Posted By Staff Reporter
FORMER PNG Prime Minister Peter O’Neill, responding to complaints by the current government about the loans he took during his reign, says: “I invested those monies to what was needed by our people.” “Since Independence in 1975, until when I took over government, PNG’s budget deficit stood at K8 billion. “When I took over, I increased that to K20 billion, with most of that money invested into infrastructure. “I can name all those projects we implemented all over the country.” O’Neill during his party’s candidate announcement for the Moresby North-West seat, Dr Thaddeus Kambanei, reminded the people what his government had done during his tenure as prime minister between 2011 and 2019. The People’s National Congress (PNC) party leader told the people about the infrastructural development his government had done. He assured the people that there was no doubt they would see those infrastructure such as roads, schools and hospitals further developed should PNC return to power after the general election. “I am happy to support Dr Thaddeus as I had worked with him for 20 years, and am aware of his vast experience in managing public offices,” O’Neill said. “I am aware of his loyalty, his credibility and is a God-fearing person.” O’Neill also said that with Kambanei’s credibility, if elected into parliament, it would attract foreign investors to work with people like him. “We want to see our people be employed, earn wages so that they can look after their families.” O’Neill had repeatedly spoken about the bad state the country was in let alone the economy and it needed to be rescued. He had told The National that health and education systems among others were also “collapsing”. Many hospitals around the country are struggling to have basic medicine and equipment, he had said. He stressed on giving confidence to the business community which seemed to have been lacking. Last week in Lae, Marape dared O’Neill to take him on in a live public debate to show what he had done during his eight-year term. Marape said he was willing to debate with the former prime minister (O’Neill) at either University of PNG or University of Technology. “I will bring my three years to the table, O’Neill will bring any three years to his table, where we will talk about inflation, loans and what we have achieved.” Marape's K20 billion Loan in 3 years
By Kessy Sawang These are FACTS from the Marape Government’s own books: 1. Marape Government immediately amended the FRA to increase the Debt to GDP Ratio from the highly criticized 35% to 45%. According to the Treasurer, so it can allow them to borrow more. 2. In 2019, Marape Government increased domestic debt from K16.9 Billion to K19.3 Billion and external debt from K9.9 Billion to K14.3 Billion. In just 7 short months, Marape borrowed K 8 Billion. Note that this is before Covid19. 3. Note that our total national debt end of 2018 was K25.6 Billion [see Treasury Final Budget Outcome Reports] within a conservative FRA legal limit of 35%. 4. In 2020, Marape Government increased domestic borrowing to K21.3 Billion and external borrowing to K18.6 Billion. This is a further increase of Debt by K6.2 Billion. This takes our national debt from K33.6 Billion to K39.8 Billion. 5. In 18 months [May 2019 – December 2020], Marape Government borrowed an extra K14.3 Billion. This increased our Debt from K25.6 Billion incurred by previous regime in 8 years to K39.9 Billion. 6. Before passing the 2021 Budget, the Marape Government again amended the Fiscal Responsibility Act to increase the Debt to GDP Ratio from 45% to 60%. This gave the Government the fiscal space to increases our National Debt to K46.5 Billion – a 51.5% Debt to GDP. 7. The high expenditure 2021 Budget is a K6.6 Billion Deficit Budget. This significant expansion of Debt is planned to be financed through: (a) External borrowing of K4.6 Billion [of which K2.4 Billion will be on concessional terms and K2.2 Billion “yet to be identified”]. Treasurer boasts about cheap loans but external financing should be a temporary solution. Note also that conditions for concessional loans are pre-determined. (b) Domestic borrowing of K2 Billion through issuing of Government securities. As explained in my 2017 article, domestic borrowing comes at high costs as all Government securities must be held to maturity and cannot be traded. Thus, domestic public debt has a narrow investor base confined to the superannuation funds and financial institutions. 8. The costs of borrowing [interest costs] is a further K2.2 Billion, representing 12% of the 2021 Budget. 9. The huge expansion of Debt by Marape Government is to fund the re-current expenditure, rather than capital investments in economic projects that would generate economic returns for sustained growth. Long tokpisin bai mi tok olsem “dinau em dai mani – nogat win moni or profit blo em”. 10. We cannot blame the situation on Covid19 alone. First, Covid19 is both an economic and health emergency that did not have an “appropriate” policy. As a result, millions on taxpayer funds or dinau moni which we will repay has been squandered on things like finding a cure, and K600 Million on Covid19. The people of PNG deserve to see proper accountability of Covid19 funds. 11. Covid19 pandemic and the closure of Porgera Mine affected the PNG economy severely, resulting in a negative growth of -3.8% [from a 6% growth rate previously]. Of this, Porgera closure accounted for -1.3% [significant!]. Timing was foolish. Alas, the short term pain has prolonged into months with long-term gain not in sight sooner. Consequence: The future of PNG children has been mortgaged in huge Debt like never before in PNG’s history. Accumulation of K20 Billion in 36 months, effectively means PNG is incurring K579 million debt every month. As a person who has been very vocal about the last Government’s debt, today I hang my head in shame. The new Government that we had high hopes on has placed us in more devastating debt burdens like never before in PNG’s history. Continuous reliance on the resource sector has more uncertainty. Poor governance issues like abusing of power for private gains [eg, giving jobs to cronies church singing group member getting K236 Million inflated road contract, K10.2 Million controversial Coronavirus cure, dishing out cheques at Loloata Island camp, et al] are serious red flags that citizens must hold Government accountable. While O'Neill borrowed K20 Billion in 8 years to build needed infrastructure in the country, Marape has borrowed massive K30 billion in 3years only to fund the re-current expenditure, rather than capital investments in economic projects that would generate economic returns for sustained growth, Next : Mendi Flares In Colours In Candidates' Nomination Note: Let Your Views be heard : Send all your Political Commentaries to us through our email : pngfacts@gmail.com Share this
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