by SAM BASIL MP, Deputy Opposition Leader

The Opposition have always been critical of how Papua New Guinea’s (PNG) economy has been financially mismanaged by the O’Neill government and we still believe this, when the 2015 Pacific Games has placed a further financial burden on PNG’s economy.

As Deputy Opposition Leader, I do not question that all those associated with the 2015 Pacific Games, held here in PNG, should be acknowledged for a successful event given the short time span to organise; credit must be given to all these professionals, volunteers and sponsors for their commitment and determination.

But the reality check needs to occur when the Pacific Games have left PNG’s shores and we are reminded about the recession we are currently in, and the loans that the O’Neill government have exposed PNG to; both issues will be strongly denied by the O’Neill government through their media propaganda announcements.

What the O’Neill government won’t tell you, is that most major sporting events like the Pacific Games are a very expensive exercise for the host country and a major financial loss to PNG.

Since 2012, the three supplementary budgets of close to PGK2 Billion have gone to making sure these 2015 Pacific Games have gone according to plans and with success.

Since the O’Neill government has taken office, our budgets have exceeded deficit amounts, being paid off by exorbitant loans with no avenue to repay quickly, given the associated high interest rates.

The large budget deficits and loans are a clear indication that the current government are not seeing the long term financial picture of the current state of economy because they were seeing the short term gain, from Pacific/international attention and major spending associated to hosting the 2015 Pacific Games.

Time to the next elections and beyond, will determine how far the 2015 Pacific Games has contributed to a financial situation PNG citizens are currently facing, with high inflation and high unemployment rates married with depreciating exchange rates and low foreign reserves.

The warning signs of the economy’s current financial status has easily been dismissed and though we now have stadiums that’s visibly internationally recognised, the patriotism of seeing our athletes win medals at these venues will be easily forgotten if they lie abandoned and not utilised, for a combination of profit revenue and offsetting the losses gained from hosting the 2015 Pacific Games.

Sports Minister Hon Justin Tkatchenko and NCD Governor Hon Powes Parkop have publicly stated that PNG is ready to host the Commonwealth Games.

I do not doubt that given the efficient capacity and effective capability we have shown in appropriately managing the 2015 Pacific Games, we can but it usually takes minimum 10 years to recover financially from hosting a large sporting event such as this.

The sight of our stadiums gives us the authority to say we can host but it’s the financial implications associated with supporting a larger sporting event like the Commonwealth Games that has got me questioning the reality connected to Tkatchenko and Parkop’s statements.

Yes, we are proud Papua New Guineans and our nationalism has been unified by our athletes, topping the gold medal/overall medal tally on home soil and this alone, will strengthen us through the tough financial times ahead when the construction industry will dissipate because there are no more funds to develop future construction work with the drying up of major spending opportunities and the lack of liquidity facing PNG’s economy.

As Deputy Opposition Leader, I do not see any net economic benefit to PNG, for hosting the 2015 Pacific Games as how can the citizens of this country quantify claims that the stadiums we have built, only in Port Moresby, will have a lasting benefit on the PNG economy. I am sure retail sales will increase, as the confidence and patriotism associated with hosting the most successful of Pacific Games, is a testament to knowing our position, internationally.

But the O’Neill government will harness this as a “feel good” factor for political gain, at the expense of what our current economical situation is facing; a Recession that can be tantamount to PNG’s economy moving into a Depression, if we are not managing our finances appropriately.

With the 2015 Pacific Games gone, the O’Neill Government need to face the hard reality and put forth a supplementary budget, to factor in the economic shortfalls we are facing.

The O’Neill government’s propaganda regarding our economy needed a beacon that would make PNG’s citizens forget the current state of PNG’s economy; that came in the form of the 2015 Pacific Games and PNG rising to the challenge in the sporting arena.

But PNG is no longer earning the revenue that the O’Neill government has heavily relied and their heavy dependence on our oil and gas industry to prop up PNG’s economy made them borrow heavily, eg. The illegal UBS loan, and as Deputy Opposition Leader, I predicted these erratic forms of spending/borrowing has led to the financial mismanagement of an economy that is in the middle of a recession.

A call for the 2015 Budget to be reviewed and amended accordingly, must occur to cater for the losses in revenue PNG will experience, from the substantial decrease in international oil and gas prices.

