TREASURER CONTINUES WORK ON TAKING BACK THE PNG BUDGET AND ECONOMY IN 2020
PRESS RELEASE- 29/01/2020
Treasurer Ian Ling-Stuckey has assured Papua New Guineans the job of taking back PNG from the brink of economic collapse is continuing.
“January has been a busy month for my staff and I as we continue working to turn around the economy from former PM O’Neill’s train wreck years” the Treasurer said.
“Government’s must protect their people drawing on the best available advice and having all Ministries working together. A current risk facing PNG and the world is the coronavirus originating from Hunan, China. Our Departments of Health and Immigration have been at the forefront of the response. In the economic agencies, we also are providing our support.
On 26 January, in the early days, I instructed the Treasury Secretary to be on alert regarding funding where urgently needed for the coronavirus crisis. There also will be economic implications from this crisis across many parts of PNG.
Tourist hotels will have lower numbers of tourists, our agriculture export markets may be affected by the decline in growth in China, key labour personnel will not be able to get into our country, our residents who have been travelling in Asia will not be able to go to work for 14 days.
This will flow into lower tax revenues. I will keep our budget and cash management under constant review. I will give priority to to protect and build this country, as well as addressing any revenue shortfalls” the Treasurer said.
A major issue facing the country is poor management of the budget. It is one thing to have a good budget passed, it is another challenge to ensure a good budget is actually implemented.
A major concern has been the way that public servants appear to have taken over what should be responsibilities of Ministers in determining priorities. I have moved the Treasurer’s warrant authority approval process from a yearly one to a monthly one.
Before I issue the next months warrant, I want to know what the cash management plan is for the rest of the year. I also want to know how expenditure is tracking against warrants already issued.
“I met with my Australian counterpart Josh Frydenberg in Canberra on strengthening economic assistance between our two countries. This follows from the landmark K1 billion funding package Australia provided last year to assist the Marape-Steven’s budget in 2019 and support the budgetary and economic reforms started by this government.
The Australian Treasurer passed on his appreciation for the tremendous support being provided by PNG in response to the fires and drought in Australia.
“I also had discussions with the Australian Minister for International Development and the Pacific, Alex Hawke, which focused on building our relationships, strengthening labour mobility options and on-going support for building the capacity of our key economic institutions, such as the UPNG-ANU support program.
“My staff have already been working closely with the World Bank for US$100 million of funding to support important PNG projects. One project will focus on supporting urban youth employment by upskilling our young people to be the future of our country’s workforce.
The second project targets improvements in the health sector especially service delivery readiness and frontline delivery performance.
“These discussions with PNG’s longstanding development partners reflect the Marape-Steven government’s commitment to securing cheaper financing for the budget that best meets the needs of PNG.
The Australian loan has an interest rate of about 2.5%. The World Bank loans have an interest rate of 2% and include a 5 year grace period and a 30 year maturity. To take back PNG will require more cheap financing like this from other trusted partners throughout the year.
“This is a major shift towards seeking good, cheap financing rather than the expensive Credit-Suisse debt financing arrangements, and the expensive Sovereign Bond at 8.375%, of the previous O’Neill regime which the people of PNG are still paying for today ” said the Treasurer.
“As the year progresses, my priorities will continue on budget repair, as well as a greater focus on getting jobs and economic growth going again. I will spend more time with the business community seeking their ideas on how to improve PNG’s economic performance which has fallen badly in recent years.
This growth work will also include work on State Owned Enterprise reform, as well as actions to clarify the framework for new resource developments.
“I am a proud, successful PNG businessman. I look forward to working with other businesses and the wider community to really get growth going again in our country in the 2020s” said the Treasurer, Ling-Stuckey.
Minister for Treasury
29 January 2020