PNG’s debt now approaching 45% of GDP, well above the 35% limit set by the Fiscal Responsibility Act, Budget blowout forces O'Niell to bring forward 2015 Budget,
Peter O’Steal has done such damage to the national finances in the short time he has been in charge that he is now being forced to bring forward the 2015 Budget.
It was originally to have been brought before Parliament in the first or second week of this month’s sitting, but the Government is in such disarray that legislation has not been prepared.
Also, the Treasurer, who is ill with a "mystery disease", cannot get back to Port Moresby in time (another fat, greedy and greasy politician who has stolen enough money not to have to rely on the national medical health system, which is being systematically raped by Mr O’Steal and his cronies).
Bringing the Budget down this month would have the additional benefit of protecting Mr O’Steal and his closest political cronies and beneficiaries from the vote of no confidence being planned for this month’s sitting. The forthcoming Constitutional reference on the grace periods is expected to go against Mr O’Steal, giving him another reason to kill off Parliamentary democracy as soon as possible.
Mr O’Steal is so desperate about his dwindling numbers that informed sources say he has sought advice on initiating a state of emergency and suspending parliament - and there are fears about exactly what sort of emergency Mr O’Steal would create and what the consequences would be for innocent members of the public.
Mr O’Steal’s financial crisis has now become a catastrophe. His puppet Treasury Secretary has been going round Government departments informing them that the planned K2.3 billion deficit has now blown out by K700 million at least - it is now a whopping K3 billion and growing. The value of the kina continues to decline and prices to rise, increasing the suffering being felt by the poor citizens of PNG.
PNG’s debt is now approaching 45 percent of GDP, well above the 35 percent limit set by the Fiscal Responsibility Act. This will be Mr O’Steal’s legacy, plus the hardship and pain he has caused grassroots Papua New Guineans.
Mr O’Steal’s economic stupidity and his greed for self-enrichment through corrupt and illegal methods means he has to go to Parliament to get more cash - and this is now likely to occur in the first or second week of the November sitting. But if MPs do give him what he wants, 2015 will be even worse than 2014, with further falls in the value of the kina, more price rises and the possible exhaustion of PNG’s foreign reserves.
Then there are some other nasty facts that will further damage the economy and government finances in the near future, and further expose Mr O’Steal for the economic vandal that he is.
First is that the Government recently lost a court case in the NSW Supreme Court over payments of up to K300 million relating to the IPIC loan. The second is that he may be facing an international court judgment against him for stealing the Ok Tedi mine which could amount to billions of kina in compensation. The third is that he is relying on income from the LNG project, but this is not likely to exceed $US300 million next year, and this income itself may be tied up in more litigation and investigations over his illegal and suspicious Oil Search loan. As well, the domestic impact of the LNG project is falling sharply as the project is now tat project construction and commissioning is now complete.The fourth and final problem is that he expects to raise more tax next year, and this is likely to come from an increase in the GST to 15 percent. However he will have to lower personal income tax, so it is likely that tax revenue will remain static across the board compared to increasing GDP, as it has done for the past five or six years.
So the little conman has got nowhere to turn - there are disasters of his own making every which way he looks.
Part of the problem is his theft of Ok Tedi from PNGSDP and its beneficiaries, Western Province people. Since he took over and turned it into a State Owned Enterprise with his own puppets on the board, Mr O’Steal has caused its annual profit to fall from $US472 million in 2012 to just $US17 million in 2013, and he has offered no satisfactory explanation as to whose pockets all the money has gone into.
The rape of Ok Tedi by Mr O’Steal has contributed significantly to a predicted fall in mining taxes of K350 million this year, according to the Mid Year Economic and Fiscal Outlook Report for 2014.
MYEFO also discloses that non-mining GDP is expected to grow by just 1.1 per cent in 2014. This is less than population growth, so in other words ORDINARY PAPUA NEW GUINEANS ARE GETTING MUCH POORER UNDER MR O’STEAL’S INCOMPETENT ECONOMIC AND FINANCIAL MANAGEMENT.
Furthermore, it is well know that Government spending - the little money that is left over after Mr O’Steal and his cronies have taken their cut - is of very poor quality and more often than not wasted. And the contribution to development of State Owned Enterprises is virtually nil - some of them, notably PNG Power Ltd, are surviving only on Government handouts. The proceeds of privatisation are also likely to be dissipated if any sales go ahead next year - that is, what is left over after Mr O’Steal and his cronies take their cut from that as well.
Mr O’Steal has put Government finances and the economy into such disarray that the Governor of the Bank of PNG took the extraordinary step of telling the Prime Minister that he had better fix things quickly or it would be too late. There is much concern about the fall in the value of the kina while Mr O’Steal has been Prime Minister, which has gone from 49 US cents in October 2012 to a low of 35 US cents this week. Imports, and especially essential imports for locally made goods, have become prohibitively pensive for many Papua New Guineans and PNG-owned companies. Structural pressures are likely to continue to undermine the Government’s attempts to prop up the ailing currency.
Compounding the hardship and suffering being felt by ordinary Papua New Guineans, Mr O’Steal’s economic mismanagement has resulted in inflation likely to continue rising, from 5.5 per cent for the to 6.5 percent Other financial measures taken by Mr O’Steal are increasing the risks of local business closures and a consequent rise in unemployment.
Mr O’Steal has restricted the ability to buy US dollars, in a bid the preserve dwindling foreign reserves, and some local companies are struggling to pay their overseas suppliers. The Manufacturers’ Council of PNG said some companies are being told they can only buy in K5000 lots. “In one instance,” it said, “a company with a bill of K2.1 million ($US850,000) was told it would have to buy its US dollars in three or four instalments over 10 to 15 weeks.” The Council said there are hundreds of companies in the same boat.
These are the unpleasant facts that MPs must wrestle with when Mr O’Steal faces the music in Parliament in the coming weeks. They are in effect, deciding between the most corrupt and incompetent Prime Minister in PNG’s short history, and the very future of the nation itself and the way of life of all Papua New Guineans.