“I am delighted that Treasurer Abel has finally listened to one of my many media releases and realised that the O’Neill/Abel government was clearly wrong about putting a 25% tax tariff hike on UHT milk. This country would be better off if there was more listening to constructive suggestions and corrections from the Alternative Government” stated the Shadow Minister for Treasury and Finance, Ian Ling-Stuckey.

“While the Alternative Government supports the removal of this and all the new tax tariffs, Treasurer Abel’s solution to the UHT milk fiasco is one that threatens the role of Parliament and PNG’s democracy. He stated in a recent media conference “You may have seen that parliament has endorsed the 25 per cent tariff on UHT milk”. It is positive that he has backed off his earlier misleading statements and now recognises this fact, although he should have mentioned that the Opposition clearly opposed such an increase but got voted down by government members. He then goes on to say “But I have told customs to delay the implementation of that until the Ilimo product is more widely available to the public”. How can the Treasurer do this? Where is his legal power to over-turn the fact that the legislation is clear the tax tariff increase applies from 1 January 2019? (– see photo below). The Treasurer seems to think he can simply ask Customs, and presumably the IRC, to reduce or impose any particular tax rates he thinks is appropriate. So how far does the Treasurer think he can take this power? Can he now instruct Customs to reduce the 110% excise duty on the imported Maseratis also down to nothing? If he can do it for milk, will he also do it for the Maseratis bought by government ministers and their besties?” asked the Shadow Treasurer.

“The Treasurer argues that he will delay the tariff introduction until the Ilimo fresh milk products are more available in places other than Port Moresby. The Treasurer still doesn’t understand how businesses and  markets operate. Ilimo fresh milk at K5.50 or K6.50 a litre is still much more expensive than UHT milk which can be bought for K4.50 a litre. It is not competitive against UHT milk. It is only competitive against imported fresh milk.

“Of course, the reality of our broken infrastructure systems means that fresh milk will not be available cheaply in our remote communities for a long, long time. Customs will never be in a position to tell if a particular carton of UHT milk will go to Port Moresby or to one of the remote islands in Kavieng District. The Treasurer’s proposed approach of only imposing the tariff on those areas where Ilimo milk can be cheaply sent will be impossible to implement because Customs do not track goods once they are in PNG. This is another impractical suggestion from the Treasurer.

“There is a provision under the Customs Tariff Act that allows for an import duty to be reduced by the Head of State (the Governor General) acting on advice (from the NEC) and it must be included in the Government Gazette. This is very different from a simple direction from the Treasurer to the head of Customs. The Treasurer should bring all such tax tariff or other tax changes to Parliament for approval. He should do this in the next session of Parliament, as well as a new Appropriation Bill to fix his K11 billion error in failing to provide for loan principal repayments. Until we see the Treasurer obeying the law, the Alternative Government is worried that the Treasurer will simply reduce taxes for those government besties buying the Maseratis or other favourable treatments without them being gazetted and approved by NEC and the Governor General. If he can do it for milk, he can do it for Maseratis, and his besties will milk him for all that such deals are worth” stated Mr Ling-Stuckey.

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

 17 January 2019

Details

The 2019 Budget clearly introduced a new 25 per cent tariff on imported milk. This was initially denied by the Treasurer – but he now accepts that it was part of the budget. The tariff tax changes were very clear that the increases were to apply from 1 January 2019 – as shown in the heading of the final column of the tax tariff changes:

The following is from the Customs Tariff Act 1990 which indicates it is only the Head of State acting under advice and placing the changes in the government gazette which can make changes: there is no provision for the Treasurer simply to instruct Customs to make the changes.

Following is a copy of the Treasurer’s statement on delaying any milk tariff in the Post Courier on Monday 14 January: