Immediate Priorities to Prepare for 2017 Elections 

By: Solomon Kantha 
Recommended to Electoral Commissioner in 2015

IMMEDIATE PRIORITIES TO PREPARE FOR 2017 ELECTIONS 

 

a) Improvement of Electoral Roll 
The electoral roll will be the key priority and will obviously require a proper, thorough and effective updating. The Electoral Commission will need to work closely with political parties, candidates, elected leaders, civil society and voters to get the buy-in to ensure a clean and updated electoral roll. It has to do more than just administering elections. Roll management needs to be configured so that any re-enrolment, updating and verification is conducted with centralized oversight, auditing and controls. More importantly, a dedicated roll management unit within the Electoral Commission headquarters must be set up and supported by the government as a specific program. There would also need to be transparent recruitment and performance management and regular auditing of province, district, and ward-based level staff.

 

Reasonably low-cost technology can compile (in the field) a digital Voters’ Roll that includes both photograph and fingerprints. Consideration will be given to requesting this technology and to trialling it in priority areas.  

 

b) Introduction of Voter Identification Card 
A voter ID card must be implemented for the 2017 elections and is the single most important device that can transform the election in the polling process by eliminating double/multiple voting, voting using ghost names, under-aged voting, impersonation and other aspects of electoral fraud. A basic voter ID card can be introduced with a photograph and finger print basic security feature and issued to every eligible registered voter. I have observed the use of a voter ID card in elections in other countries in the region and it has tremendously facilitated a successful election. The voter ID will have the basic particulars of a person such as an ID number, full name, sex, date of birth, province, district, electorate/constituency, and village. The voter will therefore vote in the electorate that appears on his/her voter ID. Apart from its use once every five years, the ID card can also serve the purpose of other identification for ordinary citizens to access banking, travel, pension, business and other services. The voter ID card will be reissued only if the person changes electorate or changes name in the case of a married female voter.  

 

A Voter ID Unit will be established to work on the voter ID card system and kick start the process for 2017 elections. A bid process can be advertised with the contract awarded to a consultant company to set up the IT infrastructure for the Electoral Commission to administer, register and process all voter ID cards. The process of the production of voter ID cards will be owned by the Electoral Commission. Once an eligible voter is registered the particulars of the individual will be automatically transmitted to the central system in the headquarters to process the person’s voter ID card.  

 

c) Improvement of Polling Process 
The polling process can be improved with the use of a voter ID card. An eligible voter will be required to produce their voter ID card to a polling official before casting their vote. In the event that a person presents their voter ID card but their name is not on the electoral roll, the person can still vote given the validity, authenticity and authority of the voter ID card. If the person for some reason does not have a voter ID card but their name is on the roll, the person can still vote provided that the person provides a valid and genuine form of identification such as a driver’s license or PNG passport. If the person’s does not have a voter ID card and their name is not on the roll, the person cannot vote. The use of the voter ID card against the roll will help to significantly reduce the number of eligible voters not voting if their names for some reason are not on the common roll as seen in the recent election.  

 

The process by which the indelible ink is used to mark the finger of a person after voting will also be changed. A person will have to dip their finger at least half-way into the ink instead of just a line on the finger tip. An appropriate ink for that purpose will be used and can last up to a month on the finger. This process will eliminate the practice of removing the indelible ink by using acidic fruits, bleach or other chemicals. 

 

d) Improvement of Counting Process 
Given the recent experience with the significant mistrust in the counting processes in the last election that led to a lot of delays, a regional/provincial rotational system of counting officials will be developed whereby counting officials from one region (e.g. New Guinea Islands) will be moved to another region (e.g. Momase region) to take charge of counting. All counting will be undertaken by officials not originally from the province so that the integrity of the process is respected by all parties/candidates of the particular electorate which the counting is taking place. A volunteer registration system can also be developed to recruit individuals in the provinces to be involved in the rotational system of the counting process, provided that these individuals have a neutral standing in the community. These are options that can be considered to improve and instill trust in the counting process.  

 

e) Promoting Minority Rights and Rights of Vulnerable Groups 
An awareness raising campaign would be conducted to promote the political rights of minority groups (women, people living with HIV/AIDS and disables), vulnerable communities (those affected by climate change, natural disaster or ethnic conflicts) including PNG citizens living/working abroad to participate effectively in the elections. The rights of minority and vulnerable groups will be reflected in legislation and/or policy. For the elections to be a truly democratic process, these groups of citizens need to be empowered to participate in the election process. To promote the rights of these groups a Goodwill Envoy who may be a popular international, regional or local musician/band or artist can be selected and sponsored for various awareness events leading up to the elections. 

 

 

MID TO LONG-TERM PRIORITIES 

 

f) Legislative Review 
The Organic Law on National and Local Level Government Elections is outdated and needs a thorough review to embrace the changes in society, evolving political culture and the needs and issues of this present time. The review will allow the Electoral Commission to effectively administer elections. A legislative review should consider issues such as: (a) political rights of citizens abroad, and minority and vulnerable groups in society; (b) introduction of a biometric and/or basic voter ID Card system; (c) the procedures of postal voting to allow citizens outside of country and those absent during election period from their electorate; (d) clearly defined roles of Returning officers, Assistant Returning Officers, Presiding Officers and Scrutineers; (e) a swift and inexpensive process of decision-making by Courts on election disputes and petitions; (f) enhancing powers of the Electoral Commission and; (g) setting reasonable limits to campaign expenditure. These are few of the major issues but there is a critical need to review the entire legislation so that it reflects the changes in the social, economic and political dynamics of the PNG. The review may also embrace some of the points discussed below in this proposal. 

 

g) Counting and Declaration of Election Results 
This process is proposed to be reflected in the legislative review where after the counting of all ballot boxes the provisional election results will be immediately provided by the Returning Officer to all candidates and political parties in an electorate. The candidates/parties will be given 72 hours to make a claim or appeal against the provisional results. If there are any claims/appeal against the winning candidate or provisional results, a special court much like the Court of Disputed Returns in each province will convene immediately to make a final decision within 7 days subject to evidence provided. After the Court’s decision the final results of the election will be officially tabulated and announced. This process will take not more than a week and the court’s decision is final.  

 

This process will significantly reduce the waste of resources, time, money and effort incurred by the State, aggrieved and declared candidates through the Court of Disputed Returns and allow the winning candidates to assume their mandates and immediately move on with the responsibilities in their electorate, province and at the national level.   

 

h) Out of Country and Postal Voting 
The Organic Law on National and Local Level Government Elections allow for the use of postal voting by PNG citizens living/working abroad however this process has never been implemented since 1964. Postal voting for citizens living abroad will be piloted in at least two countries (Australia and New Zealand) where there are a significant number of PNG citizens residing. Particular Diplomatic Missions of the country abroad can also be identified as regional postal voting locations (e.g. Brussels in Europe, Singapore in Asia, Washington DC in Americas and Canberra in the Pacific) whereby votes of citizens in that region can be sent to these Missions to forward on to the Electoral Commission. The Organic Law on Elections will be reviewed to have specific provisions on the eligibility of citizens abroad, the required proof of citizenship and the electorate by which they will vote for to allow citizens abroad to exercise their democratic and political rights. Electoral Commission will be working closely with the Department of Foreign Affairs and PNG Immigration & Citizenship Service Authority to implement this initiative.  

 

Postal voting will be conducted and postal ballots received by the Electoral Commission a week prior to the nation-wide polling schedules. An electoral officer will be seconded to PNG consular offices overseas in the period of postal voting and will be responsible for administering the process. The process of postal voting will also be implemented for those citizens that may be traveling during the election period, those that will be engaged in providing security (e.g. Police and Defence personnel) during elections and those that are sick, disabled or unable to vote in person for reasons beyond their control.    

 

i) Defining the role of election officials 
The Returning Officers, Assistant Returning Officers, Presiding Officers and Scrutineers play a very important role particularly in the counting process and their roles need to be clearly defined in legislation if not in policy. Experience in previous elections as well as the last election has shown that the counting process can be easily hijacked if the roles of these officers and their powers are not clearly defined and demarcated. While scrutineers in particular play a vital role in ensuring that ballot papers are clearly allocated and votes counted they should never overpower the Returning Officers and disrupt continuity of counting process especially in light of timeframes that are set for the declaration of results and return of writs. Nevertheless, clear processes and procedures must be in place for the grievances of scrutineers to be effectively taken into consideration. The legislation and/or policy would be revised to improve a clear coordination and understanding of roles and responsibilities between these officials.  

 

j) Enhancing the enforcement powers of the Electoral Commission 
The legislative review will also take in account and enhance the powers of the Electoral Commissioner to suspend elections or polling and counting processes if there is a critical security risk and widespread violence that affects or prevents citizens from freely, fairly and safely participating in the election process. The people must learn to respect democratic election processes and until they respect that process they will not have a representative in Parliament. The Electoral Commissioner must have the powers to put on hold the election process in an electorate or province indefinitely in the case of widespread violence and electoral fraud until the people come to a compromise to guarantee a free, fair and safe election.  

 

In the elections conducted over the years the Electoral Commission has never taken a strong stance in prosecuting cases of electoral fraud and abuse. Candidates can sign up to the rules of “fair play” and to provide speedy and effective processes for dealing with breaches of electoral laws. Accepting the need for independent scrutiny by the Courts, the Electoral Commission should be able to act as Plaintiff, not just as Defendant, in enforcing electoral law. Consideration will be given to establishing a special “Election Tribunal” with election and legal expertise to consider breaches of the electoral laws during elections. If the Electoral Commission had reliable evidence of a person breaching the campaign laws (for example, bribery) it should apply to remove the Candidate from that election. If the vote had already taken place, the first preference would be removed just as if that candidate had been eliminated, and other preferences re-allocated. The new message needs to be: breaching electoral rules is not to your advantage. The old message effectively was: anything that improved the chances of winning was acceptable. 

  

k) Limits on campaign expenditure 
To prevent domination by only the wealthiest in elections, many countries have reasonably effective limits to campaign expenditure. Without clear rules spelling out acceptable expenditure and banning “traditional gifts”, such limits would be completely unviable in PNG. All politicians and indeed their communities should share an interest in setting effective limits on campaign expenditure. I accept, however, that enforcement is a major problem. But legislation can empower the Electoral Commission to establish such limits by Regulation, when it deems that reasonable enforcement possibilities exist. 

 

l) Candidates to declare assets 
It makes little sense to clean up elections without linkage to corresponding sanctions in public office to stop the cycle of corruption. Obviously there are existing processes in place in this regard, but consideration could be given to requiring all Candidates (not just elected MPs) to submit declarations of assets to the Ombudsman as part of the nomination process, and to provisions which would mean that any false declaration rendered the person ineligible to stand for a defined period. The purpose of the recommendation is firstly educative (in reminding candidates that they embark on a process where their overall integrity is on the line) and secondly to lay the basis for possible later investigation if relevant. Playing by the rules should not be just one option in a game of winning at all costs – it should be a condition for being a candidate or holder of public office. 

 

m) Abolishing by-elections 
The legislation will be reviewed to as much as possible allow the abolishment of by-elections. Consideration will be given to abolishing by-elections under certain conditions. Under First Past the Post (FPP), “winning” candidates routinely received less than 10% of the overall vote. With three votes under LPV, there is solid evidence that a far wider democratic mandate would have been won by even losing candidates than was often secured under FPP. It would, in my view, be perfectly legitimate to consider requiring the Electoral Commission to complete the count in a manner that would allow the reallocation of votes in the event that a person lost his or her seat. Careful attention to detail would be necessary, including possibly requiring a by-election in the event of the death of an MP or under extraordinary circumstances the voluntary resignation of an MP. Other factors would include situations where a person was removed because of, say, mass multiple voting that threatened the integrity of the ballot, that person’s entire vote would be excluded, including all three preferences (because of the fraud). But in principle, it should be possible to allow the reallocation of votes of a person who lost her or his seat, to establish a successor with the next highest mandate. This alone, would save millions of Kina and allow the Electoral Commission to concentrate on the Roll between elections.

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Woman candidates take Parliament training

By: Roslyn Peter

Parliamentary training for woman candidates interested in contesting the PNG NGE 2017 is a great idea and gives an insight for our woman. This is a concept that would ease the elected woman into her seat in Parliament.

But one thing that should be continuously taught throughout the Parliament is ‘Financial Management, Ethics and Responsibility’

What we have seen time and time is mismanagement of finance and the lack of leadership responsibilities in our elected leaders.

Good leaders are easily lead astray when given power and when put under pressure from their colleagues. This makes their job of governing their electorate much much difficult.

Our mama dated leaders need constant and effective training to help them in their electorates and also help them with their responsibilities.

Getting financial training and management training should be the TOP priority for intending candidates and not just for our woman ..
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By: Post Courier
FIFTY women candidates who intend to run for the 2017 National Election have been selected to participate in a week of training on parliamentary processes.
In a highly competitive process, participants from 22 provinces were selected from more than 200 applicants and will be trained on critical national policy issues, parliamentary processes and campaign strategies from March 6-13 this year in Port Moresby.
The United Nations Development Program (UNDP) PNG acting resident representative, Ms Tracy Vienings said UNDP was proud to be supporting the Practice Parliament for the second time in Papua New Guinea.
“We believe it is important to ensure that PNG women have the opportunity and ability to actively participate in politics.
“With only three women MPs out of 111 in Papua New Guinea’s current parliament, women continue to be under-represented as political leaders and elected officials,” she said. 

Highly qualified candidates from doctors to village women and women from other sectors of the community applied for PNG Practice Parliament for Women training, highlighting just how many women are keen to represent PNG and be active in political life.


The program aims to empower intending candidates to prepare themselves in the lead up to upcoming national elections in April 2017.
The program, organised by the UNDP in coordination with the Office of Integrity of Political Parties, National Parliament and Department of Community Development and religion, will culminate with a practice session in the Parliament chamber on March 13.

According to Ms Vienings, this training will develop women candidate’s skills not only in campaigning for elections, but also in engaging with policy issues that are critical to PNG’s future.
“That is the role of an MP, and we want to help women prepare to become elected representatives,” she said.
The 50 participants were selected by a screening committee, and were also cross-checked with the Electoral Commission to ensure each participant filled in a Form 29 to contest the 2017 elections.
The final list of participants is available below and on the Facebook page: “PNG Practice Parliament for Women 2017 <https://www.facebook.com/PNGPracticeParl2017/&gt; .
http://www.postcourier.com.pg/Stories/women-candidates-take-parlt-training/#.WLcwQ8vXef1

Time to Increase PNG’s Debt to GDP ratio to its “Optimal Level”

By Government Insider

In a previous article, we raised a question “Is PNG bankrupt“? and we compare its debt-to-GDP ratio with other countries. This article follows from the previous one……

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Few issues in politics and economics are nowadays more discussed – and less understood – than public debt. Many raise their voices to urge for reducing the debt, but few explain why and in what way reducing the debt would be conducive to a better economy or a fairer society. And there are no limits to all the – especially macroeconomic –calamities and evils a large public debt is supposed to result in – unemployment, inflation, higher interest rates, lower productivity growth, increased burdens for subsequent generations, etc., etc.

People usually care a lot about public sector budget deficits and debts, and are as a rule worried and negative. Drawing analogies from their own household’s economy, debt is seen as a sign of an imminent risk of default and hence a source of re-probation. But although no one can doubt the political and economic significance of public debt, there’s however no unanimity whatsoever among economists as to whether debt matters, and if so, why and in what way. And even less – one doesn’t know what is the “optimal” size of public debt.

papua-new-guinea-gross-public-debt-percent-of-gdp

Insert: PNG Debt to GDP ratio since 1997

Through history public debts have gone up and down, often expanding in periods of war or large changes in basic infrastructure and technologies, and then going down in periods when things have settled down.

Public debt is not like private debt. Government debt is essentially a debt to itself, its citizens. Interest paid on the debt is paid by the taxpayers on the one hand, but on the other hand, interest on the bonds that finance the debts goes to those who lend out the money.

Today there seems to be a rather widespread consensus of public debt being acceptable as long as it doesn’t increase too much and too fast. If the public debt-GDP ratio becomes higher than X % the likelihood of debt crisis and/or lower growth increases.

But in discussing within which margins public debt is feasible, the focus, however, is solely on the upper limit of indebtedness, and very few asks the question if maybe there is also a problem if public debt becomes too low.

Whatever the problems of low public debt or high public debt, most economists would agree that the optimum level of indebtedness would be 50%…….maybe it’s time Papua New Guinea increase theirs as well.

 

​Advantages and Disadvantages of Budget Deficit

By: Saipriya Iyer

In layman’s terms, deficit budget occurs when spending exceeds income. The following article enlists the advantages and disadvantages of deficit spending.

