PNGBLOGS

by JACK KUMAN Prime Minister Peter O’Neill is telling us that the economy and government finances are in good condition. But the official numbers from Treasury and the Bank of Papua New Guinea tell a different story. They tell us that Papua New Guinea is rushing towards an economic and financial disaster. The numbers do not lie, unlike the Prime Minister. Since he grabbed power in mid-2011, the economy and government finances have got worse and worse until today the Government is virtually bankrupt. Now the Prime Minister and his partners in crime have resorted to stealing from State-Owned Enterprises to try to prevent a complete financial crash. They have demanded hundreds of millions of kina, including from LNG landowners’ funds held in NPCP and reserve and operating cash from National Fisheries Authority and MVIL. This is in addition to the hundreds of millions of kina already drained from SOEs last year and earlier this year in fake “dividends”. O’Neill’s corru

by PAUL FLANAGAN   The PNG Government released its Mid-Year Economic and Fiscal Outlook ( MYEFO ) on Monday – the update on the 2015 budget. The estimated budget deficit for 2015 blows out from an already high budgeted 4.4% of GDP to 9.4%. This would be the highest in PNG’s history. Public debt levels are expected to skyrocket from the earlier estimate of 27.8% of GDP to 41.3%. In Australia, such a rapid change in the estimated fiscal position would go well beyond being termed “a budget crisis”. PNG’s official figures are much worse than at the time of PNG’s last economic crisis at the end of the 1990s (see graph below). PNG expenditure and revenues as a share of GDP – with updated figures from 2015 MYEFO Note: The gap between the lines indicates the size of the government deficit or surplus. Both lines exclude grants (aid). The drivers for the rapid deterioration in PNG’s fiscal situation are the fall in international commodity prices, a growth slow down as well