“The O’Neill/Abel PNC government is hurting most PNG families with massive tariff tax increases. In its 2019 Budget, through 37 pages of detailed information, the government has snuck in or confirmed tax tariff increases on 664 items. This is on top of the 254 tariff increases introduced last year! This includes new taxes on canned tuna and mackerel of 25%, taxes on imported chicken more than doubling to K3.50 per kg, taxes on milk products of 25%, taxes on cooking oils of 25%, increased taxes on tinned meat of 20% and the list goes on. Tax tariff increases mean increased prices even for locally produced items because it removes price competition. Most of the tax tariff increases are on family food products, although there are major increases on other household necessities such as soaps, toilet paper and laundry detergents as well as clothes and building products.  Doesn’t the government understand that people are already struggling under PNG’s high cost living?” asked the Shadow Minister for Treasury and Finance, Ian Ling-Stuckey.

”But there is some good news – at least for the besties of the Prime Minister and Treasurer. The government has also decided to cut some excise taxes. Treasurer Abel stated when introducing the 2019 budget that he was cutting excise on 11 formerly “luxury” items that are now considered household “necessities”. While increasing taxes on family food and household products, the PNC government has decided to cut excise taxes from 30% to zero for perfumes, Sony Playbox consoles, microwaves, electric clothes dryers, TVs, camera lenses, binoculars, projectors and even electric hair stylers. Treasurer, don’t you understand that the vast majority of the people of PNG don’t even have access to a reliable electricity supply? Don’t you understand that when we buy our loved one some perfume that we know that it is a luxurious gift? Don’t you understand that most people in PNG have to dry their washing on a clothes line rather than in an electric clothes dryer? Don’t you understand that most of our children would prefer access to medicines rather than cheaper access to a Sony Playstation games console?” asked the Shadow Treasurer.

“How can the O’Neill/Abel PNC justify increasing taxes by 25% on basic household food items and then reduce taxes by 30% on what are still “luxury” goods to the vast majority of people in PNG? This is a government that is only looking after themselves and the people they have made filthy rich by being their “besties” and cronies. It is a government totally out of touch with the cost of living burden on PNG families” stated Mr Ling-Stuckey.

 

Hon.Ian Ling-Stuckey,CMG.MP
Shadow Minister for Treasury & Finance

 6 January 2019

Details

As part of the 2019 Budget, the PNC government introduced 37 pages of changes to the Customs Tariff Bill. This bill consisted of two main parts. The first part called (a) dealt with new tariff changes. This included 73 new tariff increases, and 16 decreases. The second part (b) was to confirm that the planned tariff cuts planned from 1 January 2018 were terminated. For the 591 items covered in Section (b), the government has confirmed effective tax tariff increases starting from last year. In addition, as part of the 2018 Budget, the PNC government introduced tariff increases on a further 254 items, as well as major increases of excise on items such as petrol and cigarettes. Extracts from the Customs Tariff Bill showing some of the increases were included in my last media release – copied at the end for convenience.

The excise tariff reductions on “luxury” goods were explained in the following terms in his introduction speech to Parliament:

The following section shows the excise items covered by the Treasurer as former luxury items to necessities that have been repealed.

The government once again has been caught out with poor implementation and a lack of attention to detail. Given the clear intent of the legislation was to repeal the excise tariff on what were no longer considered luxury items, the final column should have been headed “Excise Tariff Rate Effective on and from 1 January 2013”. This was when these rates were last updated. The former rates were 30%. These rates have now been repealed. Given that “repeal” means cancel, revoke, abolish and/or remove, the rates are now “Free” or “0%”.  See the following extracts from Schedule 1 of Duties of Excise deemed to have into operation from 1 January 2012 as amendments to the Excise Tariff (Tariff Reform 199) Act 1998 to indicate the former rates of excise were 30%. These have now been repealed.

Extracts from earlier media release 2 January of the pattern of tariff increases:

An extract covering some of the building product increases follows: