Transcript
After releasing the Final Budget Outcome 2016 report last Friday, Patrick Pruaitch said total government debt sat at a staggering $US6.6 billion. As recently as January, government said it was $US5.9 billion. Although he has presided over the Treasury for three years, Mr Pruaitch passed the blame on to the prime minister for allowing PNG to borrow beyond its means and wrack up a record level of debt.
"Our current government has been proudly boasting in its speeches that PNG was going to have the highest growth rate in the world. It failed to correct itself when this did not eventuate. All Papua New Guineans would be better off today if our government had given more consideration to the quality of its spending than in promoting extravagant projects built at highly inflated costs."
Mr Pruaitch said that despite government claims, the GDP growth rate had dropped in recent years.
"It is expected to fall again this year and to keep falling. I repeat: keep falling, at least for the next four years. It seems like the economy has virtually fallen off a cliff under the present government."
While Peter O'Neill is yet to comment, his Finance Minister James Marape has defended the government's record of developing infrastructure despite the heavy hit that PNG's economy has sustained since 2014 due to a prolonged commodity prices slump. In a statement he said the government had a five-year plan that had deficit as part of the way forward which the Treasurer was party to.
"We now know he had a political motive behind his lacklustre performance as Treasurer. The O'Neill-Dion Government is a consultative government and he was placed in the highest echelons to offer alternatives. If he ever had any alternatives, he chooses to remain passive, only to come out on the eve of the election with this huge campaign statement."
It is not unusual for PNG coalition partners to fall out spectacularly shortly before elections. Campaigning on the concern that PNG is facing its most serious economic crisis ever, opposition MP Sam Basil warned that the government has been struggling to pay its most basic bills.
"It's not only the United Nations fees, we also have problems with our state institutions not being able to have the funding, budgeted funds coming through from the government to pay the bills. We had the national Parliament that was cut out of power because they could not afford to pay their power bill."
Mr O'Neill told parliament last week there was no need to panic about debt.
"We need to continue to borrow money to build roads, build infrastructure, build schools, build hospitals, and most of them are concessional loans, meaning that less than 2 percent -sometimes 1.7 or 1.5 percent - interest rates are paid, over a very long period of time."
The prime minister's People's National Congress Party will still favour its chances in the coming elections, even if a coalition with Mr Pruaitch's National Alliance appears unlikely. But with PNG's public debt now at 258 percent of its 2012 level, Peter O'Neill's management of the economy is now the focus of public discourse.