Widely used in the disciplines of economics, finance, and the government, the meaning of deficit spending varies according to the context. That said, the underlying principle remains the same, i.e., less income, more spending. The subject has also been a topic of world-wide debate amongst economists. While liberals maintain the opinion that this concept increases economic growth, conservatives argue otherwise. The theory is outlined in the following paragraphs, along with its positives and negatives

THE THEORY

  • When a person or the government spends more than he/it makes, the concept is referred to as deficit spending.
  • Deficit spending by the government needs to be financed through some other means of financing.
  • Since the spending increases, the economy tends to increase.
  • The excess borrowing from other sources, however, can have serious consequences later.
  • Renowned economist, John Maynard Keynes, supported the concept of deficit spending during a recession.
  • However, excess debt is a constant accompaniment to deficits, and this results in improper planning or capital mismanagement.
  • The pros and cons are decided on the interpretation; an advantage may be considered one until it gives beneficial returns, otherwise, it can prove to be a loss too.
  • To be more precise, say, due to deficit spending, the government spends more on infrastructure, which is good for economic growth. However, it needs to borrow heavily from other nations, which is a disadvantage in the long run

ADVANTAGES

Increased Economic Growth

  • It is considered one of the positives of deficit spending.
  • When a government spends excessively, it can afford to buy infrastructure for the country.
  • This, in turn, leads to employment of labor force.
  • As more money flows into the country, the overall economy growth rate accelerates.
  • This is especially useful during a recession, as this can stimulate jobs, increase businesses, private investment ventures increase, and consequently, the nation’s economy rises

Control

  • Deficit spending leads to a budget deficit.
  • Running a budget deficit assures that the government bodies think twice before making unnecessary investments.
  • The interest rates matter as well, and a higher interest will force them to think of plans to pay back the debt as soon as possible.
  • It needs to impose more taxes so that the interest rates do not matter a lot.

DISADVANTAGES

No Savings

  • An individual/government will have no savings during a deficit period.
  • This is extremely problematic as during emergencies, there will be no stash to rely on.
  • This leads to excessive borrowing from other nations, that too at a high interest rate.
  • Excessive debt continues to pile up and a vicious circle is created

Rising Costs

  • To retain the excess expenditure, government increases taxes.
  • Prices rise more than usual, this leads to inflation.
  • There is a drop in the standard of living, ultimately resulting in a sorry state of affairs.

Foreign Expenditure

  • Though the government borrows from other nations and this leads to increased infrastructure, the fact remains that the borrowing is done at a very high interest rate.
  • Money does flow in, but the debt remains; the actual investment of the country does not increase, taxation reduces, and the debt keeps piling up.
  • Subsequent measures need to be taken to pay off the debt and increase the internal revenue.

POINTS TO PONDER

  • Most economists with a neutral view, suggest that the right kind of spending can spur economic growth.
  • As mentioned earlier, this subject is a topic of debate amongst the conservatives and the liberals.
  • Herbert Hoover, one of the economic experts, was openly against deficit spending around the Great Depression, because he believed that deficits would destroy the country’s foundations.
  • Keynes, of course, as mentioned before, supported deficit spending, especially when the country is financially downtrodden.
  • Another important point – do not confuse deficit spending with fiscal responsibility, the former is used as a tool of the latter.
  • The borrowed capital from other nations can also be used for public spending, like education or transport.
  • Borrowing heavily from global trade markets and international funds can affect the sovereignty of the nation.

History has depicted that a balanced budget does not guarantee a steady economic growth. Government spending increases the scope of private investment, and the effects of public borrowing on the same are significantly erased. All the same, to make use of the situation in a profitable manner is dependent on the individual, the organization, or the government.

PNG Sovereign Wealth Fund – O’Neill Legacy

by Julia Daniel

Throughout the course of Papua New Guinea’s Independence until today, Papua New Guinea has had its share of resource revenue. The Bougainville Copper Mine had generated millions if not billions of revenue for the National Government. The Misima Gold Mine, Porgera Gold Mine, Tolokuma Gold Mine, Lihir Gold Mine have all poured their resources in the Government. In additional to that, PNG was blessed with Copra, Coffee and Cocoa which it had exported.

However, the past leaders of Papua New Guinea had failed the country. They all have succumbed to the “Dutch disease” and have not prepared the country for a rainy day.

In February 2012, Peter O’Neill having learnt from all the observations as Finance Minister in the Somare Government, passed a Law for PNG to established its first ever “Sovereign Wealth Fund”

What is a “Sovereign Wealth Fund?”

According to Wikipedia “A sovereign wealth fund (SWF) is a state-owned investment fund investing in real and financial assets such as stocks, bonds, real estate, precious metals, or in alternative investments such as private equity fund or hedge funds. Sovereign wealth funds invest globally. Most SWFs are funded by revenues from commodity exports or from foreign-exchange reserves held by the central bank.

Some sovereign wealth funds may be held by a central bank, which accumulates the funds in the course of its management of a nation’s banking system; this type of fund is usually of major economic and fiscal importance. Other sovereign wealth funds are simply the state savings that are invested by various entities for the purposes of investment return, and thapng-swft may not have a significant role in fiscal management.”

The Papua New Guinea Sovereign Wealth Fund (PNG SWF) will consist of a number of Sovereign Funds. The Legal ownership of the sovereign wealth fund is the Independent State of Papua New Guinea.

The objectives of the fund are to support the long-term social and economic development objectives of the State provide a means of saving for the future generations and facilitate the macroeconomic stabilization of the Papua New Guinea budget and the economy.

The Sovereign Wealth funds currently have two parts;

  1. Stabilization Fund
  2. Savings Fund

National Research Institute (NRI) after conducting a research into this Law gave its support of the establishment of the PNG SWF and further recommends that the Sovereign Wealth Fund also include an “Infrastructure Development Fund” in addition to the 2 funds.

The Revenue Flows for the PNG SWF will begin in the first quarter of 2017 according the Treasury Minister Hon. Patrick Pruaitch who gave a budget speech in August 2016. “Mr. Speaker, I am pleased to confirm that revenue will start to flow to PNG’s Sovereign Wealth Fund in the first quarter of next year. In 2016, revenues flowing into the Stabilization Fund will be drawn down into the Budget to fund key priority policy areas.

