PAPUA New Guinea’s prime minister Peter O’Neill has admitted to PNG Today that the country is going through challenging times.
He has blamed PNG’s increasingly dire economic problems on the downturn in commodity prices.
“The price of copper, silver and tin has halved. And the price of LNG has fluctuated to where it was in 2012,” Mr O’Neill told PNG Today.
“I appreciate these resource price downturns are impacting government revenues, but they are also having a real impact on our private sector, especially on resource developers, contractors, suppliers, and on employees.
“Our government is not looking for business to fund shortfalls through tax increases. Know that business must continue to grow and governments cannot continue to impose constraints.
“To deal with the revenue reduction our government has cut recurrent and unnecessary spending. We have deferred projects that are not a priority and do all we can to return our budget to surplus.”
Mr O’Neill went on to claim that “the fundamentals of our economy are very strong”, an assertion disputed by economists who say the government has not adequately addressed its budgetary problems.
Economists also challenge the PNG government’s view that its debt level is “manageable and on a global scale is more than reasonable”.
In seeking to defend his government’s performance – a defence that did not mention the draining effects of corruption and mismanagement - Mr O’Neill also made the dubious statement that Australia and New Zealand were facing similar challenges.
In PNG Attitude yesterday, Opposition leader Don Polye said the government “does not have any strategy to bail out the country from its economic dilemma.
“He [O’Neill] is only good at spending, borrowing and selling sovereign bonds,” Mr Polye said.