Posted on The National
FORMER Prime Minister Peter O’Neill says plans by Treasurer Ian Ling-Stuckey to borrow from Asian Development Bank (ADB) and Australia to fund the budget goes against economic common sense.
He said the plans would dig a hole for the country’s economy during challenging global circumstances.
“It is not needed and will only lead to a blowout in the debt limit,” O’Neill said.
“The lengthy delays in the start of major investment projects is causing a slowdown in projected GDP (Gross Domestic Product) so to take on needless debt now would be very foolish.
“A smart and strategic government should only borrow for the investment in infrastructure that delivers returns for the economy.
“Smart borrowing for investment in roads, bridges, airports, ports and health and education is a tool to build the economy, create jobs and improve living standards.
“This has been the approach of the government for the past eight years and seen a sensible management of debt levels.
“The government has a responsibility to manage the budget, to prioritise expenditure against cash flow throughout the year and continue to increase efficiencies in recurring government expenditure.
“It would be a very bad move for the government to borrow for consumption including wages, administration, government travel and other expenses.
“I would be interested to hear if Prime Minister James Marape and Patrick Pruaitch are supportive of borrowing to pay for non-capital expenditure as they were strongly opposed to this approach for many years.
“It seems this new Treasurer likes to spend a lot of time talking and name calling, but the policies he is putting forward are not only against the stated policies of the Marape Government, but are unworkable.
“Now is the time to move beyond politics and work together to deliver sensible strategies to manage and advance the national economy.”
He said the plans would dig a hole for the country’s economy during challenging global circumstances.
“It is not needed and will only lead to a blowout in the debt limit,” O’Neill said.
“The lengthy delays in the start of major investment projects is causing a slowdown in projected GDP (Gross Domestic Product) so to take on needless debt now would be very foolish.
“A smart and strategic government should only borrow for the investment in infrastructure that delivers returns for the economy.
“Smart borrowing for investment in roads, bridges, airports, ports and health and education is a tool to build the economy, create jobs and improve living standards.
“This has been the approach of the government for the past eight years and seen a sensible management of debt levels.
“The government has a responsibility to manage the budget, to prioritise expenditure against cash flow throughout the year and continue to increase efficiencies in recurring government expenditure.
“It would be a very bad move for the government to borrow for consumption including wages, administration, government travel and other expenses.
“I would be interested to hear if Prime Minister James Marape and Patrick Pruaitch are supportive of borrowing to pay for non-capital expenditure as they were strongly opposed to this approach for many years.
“It seems this new Treasurer likes to spend a lot of time talking and name calling, but the policies he is putting forward are not only against the stated policies of the Marape Government, but are unworkable.
“Now is the time to move beyond politics and work together to deliver sensible strategies to manage and advance the national economy.”
Go to this link for more: https://www.thenational.com.pg/oneill-bad-move-by-govt-to-borrow/