This landmark legislation was passed in July. I thank all members for their bipartisan support of the PNG Sovereign Wealth Fund. Designed as a long-term investment vehicle, the Sovereign Wealth Fund will serve PNG for decades to come, reducing PNG’s vulnerability to external shocks, such as the current fall in commodity prices.

The Sovereign Wealth Fund has been designed to provide the highest standards of accountability and good governance. Funding has been allocated in 2016 for appointment of an experienced and well-qualified Board and a SWF Secretariat. In 2016, the Government will issue the Board with its investment mandate and Government expectations on management of funds.” – Patrick Pruaitch

Papua New Guinea will really start to reap the benefits of the PNG SWF once revenues start to flow into the funds.
The onus now is for the Government to setup a transparent and stable management of the fund without political interference.

 

  1. http://www.businessadvantagepng.com/papua-new-guinea-sovereign-wealth-fund-coming-in-a-nick-of-time/
  2. http://pacificpolicy.org/2014/09/pngs-sovereign-wealth-fund-still-too-many-loose-ends/
  3. http://www.swfinstitute.org/swfs/papua-new-guinea-swf/
  4. https://www.google.com.pg/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwjxkLqV9vvOAhVBmZQKHeJADgwQFggfMAE&url=http%3A%2F%2Fwww.treasury.gov.pg%2Fhtml%2Fpublic_debt%2Ffiles%2F2013%2Fswf%2Fpng.swf_public.info_%252022%2520Feb%25202013.pdf&usg=AFQjCNF7Sgy9WSOJn-hL21xrClS02KITJg&bvm=bv.131783435,d.dGo

 

 

Economy on the Right Track

Mr Speaker so as a result of that when we came into government in 2012, we changed the strategy. And that was to get into a deliberate deficit budget. And the good treasurer then was the current opposition leader. When we introduced the budget, we that projected a deficit of 6 per cent, 6 per cent at that time in 2012. We came under when we had the final year outcomes, Mr Speaker we came under almost 5.9 percent. In 2013 we came under 5. 2014, 2015 we came under 4. We ended up with 3.9 percent.

This year this budget and these supplementary adjustments are trying to make sure that we continue that decline all the way down but in a structured manner Mr Speaker. So the outcome that we are projecting for 2016 is under 3 percent deficit for our economy. And next year in 2017, we hope to bring the budget deficit down to 2 percent and eventually we’ll get down to a balanced budget. ” – Prime Minister Peter O’Neill

large-image-budget.jpg

To Save or NOT to save?

Mr Speaker we are quite familiar with the strategies that we have put in place and let us say that when we took government in 2002, the idea and the strategy was to get back to surplus quickly and credit to the good honourable treasurer then. He ran a very t6686236-3x2-340x227.jpgight ship. And as a result we produced so many surplus budgets. We had surpluses for many many years Mr Speaker. But at the expense of what? We had a surplus budget at the expense of cutting services everywhere. We eventually shut down departments that were not function
ing. We had provinces that were not operating. We had districts that had never seen their government. Yes we were having surplus budgets. Internationally we were looking good. The budget figures were excellent. But the reality on the ground was absent
.” – Prime Minister Peter O’Neill

 

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2016 SUPPLEMENTARY BUDGET SPEECH by Hon. Peter O’Neill, PM

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AUGUST 26 2016

 

These are processes that have been ongoing for 40 years since our independence. The government does not go and consult the opposition about budgets, unlike what the good opposition leader is trying to say. Budgets are key important policy documents for governments and as a result of that Mr Speaker it certainly does have a bit of secrecy about it because you don’t want to argue about the economic position of the country on gossip columns and the press on a daily basis. Mr Speaker it does not give confidence to anyone. What it states basically is that what you present to parliament must be taken seriously and that the business community and the investors and all the other stakeholders will have confidence. Mr Speaker coming to this parliament in 2002 under the Somare government, we inherited an economy that was in fact projected to be in surplus by the previous government. We inherited a government that was having a minus K800 million deficit. The strategy at that time was to try and return to a surplus budget as quickly as possible. So the good honourable treasurer, Mr Bart Philemon and Mr Speaker let me say that in the last 15 years there has only been four treasurers in our country. Fortunately three of us are still in this parliament and our good treasurer is the longest serving treasurer among all of us. Myself and the opposition leader are the shortest serving treasurers in between, so Mr Speaker we are quite familiar with the strategies that we have put in place and let us say that when we took government in 2002, the idea and the strategy was to get back to surplus quickly and credit to the good honourable treasurer then. He ran a very tight ship. And as a result we produced so many surplus budgets. We had surpluses for many many years Mr Speaker. But at the expense of what? We had a surplus budget at the expense of cutting services everywhere. We eventually shut down departments that were not functioning. We had provinces that were not operating. We had districts that had never seen their government. Yes we were having surplus budgets. Internationally we were looking good. The budget figures were excellent. But the reality on the ground was absent.  That is the fact Mr Speaker. Mr Speaker so as a result of that when we came into government in 2012, we changed the strategy. And that was to get into a deliberate deficit budget. And the good treasurer then was the current opposition leader. When we introduced the budget, we that projected a deficit of 6 per cent, 6 per cent at that time in 2012. We came under when we had the final year outcomes, Mr Speaker we came under almost 5.9 percent. In 2013 we came under 5. 2014, 2015 we came under 4. We ended up with 3.9 percent.

This year this budget and these supplementary adjustments are trying to make sure that we continue that decline all the way down but in a structured manner Mr Speaker. So the outcome that we are projecting for 2016 is under 3 percent deficit for our economy. And next year in 2017, we hope to bring the budget deficit down to 2 percent and eventually we’ll get down to a balanced budget.

