Political Opponents Blamed for Circulating False Maserati Allegations in PNG

According to economist Paul Barker, Executive Director of the Institute of National Affairs, the private sector, large corporations, and local farmers have significantly contributed to PNG's economic growth, job creation, and revenue generation. He noted that these stakeholders have boosted the economy, while the government has focused on creating favorable business conditions and essential infrastructure to support both citizens and the business community.

Paul Barker

Barker stated that while the government’s efforts in maintaining public goods and services, such as reliable infrastructure, education, and health services, are commendable, the imposition of high tax rates to fund public spending could discourage private investment. Additionally, the lack of all-weather roads and reliable public goods would harm business prospects and stifle economic opportunities.

In discussing challenges, Barker highlighted issues such as law and order and power supply, which increase the cost of doing business in PNG. "When these essentials are unreliable, they push up business costs and drive investments to other, more competitive nations," he said.

Addressing the significance of the upcoming 2025 National Budget, Barker emphasized the need for a balanced approach to avoid overtaxing a small formal sector of businesses and workers. He advocated for efficient spending on public goods while keeping debt manageable, as borrowing for essential projects is reasonable only if it generates positive results. He cautioned, however, that continuous borrowing to cover budget deficits, a practice ongoing since 2011, risks becoming unsustainable and could impede other budgetary needs.

Barker also expressed concern about the strain debt servicing places on foreign exchange, which businesses rely on. He pointed out that the Government had projected a 5.3% real economic growth rate for 2024 (4.7% for non-mining growth), although a similar forecast for 2023 fell short due to the prolonged closure of the Porgera mine. The recently published 2023 GDP report revealed the mine’s delayed reopening affected economic targets.

Looking ahead, Barker noted that 2024’s economic outlook remains uncertain, with setbacks from this year, including the January 10 riots and issues impacting Porgera’s progress, such as the Mulitaka landslide and ongoing regional conflicts. Rising costs and preparation delays have also slowed other significant resource projects expected to launch in 2024.

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Political Opponents Blamed for Circulating False Maserati Allegations in PNG