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Government of the non-taxpayers

MICHAEL KABUNI
| Academia Nomad

No dollars and sense

PORT MORESBY - After 20 years of operation, Heli Solutions has shut down. The local company couldn’t survive fuel shortages and a lack of foreign currency.

But there was a deeper problem. Poor decisions by politicians—especially by the prime minister.

In 2019, when the gold price was at its peak, James Marape shut down Porgera, one of the region's biggest mines and a major source of foreign currency for PNG.

The mine reopened four years later, but its underlying issues had not been fixed.

Since then, it’s had repeated shutdowns and racked up more costs trying to stay afloat.

The fuel shortage can be traced back to how the government handled the Puma Energy case.

Puma was the only company in PNG with facilities to import, store and distribute fuel.

But when Puma asked for more foreign currency to buy fuel, the central bank refused so, without foreign currency, Puma couldn’t import fuel.

This led to a standoff that continues today. Authorities accused Puma of money laundering but never presented evidence to prove this.

Why did the Bank of PNG deny Puma foreign currency? It said PNG’s reserves were too low.

PNG needed higher reserves to pay off debt, which needs to be paid in foreign currency.

Even if PNG has plenty of kina, if it lacks dollars it will have problems buy goods and servces from overseas.

And, right now, PNG has neither enough kina nor enough dollars.

So, who is it that’s been borrowing all this money? Yes, the government of Papua New Guinea.

The government elected by the people who, during elections, get free handouts—like lamb flaps, SP beer and church donations.

Only about 15-20% of Papua New Guineans pay taxes. The rest are unemployed and don’t pay taxes.

The majority of voters (80-85%) don’t pay tax and that’s how PNG elects governments that represent the unemployed, non-taxpaying majority.

Meanwhile, the taxpaying minority—those who work and pay taxes—shoulders the burden. Apart from resource revenues, this small majority funds free education, service improvement programs and even MPs’ haus krai [funeral] contributions.

Now, with Heli Solutions shutting down, 65 more taxpaying workers have lost their jobs.

When riots ripped through Port Moresby in January 2024, it was the mostly non-taxpaying crowd caused destruction and left many tax paying workers without jobs.

The tax paying workers who are the people funding the free education of the rioters’ children.

So you can see that PNG has two massive money problems: the non-taxpaying citizens deciding who leads the country and the leaders they elect being corrupt and irresponsible.

And who pays the price? The shrinking minority of hardworking, taxpaying Papua New Guineans.

Comments

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Lindsay F Bond

Neat statement on 'price' (that is to say, an expectancy), but the matter most essential will become 'net cost'.

Small cropping and fishing may sustain the many who make a population, yet popular expectations in 2025 are most surely vastly to exceed the sourcing of food, such as in health, welfare and education.

The name Stalin became associated with the words Soviet and starving.

The name Papua New Guinea is linked as yet to independence and free.

Question is will a population freely volunteer to be dependable in sharing cost?

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