PNG Prime Minister Peter O'Neill admits his country facing hard times
O’Neill said energy prices were hurting all exporters, thus affecting the Government’s revenue and the private sector.
He said the Government had “deliberately” decided against increasing business and industry taxes when it drew up the 2016 budget.
“From the highest levels in 2011 when we (Government) were receiving US$120 per barrel for oil, to the first two weeks of this year which saw the price dip below US$30,” O’Neill said.
“The price of copper, silver and tin has halved. And the price of LNG has fluctuated to where it was in 2012.
“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.”
He said “the fundamentals of our economy are very strong”.
“Our debt level is manageable and on a global scale is more than reasonable. To put that into perspective, PNG cannot exceed a 35 per cent debt to GDP ratio by law.
“PNG’s debt to GDP ratio is lower than Fiji, Malaysia, the Philippines and Vietnam that are all around 50 per cent.”
He said Australia and New Zealand were also facing similar challenges.
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