50 PERCENT GST RISE IMMINENT, PNG SHOULD BRACE FOR POSSIBLE INFLATION
PNGBLOGS EXCLUSIVE
NEC sources have confirmed what PNG Blogs told you weeks ago - Prime Minister Peter O’Steal is planning a massive increase in taxation of the grassroots to make up for his destruction of the national economy and government finances. A submission is going to NEC for a huge 50% increase in the GST, from 10% to 15%. This will bring Mr O’Steal’s tax burden on ordinary Papua New Guineans into line with the richest countries in the world. It will hurt the grassroots most, it will kill small PNG-owned businesses and it will lead to severe job losses, but the rich and corrupt, like Mr O’Steal, will suffer the least.
The tax increase comes at a time when Mr O’Steal’s mismanagement of the economy and government finances is already leading to price rises - especially on basic items such as bully, tinpis and rice, medicine, household goods, clothes, shoes, diesel, petrol and zoom, virtually every essential item he Little Conman is inflicting on every man, woman and child in the country.
For example economists are also predicting that his rationing of US dollars to importers will very soon lead to big price rises in supermarkets, and some businesses being forced to close their doors. So an increase in the GST to 15% on top of that will be a killer blow for millions of Papua New Guineans.
But Mr O’Steal could not care less. It just means much more money in the Government piggy bank for him and his cronies to steal. Raising taxes is a way for the Little Conman to continue stealing taxpayers’ money - there is just more of it to steal.
Mr O’Steal is planning a small cut in income tax in an attempt to disguise the true damage to PNG families that his huge GST increase will cause. But that is only a small benefit to those who actually pay income tax. The vast majority of Papua New Guineans - who pay no income tax and who have little or no income - will be suffer the most pain from this massive GST increase.
The GST increase will form part of the Budget, which is to be brought down in the November sitting. The Budget is being written by his favourite crony, Dr Jakob Weiss, who is the Prime Minister’s private adviser, a board member of Ok Tedi Mining, an adviser to the Bank of PNG, and is closely associated with LR Group of Israel, which is secretly taking over control and management of many government functions, including national security and State-Owned Enterprises such as PNG Power Ltd. Much of Mr O’Steal’s economic damage and mismanagement can be blamed on Doctor Weiss, who was instrumental in the takeover of Ok Tedi, the illegal and highly suspicious PPL generator deal, the rationing of US dollars, and other dubious and damaging activities.
Political sources have also confirmed that once the Budget is passed Mr O’Steal will try to adjourn Parliament indefinitely so that he and his cronies can organise the result of the 2017 elections.
GST is the most punitive tax, and it always hits the poor hardest - the people who can least afford a tax increase. Unlike income tax, no GST has ever been decreased - once it is there it always increases. A much more effective way for Mr O’Steal to fix the economy and Government finances would be to stop corruption. But because that would involve him removing his own greedy snout from the trough, fighting corruption is not an option. His decision means that he and his cronies and other conmen will continue to steal almost half the budget (based on reliable estimates by the Minister for Works and Sweep Team head Sam Koim), leaving the grassroots with nothing.
All Mr O’Steal’s huge increase in GST will do is encourage further corruption and theft from the public purse, and discourage any attempt to cut waste, duplication and inefficiency in the public service and State-Owned Enterprises. It’s easy to imagine all the corrupt fat cats and O’Steal cronies in his State-Owned Enterprises cheering this steal from the poor, give to the rich Budget measure.
An increase in the GST would affect rich (and corrupt) people like Mr O’Steal the least, and poor (and honest) people the most. The grassroots would pay the full 50% increase in GST because they usually spend all of what little income they have on basic things such as food, housing and clothing. In contrast, rich people pay a GST only on a small proportion of their income because they spend a much smaller proportion on living expenses, and in the case of Mr O’Steal and his cronies hide it overseas. For grassroots people, the huge increase in GST would in effect be the same as a huge pay cut.
There is other very bad news for the grassroots because of Mr O’Steal’s economic and financial incompetence, recklessness and stupidity. Economic experts are now predicting that inflation - price rises - will increase from about 6% to 8% and more, as reported by PNG Blogs. They’re also predicting that the nation’s foreign reserves, which are being used at an alarming rate by the central bank to try to hide the worst effects of Mr O’Steal’s economic madness, will fall even further, to K5 billion next year.
And as PNG Blogs also reported last week, analysis by a leading economic expert shows that a complete national catastrophe is looming if Mr O’Steal and his fellow conmen and cronies are allowed to continue. The big risk is represented by a practice known as printing money to finance the Budget deficit. Essentially it means the central bank continuously lends money to the government through treasury bills, bonds and other financial instruments when the private sector cannot and will not buy these instruments.
Printing money is a slippery slope that will plunge PNG into an economic abyss: more rising prices and inflation, and massive debt. PNG’s national debt is now approaching 45% of GDP - totally outside the limit of 35% set by the Fiscal Responsibility Act. Just as Mr O’Steal has no respect for the law in his personal affairs, he has no respect for the law when it comes to management of the nation. Again, it will be ordinary people who will pay the price.
The central bank has agreed to buy any government financial instruments left over after the private sector has bought what it needs. And the private sector is not buying these instruments at the rate required by the Government. Therefore the agreement is a disaster: it means that the central bank is now providing almost unlimited financing for any deficit. It is printing money for the Government.
This and a number of other economic and financial decisions by the Government put the nation on the brink of ruin.
REMEMBER BILL SKATE WAS PNC, HE NEARLY RAN PNG TO THE BRINK, WHICH GOVERNMENT IS IN CHARGE NOW? PNC, AND WE KEEP GOING AROUND IN CIRCLES.
