NEW TAX MASTERMIND TO BE APPOINTED BPNG DIRECTOR

by Mitch Renagi

Anti-corruption activist Andrew Arthur’s allegations against Treasurer Ian Ling-Stuckey and his high-paid Australian sidekick Paul Flanagan, in relation to the commission of inquiry into the central bank, are correct, and highly alarming.

The allegations, contained in an article posted in PNGBlogs, point to a breakdown of relations between the Treasurer,  his department and the Financial Sector.

The breakdown is having damaging effects on the management of the economy and the Budget, and is having flow-on effects in other areas of the finance system.

I can confirm that Ling-Stuckey and Flanagan are using the inquiry into the Bank of Papua New Guinea to get Flanagan and other Ling-Stuckey choices onto the board of the central bank, and to replace the Governor, Loi Bakani, with their own appointment.

The Treasurer will make Flanagan a director and replace Bakani and others under the Central Bank Amendment Act 2021, which was passed in Parliament recently.

There is no reason for the changes other than to remove Bakani and install Flanagan.

I can also confirm that Ling-Stuckey’s office has held at least one secret meeting with the inquiry after it was constituted in an attempt to sway the outcome. This amounts to political interference both in the inquiry and in the Bank of Papua New Guinea.

I call on the inquiry to state when and where those meetings occurred, who attended, and details of the conversations. The inquiry has a public-interest duty to provide the details.

I call on Ling-Stuckey to come clean on why he is appointing Flanagan ahead of many eminent Papua New Guineans.

He should also say why he is proposing to dismiss representatives of the broader Papua New Guinea community from their roles in the central bank. These roles are important accountability and transparency initiatives put in place by the former PM Sir Mekere Morauta.

They are anti-corruption safeguards against the very sort of political interference proposed by Ling-Stuckey.

Flanagan already has complete and unprecedented authority over the national economy and government finances, having been allowed by Ling-Stuckey to sideline the Treasury Secretary and his team of expert Papua New Guinean economists.

His command and control style of operating, usurping the role of the Treasury Department, is the reason for the unprecedented problems that beset Ling-Stuckey’s presentation of the 2022 Budget.

He presented it a day late, without tabling the all-important Volume One Economic and Development policies, and failed to post both Volume One and his speech on the Treasury web site.

The version of Vol One on the Treasury web site is labelled “preliminary”, so Ling-Stuckey and Flanagan have still not fulfilled their duty of accountability and transparency to the public on the national economy and finances. They should explain why the final version of Vol One is still not available.

No other Treasurer in PNG history has made such damning mistakes.

Flanagan is also responsible for the introduction of the new and highly damaging taxes on BSP (K190 million pa) and Digicel (K95 million pa). These taxes are in effect taxes on workers’ superannuation.

It is workers, more than anyone else, who will suffer under the burden of these new taxes.

Ling-Stuckey has tricked PM James Marape into saying he has deferred the taxes until after the election. Ling-Stuckey fully implemented the taxes in the Budget - only the collection has been deferred. This is clearly apparent in another PNGBlogs post, by Emmanuel Bobola

There is no doubt that Ling-Stuckey will start collecting them as soon as possible.

The taxes will have a severe impact on the superannuation sector and will result in big cuts to annual contributions to superannuation member accounts, and retiree payouts.

This is why, in the discussions Ling-Stuckey has been forced to have with BSP, Digicel and superannuation funds, unions have been excluded.

It is union members who will suffer most from the new Ling-Stuckey-Flanagan taxes, and they have demanded that Marape sack the pair. He must do that, or he will have this very harmful issue hanging over his head for the entire election campaign.

The failure of Ling-Stuckey and Flanagan in the first instance to properly consult with anyone - let alone unions and the superannuation sector, whose members will lose millions of Kina when they retire - is inexcusable. The current talks are fake talks, aimed at buying time until tax collections can start.

The issue raises important questions about Flanagan and his role and power, which appear to exceed those of the properly constituted authority - the Treasury Secretary.

He works for the Treasury Ministry, not the Treasury Department, yet he appears to be paid by the department - therefore by the very taxpayers whose super payments he is slashing.

Again, in the public interest I call on the Treasury Secretary to publish the details of Flanagan’s powers and authority, his terms and conditions of appointment, and how much he is being paid, including his extras such as office, car and accommodation.