Treasurer Ling-Stuckey Lies - PNG Government Printing Money

 Treasurer Ling-Stuckey lies - Marape-Steven Government is Printing Money : Government must look forward not look on historical data

Papua New Guinea is now in the middle of an economic crisis, and instead of looking forward, the Treasurer is focused on looking backwards with hate and anger and fabricating lies to try and cast blame.

The Leader of the People’s National Congress Party, Hon. Peter O’Neill, CMG, MP, has condemned the Treasurer’s latest attempts to hide from his inability to deliver a plan to revive the economy, but continues to falsify historic economic data to try and shift blame from himself.

“In his recent statement to Parliament and in a press release, the Treasurer just talks about our government but in doing so attempts to distract attention away from the development that we delivered over eight years,” Mr. O’Neill said.

“While some might say his obsession with me is flattering, his lies are all about his fear at being exposed for a lack of real plans and inability to manage a crisis.

“With the Treasurer and his foreign advisers looking backwards to make excuses and false blame, instead of looking forward with solutions, they are simply trying to justify their incompetence and laziness.”

“The Treasurer’s incorrect claims about debt over the past decade are exposed by looking at the real debt to GDP data over that period, that is set according to agreed global standards.

“Just one year ago the debt to GDP limit was at 35 per cent, now this government have pushed this to an unsustainable 60 per cent debt to GDP.

“These are facts, and it cannot be denied that this government’s debt is skyrocketing and they have no plan on how to grow the economy to repay these massive loans.”

Mr. O’Neill said the Treasurer is lying when he claims the government is not trying to ‘print money’ by changing the Central Banking Act.

“This government is changing the law so they can take billions of Kina from the Central Bank, with no plans to repay this during the current financial year, and this is, by any international standard, is a policy of ‘printing money.’

“This is backed up by Business Advantage PNG in their report today highlighting the ‘moves for the central bank to print money to fund budget shortfalls.’

“The Treasurer cannot hide the fact that he is increasing the Temporary Advance Facility amount from 200 million Kina to over 1.5 billion Kina, and the critical point is that he is increasing the repayment period to 12 months.

“This is lending directly to government for funding a fiscal deficit and this is ‘printing money’ as the money will not repaid before the end of the financial year, and any independent economist will confirm this blatant lie from the Treasurer.

 “Even if this money was repaid before the end of the year from the other loans which the Treasurer claims are coming, there would be no need to increase the repayment period.

“As the current data reveals, there is still a revenue shortfall of nearly 3 billion Kina, and after less than 1 billion Kina in expenditure cuts, they still require over 2 billion Kina in addition to the already record level of financing in the 2020 budget.

“Make no mistake, this government is ‘printing money’ and this will reduce the value of the Kina and make our people pay more for most products from cooking oil and rice, to farming tools, books and clothes.

“The Treasurer has no intention of repaying this money, and this will be demonstrated in time, but our country does not have the luxury of time.

“Ultimately, this government is not receiving funds from partners for budget support. Most of the funds are being offered for COVID support and these are tied to COVID response projects which, in the main, are not in the Supplementary Budget.” (Further Details are in the Following Fact Sheet)

Peter O’Neill said the facts are clear, the current government has generated much more debt in just one year than in any year of any previous government, and most of the increased debt occurred prior to COVID.

“While COVID has had a negative impact on the economy, our Government weathered similar shocks from earthquakes to commodity price shocks, because we were proactive and did not panic as is happening now.

“We drove confidence in the economy by leading from the front, we continued to stimulate the economy through investment in infrastructure, and we reigned in spending.

“We drew on the great wealth of knowledge and experience in our senior government officials, who have an intimate understanding of our economy, not paying millions of Kina to foreign incompetent advisors as this Treasurer is doing.

“We pushed forward with large resource projects, and through APEC and other international engagement we brought business and investment into Papua New Guinea.

“Contrast our record to the dire situation today where they are likely to reduce government public investment to near zero, with the only investment coming in is from donor initiatives and many of these are not income generating.”

𝐹𝐴𝐶𝑇 𝑆𝐻𝐸𝐸𝑇 𝐶𝑂𝑈𝑁𝑇𝑅𝐼𝑁𝐺 𝐿𝐼𝑁𝐺-𝑆𝑇𝑈𝐶𝐾𝐸𝑌 𝐿𝐼𝐸𝑆 𝑂𝑁 𝐵𝑈𝐷𝐺𝐸𝑇 𝑆𝑈𝑃𝑃𝑂𝑅𝑇

The Treasurer claims that the international community is now more willing to support PNG with good, cheap, concessional financing – which is a vast exaggeration:

• The only funds received from the international community for budget support in 2019 and 2020 to date has been the Export Financing Australian loan for US$300 million received last year.

• The second tranche of the ADB Heath Sector loan was received in late 2019 but this was negotiated and signed off on by the O’Neill Government.

• The O’Neill Government also negotiated and signed off on a similar US$300 million funding from the World Bank.

• The second tranche of the World Bank loan was not delivered under the current government because of the World Bank’s complete lack of support for the Marape fiscal policies.

• The scheduled ADB Partial Credit Guarantee loan for budget support was also not forthcoming because the ADB did not support the Government’s fiscal position.

• The Australian Government programmed loan to replace the 12 month Export Financing Australia bridging loan, and to provide a substantive additional long term loan, has been very slow to negotiate and has been scaled back substantially to an additional US$100 million.

• The only other funds that have been received by the current government have been for COVID response.

• The IMF funds were provided out of PNG’s Special Drawing Rights allocations and were for emergency assistance. These are one-off funds which won’t substantively be available next year:

o The Treasurer is not being truthful in claiming that these funds have no attached conditions - these funds are tied to satisfactory progress with the IMF Staff Monitored Program which has a substantial number of restrictive conditions.

• The assistance being offered now from the ADB and World Bank, which the Treasurer claims will be coming in December, is all tied to the COVID response. These loans are tied to COVID-specific projects which, by and large, are not in the Supplementary Budget, so it is highly unlikely that the funds will be received this year.

For all of the above reasons, this Government has been desperate in trying to find money for the 2020 budget because very little of the programmed budget support has been received.

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