Pruaitch lays the blame for recent failures

By Martyn Namorong

Speaking during the Speaker’s Summit on Wednesday, Opposition Leader Patrick Pruaitch warned against the politics of scape-goating of resource sector for Papua New Guinea’s social and economic ills.

“I am unhappy about the constant harping that PNG laws have been copied from overseas jurisdictions and that they are undermining the national interest,” Mr Pruaitch said.

Mr Pruaitch pointed to the fact that unlike Australia, PNG laws enable state equity participation in both minerals and hydrocarbons.

PNG’s Oil & Gas Act enables the PNG Government to buy a 22.5% stake in any oil or gas development. It includes provisions not seen anywhere else in the world. Besides royalties paid to landowners, a development levy provides additional revenues to Provincial and Local Level Governments.

“In virtually all Commonwealth countries, resource project royalties accrue to the State. In PNG, they go directly to landowners, an initiative that was directly driven by the late Hon. Anderson Agiru, a true son of Hela,” he said.

The late Anderson Agiru spearheaded the 1998 Special Parliamentary Committee on Oil and Gas and made recommendations for changes to the then Petroleum Act. Agiru put his heart and soul into carving out the Oil & Gas Act, and it is a grave injustice to credit the work of this great Papua New Guinean to an unknown foreigner. It was Agiru himself who, subsequently in Kokopo, spearheaded the goal of acquiring additional equity in PNG LNG for project landowners.

Mr Pruaitch reiterated the fact that it is the role of the government to deliver public services to the people.

“I am not aware of any part of the world where mining and petroleum companies deliver education, health and social services,” he said.

Mr Pruaitch stated that PNG’s current difficulties with delivery of goods and services were the result of poor economic management by the previous O’Neill regime also referred to as the Clowns of Crown.

He said that rather than killing the goose that lays the golden egg, the government should reflect on how Clowns of Crown squandered massive revenue growth.

When the O’Neill Government took office in 2012 it managed a record K9.7 billion National Budget. In the intervening period to 2018, government revenue and grants increased by an amazing 45%.

“According to the 2018 Final Budget Outcome released a few weeks ago, government revenue and grants last year hit an all-time record of K14.1 billion,” Mr Pruaitch said.

“So how can we, in the Opposition, believe the nation faces an economic crisis when Government revenue was K1.3 billion more than projected revenues in the 2018 Budget and K2.6 billion more than it was in 2017.

“Virtually any country in the world would have been over the moon with such windfall revenues,” he said.

In PNG’s case, the country got deeper into debt and the government failed to pay for goods and services it purchased.

“The heart of this crisis is simple, “Pruaitch added.

“The O’Neill Government was incapable of living within its means.

“It squandered unsurpassed revenues and borrowed and spent an additional K17.1 billion.

“Debt in 2018 hit a record K25.6 billion, rising from K8.5 billion in 2012.”

The previous NA-led Government had lowered the debt burden, while progressing significant economic growth and diversification. By contrast, the O’Neill Government has overseen falling employment and incomes and a lack of capacity to deal with natural disasters and economic downturns.

There is a danger that current plans, which are driving away foreign investment, will hurt government revenues in the year ahead amidst fears regarding a slowing of the world economy.

In its latest PNG Economic Update, the World Bank warns that “persistently low net inflows of Foreign Direct Investment (FDI) indicate a largely unfavourable business environment”. Recent policies, the World Bank warned, will further erode the PNG’s image to foreign investors.

Mr Pruaitch said the government, the community and business sector should work cooperatively in a win-win strategy. This will underpin economic recovery, along with economic diversification and sustainable medium-and longer-term growth.

Such a strategy, he said, will reduce widely experienced poverty levels and keep alive ‘the richest black Christian nation’, aspiration to which Prime Minister Marape subscribes.

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