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O'Neill admits PNG facing hard times. But where’s the strategy?


PAPUA New Guinea’s prime minister Peter O’Neill has admitted to PNG Today that the country is going through challenging times.

He has blamed PNG’s increasingly dire economic problems on the downturn in commodity prices.

“The price of copper, silver and tin has halved. And the price of LNG has fluctuated to where it was in 2012,” Mr O’Neill told PNG Today.

“I appreciate these resource price downturns are impacting government revenues, but they are also having a real impact on our private sector, especially on resource developers, contractors, suppliers, and on employees.

“Our government is not looking for business to fund shortfalls through tax increases. Know that business must continue to grow and governments cannot continue to impose constraints.

“To deal with the revenue reduction our government has cut recurrent and unnecessary spending. We have deferred projects that are not a priority and do all we can to return our budget to surplus.”

Mr O’Neill went on to claim that “the fundamentals of our economy are very strong”, an assertion disputed by economists who say the government has not adequately addressed its budgetary problems.

Economists also challenge the PNG government’s view that its debt level is “manageable and on a global scale is more than reasonable”.

In seeking to defend his government’s performance – a defence that did not mention the draining effects of corruption and mismanagement - Mr O’Neill also made the dubious statement that Australia and New Zealand were facing similar challenges.

In PNG Attitude yesterday, Opposition leader Don Polye said the government “does not have any strategy to bail out the country from its economic dilemma.

“He [O’Neill] is only good at spending, borrowing and selling sovereign bonds,” Mr Polye said.


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Terence Singal

Financial crisis due to poor management.

Anthony Morant | Facebook

In PNG's case, it's always someone else's fault when we're facing the difficulties we're experiencing right now.

Peter Kranz

Well Mr O'Neill must be relatively satisfied that PNG has maintained it's score of 25 over the last four years in Transparency International's index of perceived corruption.

The ranking goes from 1 - 100 - 1 being the most corrupt, 100 the least. It's a complex and subjective measurement as TI themselves point out, noting that some high scoring countries have businesses which operate in and perhaps facilitate the low score of other countries.

Corruption by its very nature is all but impossible to measure objectively.

So no one comes out squeaky-clean.

But a score of 25? Frankly Mr O'Neill, we DO give a damn.

Joe Herman

In the 1970s we had one mine, the Panguna copper mine. We relied predominantly on agriculture for export revenue. Things were relatively good. Today we have several mines and the economy is a shambles. What happened?

Paul Barker | Facebook

Much of the Asian region and resource dependent African nations are also suffering from the low commodity prices, reduced demand and the El Nino. PNG's just somewhat worse affected by some somewhat cavalier economic (including monetary) management, over-expenditure, heavy borrowing and poor utilisation of public expenditure, so that there's limited economic and social benefit. Most of the overall policies were sound, but often sidelined and application poor.

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