The Opposition Leader, Hon. Patrick Pruaitch, has urged the O’Neill-Abel Government to concentrate on formulating a sensible 2018 budget that begins to repair the O’Neill Government’s economic mismanagement since 2012.
“This will be in the best interest of the people of this nation. PNG has undergone five years of wasteful expenditures that has seen public debt soar from less than K8 billion in 2011 to more than K22 billion,” Mr Pruaitch said in a statement.
“As Opposition Leader, I am committed to playing a constructive role in the 10th Parliament. We in the Opposition stand ready to assist the Government in the framing of a realistic 2018 budget that will stand the test of time in the best interests of our nation and all Papua New Guineans,” Mr Pruaitch said.
Mr Pruaitch, who served as PNG Treasurer until his dismissal in late April, said the PNG Treasurer, Hon. Charles Abel, was presently promoting a 100-Day Plan incorporating a 25 Point agenda that has little bearing on the nation’s short term economic difficulties.
He said: “Unfortunately, in a desperate attempt to make the O’Neill Government look good and not culpable for current economic ailments, Mr Abel is conducting interviews and talk shows where half-truths and misinformation is being fed to the public.
“I call on Treasurer Abel to address the issues at hand and not to keep attempting to sweep problems under the carpet because the entire nation is well aware of the serious cash flow issues faced by this Government over the last two to three years.”
Among the half-truths currently propagated are:
- Government revenues have been adversely impacted because of a big drop in revenue from the resources sector. The real truth is that the O’Neill Government has received more revenue every year since it gained office in 2012 and has, for the first time in our history, seen revenues top the K10 billion mark.
- Claims that inadequate levels of foreign exchange, which has caused many companies to retrench workers, is due to a fall-off in export revenue and an inability to pay for imports is a myth and a fallacy. In fact, exports are at record levels and PNG’s trade surplus is also at an all-time high.
Mr Pruaitch said total Government revenue in 2012, excluding grants, amounted to K9.4 billion. This was 49% more than the K6.3 billion received by the Somare Government in 2007, the first year of its second term in office, and K1.1 billion more than in its final year in 2011.
While Treasurer Abel speaks of the ratio of revenue to GDP, the fact remains that 2012 saw the lowest revenue during the O’Neill Government five-year term.
“This year the budget has forecast a revenue of K9.99 billion or K580 million more than in 2012. We should not be facing an economic crisis because this year’s Government revenue is the highest for any year in PNG history with the exception of 2014 and 2015,” he said.
GOVERNMENT 2012-2017 SPENDING WAS K30 BILLION MORE THAN 2007-2011
Mr Pruaitch said Treasurer Abel would worsen the nation’s current economic woes if he continued to focus on fictional goals instead of addressing core economic issues in the all-important 2018 National Budget, to be brought down in eight weeks.
- First, he said, the Treasurer and O’Neill Government have to accept that in the past five years they had spent K30 billion more than in the previous five-year period, when revenue and budget deficits and borrowing were included.
- Second, the O’Neill Government must recognise that in spite of this massive level of expenditure all major economic indicators have been falling since at least 2014, including employment generation and per capita (average) incomes.
- Third, excessive levels of borrowing over a short period has soaked up the ability of PNG’s private sector to absorb further debt and forced the Central Bank to print new money. This has also created great difficulty in raising loans overseas, as shown by BPNG’s inability to draw down the second tranche of the Credit Suisse loan and failure in the past three years to issue a Sovereign Bond.
- Fourth, the private sector has been shedding jobs in view of these economic difficulties and many foreign-owned businesses have been disinvesting, causing Foreign Direct Investment to become negative for the first time in many years.
ONLY THE 2018 BUDGET CAN START TO FIX THE CURRENT CRISIS
Mr Pruaitch said: “These are critical issues that cannot be addressed by the ‘100-Day Plan’ or the Supplementary Budget, but where important solutions can commence with the 2018 National Budget.
“We have seen no sign that this is happening. Government is mainly concerned about propping up its image rather than addressing the damage caused to an economy that was performing extremely well until the era of massive Government borrowing – and waste – began in 2013.”
HON. PATRICK PRUAITCH CMG, MP
Leader of the Opposition
10th September, 2017