24 June 2019

Policy uncertainty threatens start-up of Papua LNG and Wafi-Golpu

Opposition Leader Patrick Pruaitch today called on the government of Prime Minister James Marape to provide a clear sense of direction for the nation in the Parliamentary session beginning tomorrow (Tuesday).

“We are at a major crossroad in development terms. Some remedies need to be offered for the economic problems the nation is facing,” Mr Pruaitch said in a statement.

On the domestic front, the government needs to fix ongoing funding issues related to the O’Neill Government’s failed tuition-fee free education policy and cash flow issues that affect health and delivery of other public services.

Mr Pruaitch said the former National Alliance-led government had set clear directions between 2002 and 2011 that put the nation on a solid growth path with rising levels of prosperity throughout the country.

He said: “Under the previous O’Neill Government, the economy stagnated with falling employment and income levels, even though government revenues remained at an all-time high.

“Some painful short-term measures are needed if the Marape Government intends to deal decisively with the cash flow problems it has inherited from the previous government. A supplementary budget needs to be introduced soon.”

Mr Pruaitch said he has no doubt if quick, corrective measures are taken, the Marape Government will be able to engineer a solid economic turnaround that underpin the Prime Minister’s ambition to create “the richest black Christian nation”.

“Such a turnaround would generate thousands of additional private sector jobs in the next two years and bring increased prosperity throughout the nation,” he said.

Mr Pruaitch said policy signals for such a recovery were highly muted at the present time.

“The Papua LNG project, viewed as the cornerstone for economic recovery, could be delayed indefinitely because the Prime Minister is unwilling to back recent promises that his government would honour agreements made by the O’Neill government.

“The joint venture partners in the multi-billion-dollar Wafi-Golpu project have also announced they do not expect the Special Mining Lease to be approved prior to the earlier announced June 30 deadline.

Mr Pruaitch said if the Marape Government did not announce firm and decisive policy initiatives to address these concerns, it would threaten the level of Foreign Direct Investment. According to the World Bank, negative FDI flows in PNG have been the worst, since independence, under the O’Neill Government.

“Under such a scenario the nation’s socio-economic fortunes would suffer at least until 2025 when the PNG LNG Project contributes what could be the single largest increase ever in government revenues, following payment of project debt,” he said.