Mr Speaker we are doing it in a structured manner and avoid cutting services.  Our key policies and our key promises to our people remain same. We have not cut free education, we have not cut free health care, we have not cut the support that we are going to give to the churches and all our partners. We are continuing to invest in capital works and infrastructure throughout the country. We’re still maintaining good support for the judiciary and in the law and order sector Mr Speaker. 

We are supporting the districts through the DSIP without any cut. Through the PSIP, all those key programs across the country Mr Speaker it is being maintained and are producing results today. Four years of steady results with a declining deficit budget that is coming down, we need to continue to stay focused. We need to stay on track Mr Speaker. I guarantee you that we will get down to a balanced budget. And this will give confidence to even our international partners who now understand. It is a strategy that the Opposition leader himself was party to. However, all of a sudden there is fear about debt about budget deficits Mr Speaker.

Mr Speaker, even United States of America, the most powerful nation in the world, Japan is 3rd most biggest economy in the world, Australia, Britain, and most of the countries around the world are in deficit budgets Mr Speaker even though they have advanced infrastructure, better roads, better hospitals, better schools, unlike us; they are running a deficit budget because they need to stimulate their economy. Mr Speaker, if we do not invest in infrastructure after the LNG construction has lapsed, we will see more people on the unemployment line than what the member for Goroka is saying today. The construction investments that we have made in the construction industry throughout the country are keeping people employed. It is keeping as a means of functioning Mr Speaker. Yes there are tough times there.  There are some businesses who are struggling. And that is admitted Mr Speaker, but Mr Speaker the global challenges are not new to us, we don’t have to have a political grand standing. It’s not a contest of who is the brightest and who is the smartest. Mr Speaker it is about making our country work and putting food on the table for our people.  And that is the priority of this government Mr Speaker.  

Mr Speaker, let me say that the growth projections that the treasurer is now saying just close to global growth projections that has been stated by IMF and the World Bank, Mr Speaker that is extra conservatives that the treasurer has made. I know that we will finish higher than that at the end of the year Mr Speaker. We will finish higher than that. Last year Mr Speaker it was projected to be around 6 percent or so, we finished at 9.9. These are independently verified figures of the economic growth for the country. So Mr Speaker, you can see that our economy is transforming since 2011-12. Our GDP for the entire country has doubled. We must continue to maintain prudent management of our economy and offcourse that is not an evil thing Mr Speaker. Many successful countries, many successful companies go into debt to grow their businesses, grow their economies and likewise we must follow. The strategy for Lae MP Bart Philemon used was that all the surpluses that we made in 2002 onwards were diverted into paying back all the debts, which looked very good. The debt levels were coming down but we were not investing in infrastructure. Lae city was in potholes, Port Moresby city was breaking down; even all our provinces were not functioning as expected. That is a fact. I know that now there’s a little bit of improvement in many of these services within the provinces. 

Yet we tend to forget 4 or 5 years ago where we were. The fact is because we are investing in the right sectors and things are starting to look promising. We need to continue to maintain that level of activity. 

Mr Speaker one other thing is that it is quite evident that when we set budgets, it is the educated  professionals and experts working within treasury and the country who set this forecast for us. They make assumptions about commodity prices. For example, when we were experiencing 110 dollars per barrel for the oil prices in the budget figures, they estimated 70 or 80 dollars per barrel. They reduced it down to an acceptable level so our country could counter for any shocks on the drops of prices. And offcourse if the prices remained high, we were able to raise more revenue. But Mr Speaker when you have an economy that collapses from 110 dollars price down to 27 per barrel that’s a huge drop in anybody’s language. And obviously the revenue coming into the country gets affected. That is why our revenue for this year is down by almost 2 billion dollars, which we used to get from mining and petroleum taxes almost that accounts to about K2 billion a year for PNG. This year we will be lucky if we get K200 million. That is a huge drop. I know there are many fortune tellers around but you know nobody tells that what the global prices will do over time, or when the war will be declared in the Middle East somewhere, nobody knows. You and I have no control over that. We are price takers so we have to live within reality Mr Speaker. And the fact of the matter is Mr Speaker supplementary budgets are a necessary tool for us to adjust our budget. I know there has been calls, many experts, and so called experts who sit behind computers around the country and give their expert advise and critic on supplementary budgets or readjustments to 3 or 4 months after we have introduced it. The truth is that you have to allow the activity in the economy to continue so you have a reasonable assumption. You can’t change your budget everyday or when the price of oil drops. You have a long-term average that is why after the mid-year economic physical outcomes were produced by law, it was published publically by treasury in June. We are able to assess our economy’s tracking. There is no other way to assess how anyone can predict where the economy is going unless you have the figures to tell you how the economy is performing. After that the outcome we have been able to see it. I know the good member for Goroka has got a copy of it he can pass on one to the good opposition leader but you know these are public information that is available out there. Every international donor agency, every multilateral partner have access to it. Mr Speaker, based on that, the treasurer is able to frame the supplementary budget. And that is what we are discussing today. It is painful because we are cutting some basic service, basic expenditure items that are going to cut costs, limits of activities for some of our national departments. But we tried our very best Mr Speaker to maintain no cuts in the districts, no cuts to the provinces, no cuts to education, free education policy, free health policy, no cuts to the infrastructure and I know that the good opposition leader talks about cuts to the worst. Mr Speaker after discussions with the department of works, the management there, they are saying that these are some of the projects that are budgeted for this year but will not start yet until next year. Mr Speaker, ADB and offcourse all the other donor partners are working closely. Some of these ADB funded projects will continue. It’s not as if we are saying that the economy is not ferrying well so we shut down shop and go on holiday. The economy is still functioning, it’s still standing. Mr Speaker we have got mines that are now starting to produce well. Offcourse mining projects like Lihir and Porgera and because of physical terms that were given to them, we didn’t collect much in our revenue for many years. Only now they are starting to pay taxes. Mr Speaker, we will start seeing some increase in the revenue that we will get from companies like Ok Tedi who will start paying dividends because it is now operating very profitable.  Finally, Mr Speaker there has been a lot of talk about inflation. Prices of goods are going up. Mr Speaker, again the international economy functions itself on US dollar as the primary currency. Over the last 2 years, the US dollar has been gaining strength against all currencies. We are not exempted from that. That means the real value of kina is continuously going down. And when it goes down, offcourse the import costs go up and as a result it is passed onto the consumers. That is why we are trying all our best to make sure that we buy Papua New Guinea made products only Mr Speaker. So that we can promote Papua New Guinea industries. We can promote agriculture in PNG. Mr Speaker these are areas that we want to focus on because our problem in the past is that we have not learnt from the mistakes made previously. That is that why we have not broadened our economy. We have been overly dependent on mining and petroleum Mr Speaker so as a result when the boom and bust cycle goes, we ride with that boom and bust cycle. Going up and down, up and down. So it is very important that we broaden the economic base. And I think the new reports that are coming out from National Statistical Office; the new GDP data that the Minister for Planning shows that these sectors are slowly starting to carry the economy. 

