by M.V LASIA PNG has recently made the headlines across the globe for being in a financial debt crisis and struggling to pay its debts and expenses. It is no secret the O'Neill Government has had cash-flow crisis and only managing to keep its head above water. What little tax income it earns each month is being used to ensure public servants are paid every fortnight and any difference is directed to propping up its free education policy and partly pay for its inflated contracts. Meanwhile Peter O'Neill claims the country's financial crisis has been caused by dramatic fall in world commodity prices placing a strain on economies around the world. So is Peter O'Neill telling the truth? Short answer is No. The PNG Government funds its operations, development projects and services its debt obligations through the collection of taxes and overseas grants (donor funding). Tax collection or revenue is categorized into three main parts. 1) Tax on Income and Profit
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Race to recovery: poorer and younger people will be the losers from a sustained budget crisis. by PAUL FLANAGAN The past year has been a year of poor public policy and misfortune for Papua New Guinea. The country ended the year in crisis management with cash shortages and budget cuts more severe than those in Greece's austerity package. Businesses are suffering from a lack of foreign exchange to pay for imports and sales are falling. Newspaper stories are increasingly of government cash shortages – funding not being paid to meet urgent medical programs such as drug resistant TB, teacher entitlements being deferred, superannuation contributions not being deposited, little being done to deal with the most severe drought since 1997. The international ratings agencies of Moody's and Standard and Poor'