CANBERRA – Papua New Guinea’s new treasurer and deputy prime minister, Charles Abel (pictured), has released the promised 100-day economic stimulus plan (read it here).
Overall, there are some positives in the plan. But politics is already circumscribing necessary actions to get PNG back onto the right economic path.
Starting with the positives, even having a 25-point plan is a useful statement that the new government recognises PNG’s economic challenges.
The five elements of the plan are appropriate: fiscal discipline; revenue growth; strengthening the economic base; improving governance; and acting strategically.
There is a focus on raising revenues as well as fiscal discipline and population policy is given priority.
The plan announces the suspension and review of some scary micro-economic policies in areas such as land, agriculture, bio-security and mining.
Some politically brave action is foreshadowed to at least temporarily reduce politicians’ discretionary electorate spending (PSIPs and DSIPs).
There seems to be a commitment to ongoing sensible strategic budgetary and planning processes.
And there is no mention of the absurd ‘gold bullion bank’ which was raised in the Alotau Accord 2.
Unfortunately, the plan does not appropriately address the challenges and opportunities facing PNG (see my earlier article here).
Fundamentally, there is no shift towards more broad-based development. The ‘economic base’ section is a disappointing mix of known resource and power project prospects and aid programs.
Even in assessing the supplementary budget, there is a missing K2.7 billion in public debt repair required that is not explained.
PNG’s foreign exchange difficulties are misrepresented (rice and fuel are not the biggest drains on foreign exchange).
More will need to be done on the revenue side than is currently being revealed by the government.
I want to stay positive and to give the new treasurer a fair go. There are some positives in the plan. But there is a sense of a Sir Humphrey Appleby in the prime minister’s office thwarting the new treasurer’s aspirations.
A one-page sheet released four weeks into government dominated by a continuation of existing policies, projects, announcements and inaccurate spin in not a great plan.
The supplementary budget, the 30 September monetary policy statement and the 2018 budget will hopefully provide a better benchmark for assessing whether the government has actually learnt from its economic mistakes of the last five years.