20 June 2019
There is growing chaos about the job of the new Treasurer. What is his actual job? His job now formally excludes what used to be the key function of a Treasurer. What has he done about this?
For example, according to the official Ministerial responsibilities set out in the National Gazette of 13 June, he is not responsible for PNG’s Fiscal Responsibility Act (FRA). This is the key piece of legislation that guides PNG’s budget and debt strategy, the Act that sets limits on debt and budget deficits. It is the Act amended in 2017 by Charles Abel when he was unAble to control the level of debt so they increased the debt to GDP limit to 35%. It was the Act amended by Charles Abel to include a new fiscal anchor for the budget promised to the World Bank as part of their budget support, a new anchor that was smashed by K1.3 billion in the 2019 budget. Extraordinarily, no one in the new government is listed as having responsibility for this absolutely key piece of legislation!
Does Basil want to abandon current rules of fiscal responsibility? Can he now simply state that he’s not responsible for complying with Parliament’s legislation when he prepares the next budget? Or is this a simple typo? But if a typo, why hasn’t he corrected this crucial error? If he doesn’t correct such errors, how can we trust him in producing a credible budget?
The second most important piece of budget legislation is the Public Finance Management Act (PFMA). Modernizing this Act in 2016 was a key achievement of our new Prime Minister, James Marape. This Act sets out responsibilities for the Treasurer and the Minister for Finance. The Treasurer should be listed as having clear responsibility for the relevant parts of this act (such as sections 3A, 4A, 2, 23, 35 and 36). Once again, there is silence in the job statement for the new Treasurer. However, old Treasurer Charles Abel is listed as having full responsibility for the act. What is going on here? Does it matter?
An example of the provisions of the Finance Management Act is section 35 which states “The State shall not borrow money except under and in accordance with an Act of Parliament”. When Parliament meets next week hopefully we will have tabled the Ombudsman Commission report on the UBS loan for the Oil Search shares fiasco which lost PNG at least K1 billion. A critical issue is determining the legality of the UBS loan and whether it had to be passed by Parliament. Former Treasurer Polye was sacked for not signing the loan and it was signed by former Prime Minister O’Neill after he also claimed the role of Treasurer. So this is very important legislation which clearly, should be at the heart of the judgments that must be made by a competent Treasurer. However, it is not listed as part of Basil’s job statement. Incompetence in writing his job statement? Or someone not willing to stand up to make the hard decisions?
If the new Treasurer is not able to correct his job statement to include the two most vital pieces of legislation for doing his job, then he clearly, doesn’t understand his job and is not fit for being Treasurer. A Treasurer should know what his job is! Shouldn’t he?
Prime Minister Marape, please reconsider your economic team. PNG needs a stronger team with a Treasurer who understands his job, a Treasurer capable of shaping and implementing PNG’s new economic vision. Help really is closer than you think…
Hon.Ian Ling-Stuckey, CMG.MP
Shadow Minister for Treasury & Finance