It means that we are not overly dependent on the mining and petroleum sector and I think that when we continue to invest in these industries, we will do our best despite limited resources.

You know Mr Speaker, most important is free education. The school fee savings is what the parents will have in their pockets. It is savings them. That is an increase to their household income Mr Speaker. When you have funds going to the districts and the PSIP and DSIP, they are spending money in the districts. we also have K10 million in the districts, K10 or K15 million in the provinces. Mr Speaker, what are DSIPs and PSIPs employing? 

They are employing local businesses or small to medium enterprises to carry out government work in the districts. Mr Speaker, so money has been translated into key sectors that are starting to produce results. We must continue to stay on the key policies we agreed to until the elections Mr Speaker. 

Let the people judge us on the outcomes and I commend the treasurer for presenting an excellent supplementary budget.

Development Needs Time

By Hon. James Marape MP

Hi all out there, development takes time, years in fact to evolve. All it takes is stability and consistency in public policies and efforts for development to happen.

Before I expand on this topic of development and deficit budget, may I firstly thank all who have read my previous posts and offered your commentaries. I am the first to admit that Iam no expert in subjects I write on which mostly are my opinions skewed towards my point of view. Secondly some of you wrote contrary to my point view and I accepted them as your points respectively.

In this writeup, I am going to discuss on development aspirations in Papua New Guinea and why we in the current O’Niel Dion Government have embarked on a 5 budget deficit budget plan since 2012.dev

In 2012 when we took office, we looked into the 5 years ( what we describe as the medium term; 2012 to 2017) and we estimated that our total revenue will be less then our development and recurrent expenditure cost. Now the question we asked then was do we sit back handicapped with revenue constraints hence not fund free education, free basic health care, our infrastructure plans, our districts and provinces and etc?

We agreed as a government that we will not sit back but we planned successive deficit budgets to ensure our development targets are met. Today almost into the end of our term results are evident and we stand to be judged on our performance.

Ask education department; they will confirm that one million new children are in our school systems because of free education ( mind you we are working on space and quality aspect as we speak). Most education institutions have new buildings as a result of either national government direct funding ( example 4000 new lodging facility at university of PNG), or PSIP and DSIP for provincial and district schools.

Ask health department; if Port morseby hospital is transformed, if Lae, Hagen, Madang, Kokopo are seeing changes, ask Enga leadership if we have secured funding their Province’s 300 million Kina provincial hospital, ask all provincial hospital CEOs if they have been receiving direct funding from national government starting 2012.

Ask works department; of you can now drive from Kimbe to Kokopo ( never done before 2012), they will tell you 3000 kilometers of new road have been sealed, check Kundiawa to Gembolg, Buluminski highway the last 20km is being sealed, sealing taking place from south to north Bouganvillie ( kokobau Buin road), you drive from pom to Kerema on total sealed road, lae city road improvements and of course port morseby roads. Works are happening in most sections of our most economical road, the highlands highway and it is a work in progress.

Ask the National Airports Corporation; who initiated and funded the port moresby international airport, the mt Hagen, Hoskins and Goroka terminals, the Aropa airport and terminal or Girua airport as a case in point, ask tourism promotion authority on what is happening at gurney airport in Alotau. Check if Kundiawa and other airports have some small work happening since 2012.

Ask PNG ports; who initiated and funded lae ports, Kieta ports, Kimbe ports, port morseby ports, the many small jetties in our coastal areas.

Time and FB space does not permit me to write all that we have undertaken since 2012. All of you PNG citizens come from a district, check your local elected MP for work he or she has done wether as Provincial Governor or District Member.

Contrary to what our oppositions say, on record we as Government directed by our Prime Minister, have given DSIP/PSIP development money equally to all Provinces and Districts including Bulolo. For instance since 2013, 2014 and 2015 we have remitted a total of 30million kina each to ALL 89 districts in PNG. If nothing is happening in your districts then ask your elected leader at elections, that is your right.

I have post below a picture of a 500 bed and study capacity Techical college and a “3 star type”100 bed hospital my Tari district will soon complete that I had started funding for my district in the last three year as an example of work happening in rural PNG as a result of direct money transfer from national government to sub national government agencies unlike in the past where national governments tries to do all.

All these we were able to do because we deliberately structured plans to enter a series of responsible deficit budgets. If you interested all you have to do is read our 2012 budget documents.

Why deficit budget? Because money available in one year is not enough to meet all our development needs.

