Business Breakfast Speech,17 August 2017

Speech by Hon. Peter O’Neill CMG MP Prime Minister of Papua New Guinea – Business Council of Papua New Guinea – Business Breakfast, 17 August 2017

Good Morning.

It is a pleasure to be with you this morning.

Engagement with the business community has always been a priority of our Government, and this will continue.

It is important that new Minister and Members of Parliament meet with you.

We have just come through a long election period, over three months.

The election had its share of challenges, in logistics and process, and we are undertaking a post-election review to make improvements in the way we conduct elections.

At the same time, this was one of the most peaceful elections of recent times.

There were disturbances and unfortunate incidents in some provinces.

But when you compare this to the violence in the 2012, 2007 and 2002 elections, we can see change taking place.

Right around Papua New Guinea we are seeing change – this is change in social and economic development, and change in community attitudes, in the electorate and the voters.

Our Government is proud to have the mandate to continue driving positive change.

We are grateful for the support given by our people to continue our core policy agenda.

We are also grateful for the support of the business community for our Government.

We will again be a business-friendly Government and consult with all stakeholders.

Current policies will evolve and new policies will be introduced.

There will be further regulatory reform to keep pace with changes in the global economy.

But we can promise you that we will continue to be a Government that does not impose unwanted surprises.

We believe in policy evolution, and we will always consult with business.

POLITICAL STABILITY

A very important factor in this is that the business community needs stability.

After decades where Governments changed every few years, and business never knew who would be in office one year after the next, that has all changed.

Over the past fifteen years, there has only been two Prime Ministers.

This is unprecedented in our country.

There are not many countries in the world who are able to maintain that level continuity in Government.

Now moving into the seventh year after our Government first came to office in August 2011, we will continue to deliver stability that the business community wants.

We know that maintaining political stability is key element in maintaining business confidence.

BUSINESS CONFIDENCE

The concerns that confront business today are known to our Government.

We know that business wants to know how Government is addressing the availability of foreign exchange.

I understand the genuine concerns you have, and the impact that the availability of FOREX has on your businesses.

The Bank of Papua New Guinea continues to have our full confidence, and I believe, that they are managing this issue responsibly.

The Central Bank’s intervention in the foreign exchange market has been sensible.

Foreign Reserves are currently sufficient for 10 months of total import cover.

Our Government hears the concerns that have been raised by business, and we are working to ease these pressures and ensure this issue is attended to in a timely manner.

We are also redoubling our efforts to bring online major impact projects in our country.

These projects will positively impact foreign exchange reserves, they will also deliver much needed jobs for our people, and reliable contracts for our businesses.

BUSINESS ENGAGEMENT

Our attention to business engagement and empowerment is from the largest to the smallest businesses.

When it comes to large-scale projects, that will generate thousands of new jobs and create new revenue opportunities for our country.

Companies, including ExxonMobil, TOTAL and Oil Search, continue to maintain the highest confidence in our oil and gas sector.

Other investments are coming online, particularly in the mining sector.

The Government is fully committed to these developments, and the number of others at various stages of advancement and approval processes.

As we move forward, we also have a renewed focus on being more self-sustaining in manufactured products.

As a resource-rich nation, combined with a committed and better trained workforce, we must become more self-reliant.

Where we can produce more locally, and we must do so.

We will continue to diversify our economic base to create greater opportunity in sectors that include – Agriculture, Tourism, Forestry and Fisheries, to name a few.

We need to stop going through the boom and bust cycles.

We believe the downstream processing of our raw products offers opportunities to increase employment, and to add significant value to our exports.

We must make better use of our food produce to reduce our reliance on imported goods, and to enhance food security in our country.

We will widen the scope for manufacturing industries and create employment opportunities, and ensure we keep up with new technologies and access new markets.

Over the last 40 years, we have been slow to grow the formal SME Sector.

In the coming years we will deliver a comprehensive small business strategy, including the re-introduction of the Stret Pasin Stoa scheme that has been popular with our people.

POLICY AGENDA

During the election, we presented our core policy commitments, and refined these further into the Second Alotau Accord.

This built on our policies of the past term of Parliament, and will continue to be strengthened.

At the heart of our policy agenda is our people – the Men, Women and Children of Papua New Guinea.

We must be custodians for their economic wellbeing.

In Alotau, our Coalition partners agreed to policy initiatives that will drive real development for our people.

MAINTAINING ECONOMIC GROWTH

Over the past five years we have maintained positive economic growth, despite a very challenging global environment.

Our economic fundamentals remain sound, even when facing pressure, and continue to be maintained through careful and sensible management.

The National economy is projected to continue grow at 3 per cent this year, and build on previous years of positive economic growth.

At the same time, similar economies around the world are facing economic decline.

We are running a deficit budget, and that is the sensible considering the pressures on the economy at the current time.

We cannot sit and wait for the global economy to recover, we must continue to invest in our people, and we must continue to invest in infrastructure in key sectors.

The global economy is recovering, and we have to continue to ride the end of the storm as economic conditions improve.

Prices for our key mineral exports are still trending at low levels, but better than in 2016.

To mitigate the risks and ensure macroeconomic stability, our Government will continue to carefully monitor economic developments affecting revenue streams.

We will deliver a 2017 Supplementary Budget, as a natural course of action for any new Government.

The Supplementary Budget will ease financing pressures, while ensuring the ongoing delivery of essential services.

Particularly in core policy areas, we will make necessary adjustments to achieve the fiscal deficit target of this year’s budget.

We are not contemplating new taxes as part of the 2017 Supplementary Budget.

Our critics can say all they want, but in the previous term of Government we did not raise taxes.

We will continue to focus on achieving sustainable economic growth and maintaining a sound fiscal path.

Attention will continue on revenue generation to support social development objectives.

We will continue to enhance the quality of government expenditure and manage debt to maximise growth.

With support from the IMF and World Bank, we are currently reviewing a study of the medium term fiscal strategy to ensure that our budgets are framed prudently.

In the 2018 National Budget there will be a renewed focus on implementing a revenue system that is just, efficient, and responsive to the needs of our country.

We are not increasing taxes, but ensuring it is fair for all who should pay tax.

APEC PAPUA NEW GUINEA 2018

Over the coming year, Papua New Guinea will host APEC.

Over recent years the reputation of our country has been enhanced in the International community.

We will continue to strengthen relations with our close trading and cultural partners, and foster greater people-to-people exchanges.

The economies of APEC account for more than half of global trade, and we are expanding our access in these markets.

In November in 2018, the Presidents and Prime Ministers of APEC’s 20 other Member Economies will visit our country.

This creates a unique opportunity to showcase our country to the world.

Business leaders from the APEC region, and around the world, will be in Papua New Guinea and carry with them greater trade and investment opportunities.

Through APEC we have access to technical co-operation, capacity building and sectoral exchange that will help so many of our industries.

There will be more than 15,000 overseas visitors coming to Papua New Guinea for APEC over the coming year.

Collectively, delegates and their Governments will spend well over 100 million Kina on accommodation, air fares and other expenditure in Papua New Guinea over coming year.

This is additional stimulus for our economy, on top of National investment in APEC infrastructure and services.

CONCLUSION

Our door will always be open to business, we will consult fully on policy and regulation, and we will take your advice on creating jobs.

The future is bright for business in Papua New Guinea.

We are dealing with challenges, but there is light at the end of the tunnel.

Business and Government must work together in the interests of our Nation, and better outcomes for all participants.

I look forward to positive outcomes from this forum, and the continued expansion of business and investment in Papua New Guinea.

Thank you.

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