Polye tells Prime Minister O'Neill to redo 2016 budget
Polye made a similar call early last year to Mr O’Neill but was implemented late and that the country that failed to cushion the external, economic shocks, resulting in cuts in public expenditures.
Polye also called on the government not to make the same mistake again!
“In 2015 the Prime Minister and his government left the 2015 Supplementary Budget to the end of the year.
“The government lied to the people in 2015 that PNG LNG gas sales was based on a ‘Forward fixed contract price’ and would not be affected by the drop in the oil price,” he recalls.
Polye quoted the government as saying in 2015 that they were monitoring the commodity prices deepening situation and would take prudent action but in reality all their decisions and actions fell short of fiscal prudence or fiscal consolidation.
“The end result has been huge, unmanageable K26 billion deficit level which is unprecedented, disappearances of LNG gas sales, the Prime Minister lying about PNG LNG revenues being kept at BPNG and spending spree on unbudgeted, less economic areas.
“Additionally, the accumulation of costly commercial loans has been the norm in 2015,” a well-versed Polye said.
He said Papua New Guineans consequently have been deprived of their wealth and the opportunities available in 2015.
“Our people do not deserve to go through yet another stressful experience in 2016.
“The year 2016 is a year that will make or break the PNG economy, hence needs to be better managed from the very beginning as early as the first quarter of this year.
“I strongly suggest that the 2016 National Budget be reviewed and redone through a Supplementary Bill,” said Polye.
He said the reasons being;
The government’s 2016 Budget estimates are unrealistic and all based on speculative, expensive, commercial loans and foreign bond financing, which may never be successful or if successful it will be at a significant cost to PNG’s economy even before the first borrowed toea lands in our coffers.
The commodity prices are absolutely out of target, hence definitely the country will see a revenue downturn in the economy.
There are many unproductive money expenditure plans in the 2016 Budget that need to be curtailed and saved in order to be spent in the most priority sectors for economic growth.
Other projects in the pipeline like the Papua LNG and Wafi-Golpu mine among others may continue to be delayed by the fall in the commodity prices.
A significant amount of foreign currency orders are still put on hold and it is uncertain as to when a bulk inflow of foreign currency capital will occur.
“I propose that the 2016 be reviewed and be made realistic in relevance to the world and domestic economic conditions.
“I strongly propose that a comprehensive skills development program be introduced along with the skills development program, a commercial agriculture industry development be immediately given the top priority in parallel to developing real life-skills in all citizens.
“I propose that a new budget should be structured to reflect 25 per cent of the budget on Papua New Guinean skills development and a 25 to 30 per cent allocation be made to agriculture and other industries growth plans,” said Mr Polye.
He added that the remaining 50 per cent be targeted on a recurrent and a public service reform exercise.
“Unless the government changes with the tide accordingly, they will create a far worse situation in 2016 and in the end blame it on commodity prices downturn like they did in 2015,” said Mr Polye.
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