Is deficit budget only done in PNG? Ask any Australian economist and they will tell you the first 40 years since the world war 2 ended (1945) they structured deficit budgets. Infact last year 2015, their national Debt to GDP was 213%. Their national history is littered with deficit budgets and their accumulated national debt is way higher then ours which presently sits at 29%.

I am presently reading a book written by “Vern Gowdie” published in 2015 and he writes that the most established economies are in huge national debt incurred over many years. For instance Japan 400%, USA 233%, China 217%, Singapore 382%, Philipines 116%, Vietnam 140%, Indonesia 88% to name few countries that we in PNG are familiar with. These countries build their nation and economies by transferring national debt into improving their economy and country in general. Don’t listen to glass house economist who wants us to individually remain below poverty lines.

The roads, ports, airports, schools, health and other interventions are national assets acquired through sustainable deficit financing to grow our economy for our children’s future.

For uu in PNG, in the last four years our debt remains sustainably low and at amounts below 35 percent as required by our fiscal responsibility act. In fact with revised figures in our economic base released recently both by our central bank and national statistical office, our debt to GDP stands at 29 percent.

May I encourage every one out there that we in government are concern about our country just as much as you all concern. We doing our utmost best within confines of constraints we currently faced with, like the 70 % slash in national revenue ( 2014/2015/2016) both from drought related non production at Oktedi and the drop in global oil prices.

If you think that we not doing well leading this country, then in 2017, you have every right to remove the mandate majority of you, our voters gave us in 2012. But for now we will complete the few development tasks we have left to do for this term, including upgrade and sealing completion of untouched sections of the highlands highways like Halimbu to Komo, and Halimbu to Kelabo.

My next post will be on you, citizens and the importance of your constitutional section 50 rights, rights to vote leaders at elections.

Keep in touch. We have many international visitors, head of states, leaders of public services, businesses leaders, sports ( international soccer and cricket). Let’s not talk ourselves down all time , see in the positive always.

Cheers
James Marape – MP

(please forgive me, Iam writing this post late night one my iPhone hence might be full of mistake and also please know above are just my views, you have yours and I will respect your views just like you have read mine.)

This photo saws my district’s hospital and Techical school campus that we are putting final touches now, an example of DSIP at work.

 

BRING BACK LEADERSHIP CODE

By John Peleu

I wish to remind everyone first and foremost that no one is above the law, even the Prime Minister.

However, having said that, we must take into consideration that our current PM, Hon. Peter O’Neill swore an oath to protect the Office of the Prime Minister and its function when elected in 2011, and again after the elections in August of 2012.

At current we face division amongst our own people, including our law enforcement officers. Many support a warrant of arrest that was signed by the Chief Magistrate Ms. Nerrie Eliakim in 2014 to have our PM arrested over allegations of his involvement with the Paraka scandal.

I agree that our peoples’ voice must be heard, however since independence, no Prime Minister has handed himself into Police for questioning over allegations on corruption, until tried by the Leadership Tribunal.

Why because there is a process in this country we have always followed when leaders were suspected of, or found to have breached the leadership code.

According to the Constitutional Planning Committee Report 1974, Chapter Three (3) under the Leadership Code gives definition and also examples of the LC.

2. Our notion of a “leader” is not confined to the Ministers, the Speaker, the Leader of the Opposition and other members of the National Parliament, since they are not the only people who hold official positions of significant power, authority or influence in our
country. Senior public servants, senior Police and Defence officers, constitutional office- holders (including judges and magistrates), senior officers of statutory bodies and boards, government nominated directors and general managers of corporations, members of provincial assemblies and senior officers employed by provincial governments, senior staff of Ministers and Opposition leaders, members of the Advisory Committee on Citizenship Matters, and presidents, chairmen and mayors of local bodies exercising governmental functions (e.g. local government councils and associations such as Warakarai na Gunan and Greater Toma “Council”), senior administrative officers of these bodies, academic and senior administrative staff of tertiary institutions, office-holders of registered industrial organizations, ambassadors, high commissioners and senior diplomatic officers, and office-holders at the national level of registered political parties –
all of these people, we believe, should be regarded as leaders for the purposes of this Chapter.

When a complaint is made through the Office of the Ombudsman Commission, a case is presented to the Public Prosecutor who then recommends for hearing by a special court, known as the Leadership Tribunal.

And for every leader investigated, a Leadership Tribunal carries out an important function to pursue its investigations and findings before instituting court proceedings before passing judgement over a leader’s conduct in office.

That is the process we practice in our democratic country, and not subject to normal investigations by officers within the police force who operate on their own accord.

The Leadership Tribunal are assisted by the findings from our police.

Whilst there is growing support for investigations carried out by our National Fraud & Anti-Corruption Directorate, we must also let the investigations follow a proper process that adheres to the Leadership Code.

And of all people, it is fair that the Police Commissioner understand the repercussion by setting a very dangerous precedent if he does not control his officers at this juncture.

We must also take into consideration how the entire investigations was influenced by a group of politicians in 2013, who visited the Office of the Police Commissioner who at the time was Mr Thomas Kulunga, and made an official complaint. They also visited the Office of the Ombudsman Commission and the National Fraud & Anti-Corruption Directorate.

Take note that a formal complaint to investigate the current PM was done by politicians. Therefore the investigations is politically tied and can be seen as a means in overthrowing the current government.

If so, then the victors will be politicians and not our people.

This trend is a very dangerous trend and sets a dangerous precedence where future Prime Ministers can be overthrown through the same notion.

We must always remember that leaders, even though are subject to law, must be tried by a Leadership Tribunal.

Every citizen is subjected to the rule of law, however the rule of law currently practiced, promotes a vigilante style noted as unprecedented and canny.

We cannot allow a precedence to be set whereby a Prime Minister is subjected to a vigilante police investigation without observing proper processes in place.

Therefore, we have an obligation to support our current Prime Minister in making sure, a similar incident never occurs in the future.