The loss in revenue from the fall in oil and gas prices will impact heavily on PNG repaying the loans the O’Neill government has exposed PNG to and even with no checks and balances or reconciliations on the financial balance sheet of PNG’s economy in 2015, Papua New Guineans should expect this to occur again in 2016 as most financial allocations have not been followed through.

The appropriate financial controls put in place, for a country like PNG that’s rich in resources, to take advantage financially, has been manipulated and the weakening of valid solutions has only increased the nightmare PNG is facing, ie. inefficient mismanagement of PNG’s economy by the O’Neill-led government, their combined lies which contradict the real economic figures that PNG is facing as well as the combination of corruptive practices with largest overspending by any government of PNG.

The large borrowings by the O’Neill government, part of it going to the building of stadiums for the 2015 Pacific Games, has resulted in PNG now being a high risk country further affecting PNG’s credit rating and investor confidence; the government can only be blamed with PNG facing financial challenging times and the stressful effects its imposed on PNG citizens.

The spending disregard associated with the current O’Neill government in badly managing the economy, is already occurring as visibly seen in our economic indicators and Papua New Guineans aren’t blind to the lies because we are all suffering from this inefficiency, both individually and as a country.

We are now past the midway point of 2015 and PNG’s current state of the economy contradicts the content behind the announcement of the 2015 Budget.

In terms of liquidity, there seems to be a Government Funding shortfall from its own raising source at the Bank of PNG (BPNG), namely the Government Inscribed Stock (GIS’s) and Treasury Bills (T-Bills).

There is a visible fact that the O’Neill Government has failed in raising more than K2 Billion in the GIS and T-Bills since the announcement of the 2015 Budget.

This figure is increasing into the end of the 2nd Quarter of 2015, as quoted in the BPNG website and the weekly auction results, which reflects a substantial lack of liquidity in PNG’s economy.

This is evidenced when government sector workers are not being paid their fortnight salaries on time, parliamentary member’s have not been paid their DSIP fund allocations and government departments have not been given all their budgets, to perform duties and operations.

The lack of liquidity is not because the rates are not sufficient but because the PNG investment community and international community have lost complete faith in the economic management and repayment of these GIS and T-Bills by the current O’Neill government.

The hosting of the 2015 Pacific Games has become a beacon of motivation and demand for everything that is PNG so with its success, the Opposition hope that the lost faith can be restored, all because of the successes of our athletes in the 2015 Pacific Games.

By failing to raise more than K2 Billion in GIS’s and T-Bills since the 2015 Budget announcement, BPNG is assisting with O’Neill’s financial mismanagement of the economy by “printing money”, to purchase all the GIS’s and T-Bills that are not purchased by investors.

This will lead to massive inflation problems in PNG. The inflation forecasts will increase to 9% and this rather large inflation rate will further drive down an already negatively geared exchange rate of our currency.

This will mean that Papua New Guineans are going to pay more just to survive, from day to day, and with the average family not having enough funds, this will lead to greater law and order issues, higher unemployment and less certainty about the economy of Papua New Guinea.

There will be no clear and transparent delivery of what the people of PNG need in terms of service delivery and the current trend of O’Neill’s mismanagement of the economy is about to have a massive and immediate impact on every man, woman and child in Papua New Guinea today; that alone is enough incentive to review the 2015 Budget!

The timing for this to occur is eventful, given we have hosted the most successful Pacific Games in history and this has acted as a cushioning effect in what we are all currently facing, financially.

From this media announcement, PNG will realise what the Opposition already know, we now have a larger than expected deficit from the 2015 Budget of K16.1 Billion that will run increasing deficits into 2016 and into 2017 as there is no realistic plan.

The Opposition are not scared to demonstrate that the fiscal and monetary mismanagement of the O’Neill government is not looking after the ordinary man, woman and child in PNG in terms of service delivery.

Given PNG’s current economic situation, it has taken PNG’s athletes and our patriotism to their performances on home soil to make us forget, temporarily, what our economy is facing.

Thank you to the PNG athletes in the 2015 Pacific Games for giving us the dream to believe knowing that with our determination and strength as one country, that dream can be made a reality.

You alone have given us, the Opposition, the strength that through trials and tribulations we can succeed and the current O’Neill government should take lessons learnt from all of you and put our economy back onto the financial road to recovery…