IS PNG GOVERNMENT RUNNING OUT OF CASH?
I have been tracking this issue for sometime since September 2014 when a number of service providers made known their Government Cheques were bouncing.
I started to make inquires with my contacts in the Treasury and Finance Departments to confirm whether there was any truth in it.
Sadly the feed back was the Government had no funds and the Department officials were given instructions to go out and look for money. While many have been praising our Government for achieving so much people failed to put thought to where all this money was coming from or whether we could afford to be spending it all.
In December 2014 the Government failed to pay for the teachers leave pay. Opposition Leader Don Polye published it was because the Government had mismanaged the Country's funds.
Polye challenged Prime Minister to admit to the nation that the Government has run out of cash.
“There’s no money in the system, the private sector is under stress, there’s liquidity in PNG’s small domestic economy,” he said in Port Moresby yesterday.
“The Government cannot easily raise funds for its securities like the Treasury inscribed stock and the Treasury Bills.
“No wonder I see the public service and other important and fundamental systems of service now running out of money.” (extract pngfacts)
One would expect the former Treasurer to know what he is talking about if anyone would know he would, having full knowledge of the departments workings and contacts within the system.
My own sources also confirmed the Government is literally broke. International lenders are no longer prepared to give PNG any more loans. What money coming in is committed to South Pacific Games K30m a week and free education policy. Other than that there is no money, Provincial Government and Districts are yet to receive their grants for 2015 because there is nothing to give. Not until company tax receipts start coming after 31st March 2015.
So one is left to ask what happens when an organisation runs out of money, closed off from securing borrowed funds? The answer is it starts selling off its assets at fire sale (cheap) prices.
It seems the PNG Power state of emergency was all about priming it for sale. Prime Minister recently announced it planned to sell off half of Air Niugini. How many more of PNG people's assets will be sold no one knows. Last time PNC held government the countries' economy spiralled out of control we were forced to sell off PNGBC to BSP and Oregon Minerals to Oil Search. The country lost 100's of millions in assets that are now probably worth billions.
When Queensland Liberal Government took over from Labour it proposed to sell of its State assets (utilities, power, ports etc) to reduce its debt and deficit. This didn't go down well with the Queensland voting public who weren't prepared to sell off their future to foreign nationals. At the last State election the State Premier including his entire Government were voted out for even proposing it.
Will PNG allow our state assets to be sold off to compensate for the Governments reckless spending on inflated contracts all while politicians get filthy rich and everybody else ends up poorer for it.
One must understand every time million kina state assets are sold the middle man makes a bag of money all while hard working Papua New Gineans lose their job, kicked out of their accommodation and 30 years of service amounting to nothing all at the expense of overweight politicians.
The net effect of selling off the people's assets are prices go up people pay more. Makes one wander whether K1.5b spent on our games was such a smart idea maybe such funds should have been expended to fix our state enterprises and health system.
