Peter O'Neill Continues to talk down PNG Economy, says PM Marape

 Former PNG prime minister Peter O’Neill has become a real doomsayer for the PNG economy. He ignores his disastrous economic legacy and the world-wide implications of the COVID-19 pandemic. He then talks down the PNG economy. He lacks any specific budget details on how to get PNG out of its current very difficult situation. So let me challenge Peter O’Neill to say where he would cut the budget? Can he set out in detail where he would make the K2.7 billion in cuts that the ANZ say are ‘inevitable’? You say there are ‘inevitable’ spending cuts in education, health, police and the judiciary. So where would you make them?

This is a very simple request. You are scaring everyone by saying that there will be K2.7 billion in budget cuts because that is what one bank says. So where would you cut? The Marape-Stevens government is smarter than listening to just the views of just one bank.

The ANZ bank report is flawed in that it fails to recognize that a government has different responses to a collapse in revenues driven by external circumstances. The Treasurer has already talked of the K2.2 billion hit in revenue expected from COVID-19 – and this will be updated in the MYEFO released at the start of the August sitting of Parliament. Treasurer Ling-Stuckey talked of sensible approaches in filling this budget hole – not just budget cuts. For example, he talked of working to get assistance from the wider international community as well as increased domestic financing.

This government has been delivering on raising the additional financing – such as the K1,258 million interest free, no conditions loan from the IMF obtained on 5 June 2020. The ANZ figures on domestic and international financing are abysmally incorrect. The report suffers major other inaccuracies such as assuming arrears are ‘safe’ as they are included under the ‘IMF’s program’. The repayment of arrears are safe because they are a Marape-Steven governments priority as part of its budget repair program. On the other hand, the IMF puts these payments in an “adjuster” category and excludes them from determining the core budget deficit. The report fails to acknowledge the stimulus impacts shown in the 2019 FBO of a major infrastructure boost to the economy through much greater levels of use of concessional loan financing, especially from the ADB, as well as much greater donor funding than expected. The report has an excessive focus on the resource sector – there is no discussion of the prospects of other sectors such as agriculture.

Peter O’Neill picks up this flawed report, and tries to talk down the economy and scare people with a claimed K2.7 billion in budget cuts. His ignorant and incompetent economic approaches of the past may have gone for the biggest budget cuts in PNG’s history during the greatest economic crisis this century because of COVID-19. So where would you have cut K2.7 billion former Prime Minister? Let us know, so that we can then compare that to what a sensible government will do in the Supplementary Budget.Once, again, what are the facts under O’Neill. In 2018, the PNG economy was in a recession. There was negative economic growth. Employment numbers were collapsing. He built up more of his K37 billion debt legacy. He failed in his response to the 2015 drought and frost crisis.

My government has been very open about the economic implications of the COVID-19 pandemic. My Treasurer, Ian Ling-Stuckey, has given a major economic update on the economy in every Parliamentary session – February, April, June. He will do so again in August. We have introduced the largest economic stimulus package in our nation’s history. We will continue to do what it takes to be responsible in responding to this crisis. There will not be budget cuts of K2.7 billion. Shame on you former Prime Minister for such scaremongering.

Statement

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