicing costs are one of the burdens that the 2020 Budget will have to address.
“Regardless of Government actions, there will be no economic recovery, unless the private sector is enabled to invest in all resource sectors such as agriculture and SMEs.
“The time for change is now. We do not have the luxury that the previous Government had,” he added.

Prime Minister James Marape’s key points.
The inflation rate (IR) in PNG was recorded at 4.5% in the first quarter of 2019. PNG’s IR averaged 6.99%
from 1978 to 2019, reaching an all-time high of 23.16% in the third quarter of 1995 and a record low of
-1.61% in the third quarter of 2007. – TRADINGECONOMICS

• PNG-LNG’s benefit to Papua New Guineans and country will peak in 2025 when the Government fully retires project bank loans;
• PAPUA-LNG to deliver maiden returns in the mid-2020s;
• WAFI-GOLPU mine in Morobe should be in the mid 2020s;
• OK Tedi will continue to be mined in an environmentally- friendly technology;
• FRIEDA River mine in West Sepik should begin operations pending environmental issues;
• LIHIR mine in New Ireland will continue to be mined in a more transparent manner;
• ALL fisheries catches must be processed incountry at earliest;
• THERE will be no more exports of round logs in the forestry sector with domestic downstream
  processing;
• IMPEDIMENTS to businesses will be removed;
• AN electronic case management system for the judiciary will be implemented;
• THE Independent Commision Against Corruption (ICAC) will be set up as a matter of urgency;
• THE economy will be safe from abuse, theft, mismanagement, corruption and complacency;
• BUSINESES will operate in an environment that is safe and less susceptible to corruption, bribery and lawlessness;
• PNG is plagued with a huge debt burden with the Government struggling to maintain and sustain economic growth;
• THE sovereign bond negotiated last year by former Treasurer Charles Abel was an indication of the confidence of the international community in PNG;
• TREASURER Sam Basil to present Cabinet on June 24 (Monday) PNG’s debt level and the state of the economy;
• NATIONAL Planning and Treasury intends to look into areas where overseas grants can be easily accessed;
• A FORENSIC audit of PNG’s tax system will be carried out to rope in tax evaders;
• UPCOMING resource projects will be renegotiated with a view to benefit people and country more;
• ALL revenue generated overseas must be brought back to benefit shareholders;
• GOVERNMENT to ensure that there is clearer dividend returns in State Owned Enterprises (SOEs);
• THE Sovereign Wealth Fund (SWF) will be fuelled with dividends from SOEs;
• TAX incentives and special support grants or a loan scheme will be given to SMEs to help facilitate economic growth;
• ALL projects open for public tender will be conducted transparently, including Works Department;
• GOVERNMENT to review maps to transform PNG into economic zones for competent and efficient allocations of funding and resources got infrastructure development; and
• MANUS to be declared as PNG’s first corporate tax free zone.

Go to this linkl for more: https://www.thenational.com.pg/marape-exciting-times-next-year-for-people-and-country/