Treasury Minister Patrick Pruaitch has stated that the nation’s revenue will grow by some K10 to 12 billion in a full calendar year.
"Most people are already aware that a significant part of PNG’s strong economic growth in the past four years was directly related to the start of construction of the LNG project," said Mr Pruaitch. "It has also been stated often enough, by the Prime Minister and others, that the economy next is anticipated to grow by a record 21%, making it one of the fastest growing economies in the world," Mr Pruaitch said. "The project has employed several thousands of Papua New Guineans in recent years. Now that LNG exports have started, the nation’s export revenues will grow by some K10 billion to K12 billion." The Treasurer said these revenue flows will greatly boost PNG’s balance of trade with the inflow of US dollars from LNG exports contributing to the strengthening of the kina. "It has been stated often enough, and debated in the media and elsewhere, that PNG needs to guard against ‘Dutch Disease’ caused by the strengthening of the kina in the face of surging LNG revenues. "It has been stated that part of the reason for the government’s decision to set up a Sovereign Wealth Fund has been to try and cushion some of the negative impacts of ‘Dutch Disease’. "It took almost one year to negotiate the PNG Gas Agreement, which was signed on May 22, 2008. Oil industry leaders have acknowledged the public consultation process undertaken by the PNG government as being the most extensive of its kind anywhere in the world. "Government leaders and community representatives spent six weeks in Kokopo to conclude a detailed Umbrella Benefits Sharing Agreement with several more weeks spent in a similar exercise involving the Local Level Benefits Sharing Agreement. "These deals will see hundreds of millions of kina flow every year to landowners in five provinces as well as to the relevant provincial and local level governments. "In addition the government re-imposed an additional profits tax that would ensure that windfall earnings from sudden price hikes will be equitably shared between the project partners and the government and people of this nation." The LNG project will provide the economy with wide ranging social and economic benefits and this has been obvious even before the first LNG shipment left our shores days ago. Mr Pruaitch, who was responding to attacks by critics, including the deputy Opposition Leader Sam Basil, said: "It is mischievous for Mr Basil to claim in the media that the Treasurer was unable explain how the LNG exports, as he put it, ‘will positively add to PNG’s economy and of how it will improve the exchange rate’. "The deputy Opposition Leader went on to add that the kina was now trading ‘at an all-time low’, which is absolute nonsense," Mr Pruaitch said. Comments are closed.
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