The hope that still remains in ‘don’t stop believing’
The days when men were men and umbrellas ruled

Prime minister in denial about mounting national debt

Government debt to GDP 2006-2014MICHAEL J PASSINGAN | PNG Blogs | Edited

THE reckless and unnecessary borrowing of prime minister Peter O’Neill is hurting families and crippling the nation with debt that future generations must pay.

Under O’Neill, in 2015 actual government debt reached K18,571.40 per Papua New Guinean household.

That number will increase with new borrowings proposed by the prime minister, including the $1 billion sovereign bond issue.

Families must repay O’Neill’s debt whether they like it or not.

Repayment will require new domestic revenue raising and cost savings, including:

Higher personal and corporate taxes as well as a 50% increase in GST;

Increases in state-owned enterprise fees and charges such as O’Neill’s secret rises for all Motor Vehicles Insurance Limited services including registration and insurance;

A further decline in government services and outsourcing of service provision to the prime minister’s colleagues and cronies;

A fire sale of government assets and equity including state-owned enterprises such as PNG Power and Air Niugini to the prime minister’s colleagues and cronies;

Further cuts to essential spending in areas such as health and education;

Tighter limits on public service hiring and reductions in public service wages and conditions.

When O’Neill took office in 2011, official government debt was estimated at a sustainable K7 billion. Today actual debt under O’Neill has exploded to K27 billion.

In condemning the nation to poverty for many years to come, the prime minister may be breaking the law.

The official debt he admits to, approximately K17.8 billion, is 39.4% of GDP.

This is well above the limit of 35% for emergency situations set by the Fiscal Responsibility Act. It is even further above the general limit of 30% set by the Act.

But the prime minister is hiding the truth about this debt – it is in fact much higher than he says.

If borrowings such as the illegal and corrupt UBS loan, the Chinese Ex-Im Bank loan, borrowings by state-owned enterprises and contingent liabilities such as court settlements are taken into account, actual debt is K27 billion.

That is 59.7% of GDP.

It is on this basis that the unsustainable debt burden must be calculated.

It equals K3,506.49 for every one of the 7.7 million men, women and children in Papua New Guinea. It equals 18,571.40 for each of the families in the 1.5 million households of Papua New Guinea.

Comments

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 Lindsay F Bond

Is there some body "having a lend"? Often the words "having a lend" are associated with a joke played upon a person where that person has not yet understood that the joke is at their expense, or discredit, or merely discomfort.

My experience in a 'northern' region, is that most PNG people have great delight in being in on such a joke, when they are not the person who is at a loss. And, they are very very strong in "holding their cards".

So what of the person who is at a loss? If that person does not remain ignorant, then the options are to either "back off" or "match it" (whatever "match it" might mean).

Let no one be "court out". That is example of a joke at expense of the reader. The good news for readers of PNG Attitude is that, each reader is invited to respond. And there have been a not just a few who would rather flail than fail.

About being "court in" a game that leaves too many people powerless, there is yet hope. See reported in The National: "In Port Moresby on Monday, Justice Derek Hartshorne, for the safety and preservation of the planes, granted urgent orders directing Travel Air to ground the planes."

Court action is one way to resolve matters of commerce and industry, just as where, from one business, another business was found to be getting too much of a "lend".

If an employer delays wages payment to a worker, even for a day, then for each party, what is the lend, and what is the value?

If intention is on avoiding violence, for societies so steeped in traditions of payback, there will be many courting the prospect of retrospective recompense. But, how can each worker "match it" with a gavman employer?

Mathias Kin

Ya Vele is urine himself, my urine. Workers in many Departments are not paid their salaries. Bloody liar he is. PNG has run out of money. Vele and O'Neill are so very corrupt.

Daniel Ipan Kumbon

Its 12.00pm Thursday 18th February, 2016 and public service pay has not been paid into our accounts yet. It's the first time in my working life to have my pay delayed.

It's been always Wednesdays and sometimes paid in as early as Tuesday. If we (public servants) do not get our pay by today or tomorrow, I don't know what will happen.

But Treasury Secretary Dairi Vele said today in The National newspaper that PNG is not yet broke which he said was evident in the country’s strong and sustained economic growth rate of 9% since the O'Neill government assumed office in 2012.

He is stabbing struggling public servants in the ribs with these words. I wonder if Mr Vele knows that unscrupulous words are sharper than a two-edged sword. And that it smells and tastes like urine.

Michael Dom

I don't think the problem is that the "PNG is doomed and the kina will be worth nothing".

As for kicking out the expats who may be saying this, that's just snide, childish and immaterial.

I would rather kick out the scumbag fuckwit Pngian leaders who are fucking up my country.

I hope Elvina's uncles are just as ready to drive those fuckers to JI.

Someone can Tweet that for them.

The real problems, i.e. for those of us who actually live and work in the stinking fucking piggery that PNG is becoming, is helping our people crawl back out of the sewers that they keep getting kicked into.

Elvina, and and every other Twitter-ratty, if you want to help PNG, come and join me in the agriculture sector.

We have miles of pig shit to dig through.

Philip Fitzpatrick

Love that comment by Elvina. "To all expats saying PNG is doomed and the kina will be worth nothing. Please leave. I have uncles who will drive you to Jacksons International Airport".

PNG will muddle through Paul, it always does. O'Neill will eventually be a bad memory when people are dealing with the next despot.

Organising an insurrection in PNG is impossible, bit like trying to get a room full of Irishmen to agree with each other.

John K Kamasua

Trupela tok Paul!

Paul Oates

I wonder what might happen if this information was translated in Tok Pisin and broadcast to everyone or has that already happened?

Remember what happens to dictators come the revolution? Once the groundswell starts it will be very difficult to stop.

The PNG Opposition and moderates need to be ready with a plan to give the people hope and stability otherwise there will be chaos. Australia needs to be making contingency plans to help our neighbour rather than being held at arms length over Manus.

If total chaos does happen, the police and army will not be able to cope since they essentially can't now.

If only people in high places would start listening rather than acting like they know all the answers. Clearly they don't.

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