Economy. Papua New Guinea press review

People’s National Congress (PNC) Party Leader and former PNG Prime Minister Peter O’Neill has raised concerns about the state of Papua New Guinea’s (PNG) economy, citing a recent independent report by ANZ Bank on the national economy, with the report’s main finding being a multi-billion Kina shortfall in budget funding, making spending cuts inevitable. The report confirmed that failure to conclude negotiations on major resources projects, including P’nyang, Wafi-Golpu and Porgera, will result in «irreversible damage to the economy», Mr O’Neill said. «This independent economic assessment has confirmed the worst fears in the country that the government is out of options to fund the budget, and now our people will suffer for no other reason but incompetence […] To put this in terms of what it means for the men, women and children of Papua New Guinea, there will be drastic spending cuts on vital services in areas such as education, health, police, judiciary and many other areas», former PM marks. [1]

Mr O’ Neil also noted that the Government is continuing to operate under an illegal 2020 National Budget that has not been certified. According to Ialibu-Pangia MP, it was almost nine months after the Budget was passed by Parliament and now Treasurer Ian Ling-Stuckey failed to release the Mid-Year Economic and Fiscal Outlook (MYEFO). Peter O’Neil claimed that this was again in breach of the Fiscal Responsibility Act and added that the failure to certify the Budget, as should be published on the National Parliament website, meant all government funds were currently being spent without legal authority. Mr O’Neil also meant that many of the loans taken out by the Government, including domestic bonds from PNG companies, were potentially illegal: «While the treasurer is trying to have the MYEFO altered before its release, it is known within economic circles that the report reveals the extensive borrowing over the past year […] this government has significantly exceeded the legal 45% debt to GDP level». [2]

However, Prime Minister of Papua New Guinea Hon. James Marape said that Peter O’Neill has become a real doomsayer for the PNG economy. «There will not be budget cuts of K2.7 billion [US$765,3 million] […] He ignores his disastrous economic legacy and the world-wide implications of the Covid-19 pandemic. He then talks down the PNG economy. He lacks any specific budget details on how to get PNG out of its current very difficult situation […] So let me challenge Peter O’Neill to say where he would cut the budget? Can he set out in detail where he would make the K2.7 billion [US$765,3 million] in cuts that the ANZ say are ‘inevitable’? […] The Treasurer has already talked of the K2.2 billion [US$623,59 million] hit in revenue expected from Covid-19 – and this will be updated in the MYEFO released at the start of the August sitting of Parliament [25 August]. Treasurer Ling-Stuckey talked of sensible approaches in filling this budget hole – not just budget cuts. For example, he talked of working to get assistance from the wider international community as well as increased domestic financing», Hon James Marape claimed. [3-4]

PNG Prime Minister Hon. James Marape announced the signing a Memorandum of Understanding (MoU) this month with Bank South Pacific (BSP) and National Development Bank (NDB) regarding the K200 million relief package for businesses: K100 million go to Bank South Pacific; K80 million to the National Development Bank; and K20 million to the Department of Commerce and Industry. [5]

At one of the largest gold mines of the world, Lihir Mine in Papua New Guinea has confirmed the first cast of COVID-19. Mine operator Newcrest Mining Ltd (Australia) confirmed a 30-year-old male. The case is of a mine employee who had flown in from Port Moresby on the 30th of July 2020. COVID-19 case was detected during the routine screening process for all incoming workers. This is also the first case for New Ireland Province. [6-7]

However, mining operations at the Lihir mine remain unaffected despite a positive case declared, because the person did not attend any workplaces, and did not interact with the workforce therefore there is no risk to the virus spreading outside of the isolation camp. Everyone he communicated with have been isolated and have been tested, all of which have come back negative. [8]

A major PNG airline Air Niugini will only take flight bookings with the COVID-19 Controller David Manning’s approval.
The new measures introduced by Air Niugini include:

– All passengers intending to book domestic travel from Monday morning will be provided an Approval Request Form to complete. This form is available online(www.airniugini.com.pg), and at Air Niugini sales offices and travel agents.
– Upon completion of the form the sales office/travel agent will forward the form on your behalf for the Controller’s assessment. Intending passengers must allow up to 48 hours for submissions to be processed by the Controller, with advice of the outcome within 48 hours of submission;
– If approved by the Controller, the passenger can then complete your domestic booking and payment at the Air Niugini sales office, or at travel agent. [9]

In turn, another PNG airline PNG Air Ltd announced that it anticipates having its 2017 and 2018 financial results made available next month. It’s expected that audited accounts will be made available towards the second half of September 2020. Earlier PNG Air Acting Chief Executive Anthony Pereira said that an independent chartered accounting firm in Australia had been engaged review of the audited results, and the airline was profitable. It was also reported that Air Niugini plans to acquire the share in PNG Air Ltd. [10]
[1] https://postcourier.com.pg/oneill-budget-shortfall-worrying/
[2] https://www.thenational.com.pg/oneill-national-budget-illegal/
[3] https://postcourier.com.pg/pm-marape-says-anz-banks-economic-report-flawed-incorrect/
[4] https://www.thenational.com.pg/anz-report-flawed-pm/
[5] https://www.thenational.com.pg/govt-banks-to-sign-deal-regarding-relief-package/
[6] https://emtv.com.pg/lihir-mine-records-one-covid-19-case/
[7] https://postcourier.com.pg/lihir-mine-reports-a-covid-19-case/
[8] https://postcourier.com.pg/mine-spokesman-says-lihir-operations-unaffected/
[9] https://postcourier.com.pg/ang-introduces-new-flight-measures/
[10] https://www.thenational.com.pg/png-air-to-release-2017-2018-financial-results-next-month/

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