Category Archives: Planning

The Govt’s 100 Day Plan Expires Tomorrow

BY GORETHY KENNETH  : Post Courier

 

The Government’s 100 days 25 Point Plan expires tomorrow (Tuesday) with most of the proposed projects proactively undertaken, Treasurer and Deputy Prime Minister Charles Abel have said.

And in light of prevailing circumstances the 100 days 25 Point Plan was and is intended to demonstrate proactively and inspire confidence and kick-start the Alotau Accord II by undertaking specific activities around.

“Not so long ago I stood here and delivered the 2017 Supplementary Budget that was Point 1 in the 25 Point 100 Day Plan to kick-start the Alotau Accord ll of this coalition government.

“The 2018 Budget our first substantive annual budget, is Point 2 of the 100 Day Plan, and will be another illustration of our intention to deliver on our promise to maintain fiscal discipline, grow our revenues, strengthen our economic base, improve governance and act strategically,” Mr Abel said.

“Our Government has taken stock following the national elections through a consultative process of engagement with stakeholders from Government, the private sector, development partners and community-based organisations.

“This has been important in helping guide our interventions, and in the spirit of partnership we will continue this open engagement.”

“These activities obviously roll into Points 1 and 2 of the 25 Point Plan which are the 2017 Supplementary and 2018 Budgets.

“The intention in Points 1 and 2 was to maintain fiscal discipline in the light of the prevailing difficult circumstances in terms of our budget parameters of a 2.5% fiscal deficit and debt to GDP of 30% so as not to put more stress on government financing and the economy.

“A number of measures were undertaken to maintain this discipline but primarily as per Point 4, and thanks to the understanding of Honourable Members of this Parliament, the Service Improvement Program was reduced in 2017,” he said.

Here’s how the 25-Point Plan was carried out and is being implemented now:

Point 3 was related to payroll strengthening and the OSPEAC (Organisation Staffing and Personnel Emoluments Committee) has been reactivated and is progressing a payroll audit and cleansing exercise and the MD registration requirement as explained by the Minister for Public Service in Parliament. This is in response to the primary cost escalation factor of Government which is the unsustainable growth in personnel emoluments.

Point 5 was for:

  1. i) The drawdown of the balance of the Credit Suisse loan of which two technical requirements will have been met following this budget session enabling the final balance to be drawn.
  2. ii) To access World Bank and ADB budget support funding for the 2018 budget. This has been achieved following my trip to Washington where the World Bank provides US$100m for debt restructuring in 2018 and another $100m in both 2019 and 2020. The A08 is also providing budget support commencing in 2018 for the health sector of up to US$300m commencing in 2018. These measures provide financial resources on good terms and bring in foreign exchange.

Point 6 was for:

  1. i) Oil Search to provide a minimum of 50% of the crude oil needs to the Napanapa Refinery and in Kina terms. This has been achieved through an agreement and is happening.
  2. ii) Transition to gas-powered electricity the Pom Gas 58MW electricity project has been approved by Cabinet and has commenced construction to provide the cheapest in country power source using our own gas and all sales denominated in Kina. The new power plant will be owned by Oil Search and Kumul Petroleum with shares to be taken up by MRDC. The availability of domestic gas can catalyse other gas-powered initiatives.

iii) Rice production the rice quota scheme has been delayed and 3 large scale rice projects are being developed with 3 separate private sector partners with potential support in the 2018 budget through the Agriculture Commercialization Fund.

  1. iv) The Bank of Papua New Guinea intervention into the forex market with US$100m is done. The BPNG is also conducting a review of all foreign currency accounts and the obligations of those account holders, particularly resource companies to remit excess funds back to PNG.

Point 7 for non-tax revenue collecting agencies to remit 90% of their revenues to CRF has commenced with some immediate action with specific agencies and will be reinforced by the Public Money Management Regularization Bill 2017 approved by Cabinet and to be tabled in conjunction with this Budget.

Points 8 and 10 relate to tax regime reform and this is being managed through the new Medium Term Revenue Strategy, developed in conjunction with the IMF and a new Tax Administration Bill which I will bring shortly. Measures will commence in this budget to tidy up the tax code and the BPNG, lRC, IPA and commercial banks are cooperating to enforce compulsory Tax Identification Number requirement for opening bank accounts. The commercial banks have agreed to provide information to the lRC regarding bank accounts being operated in a business manner for further scrutiny.

Significant funding support is provided in the 2018 budget for both the IRC and Customs to boost capacity against quantified additional revenue collection.

Point 9 was the establishment of the task forces for the IRC, Lands and the Customs and Illicit Trade. Funding has been provided in the Supplementary Budget and the Attorney General, Labour and immigration Ministers are leading the Customs and illicit Trade, Lands Minister the Lands task force and Treasurer the IRC task force.

Point 11 is for the progress of some significant resource development projects and; Wapi Golpu, PNG LNG expansion, Papua LNG is all on track for early works, pre FEED or FEED in 2018. Western LNG has announced pre FEED works last month.

Point 12 is for the launch of the new Australian DFAT grant-funded projects; the PNG Australia Economic and Social infrastructure Program and ANGAU Hospital re-development design are still pending, and the TB Project co-funded with the World Bank has had the financing documents executed already.

Point 13 is the power projects;

  1. i) the 58 MW Pom Gas project construction has begun. ii) the 30MW PNG Biomass Project in Markham with Oil Search is in progress.

iii) the Ramu 2 180MW Project has had commercial close via a Cabinet decision but

is pending financial close due to certain conditions precedent. iv) Naoro Brown River Hydro Project is progressing with funding from the World Bank.

  1. v) Hela Gas power solution is being negotiated with Exxon Mobil and Oil Search.  In the meantime, funding is provided in this budget to pull the power “”9 from Mendi to Hides to provide the missing power and NBN telecommunications link to access power to the communities from the Ramu Grid and surplus from the Tari existing generator.

Point 14 is certain high impact projects:

  1. i) the international submarine cable that the Australian Government has now offered to fund from Sydney to Port Moresby and Port Moresby to Honiara. PNG will own these 100% and 50% respectively and will substantially increase reliability and lower the cost of data into PNG some 25 times.  In the Pacific Marine, Industrial Project has had a new financing agreement sign with the China EXIM Bank, the Sepik Plains agriculture project, together with Baiyer Valley and the Centre.

Plains are identified for large-scale rice production as described earlier.

Point 15 is the commencement of the US$1 billion upgrade of the Highlands Highway of which the Project Management Unit has been established at Works and contracts have been advertised for supervisory contractors. Work will commence in 2018.

Point 16 is the Gerehu 38 Affordable Housing Pilot Project where 1,762 allotments are being made available free to qualifying citizens. The earthworks have been completed and power and water services are now being constructed. Together with the concessional funding at BSP this will make housing accessible to ordinary Papua New Guineans and drive construction and employment. It can provide an example to duplicate in other centres.

Point 17 is for the commencement of the new Enga Provincial Hospital construction and Mount Hagen Hospital PPP redevelopment plan in 2018.

Point 18 is for the ceasing of closed tender financing which Cabinet has approved and the bringing forward the National Procurement Authority Bill which is ready to come back to Cabinet after changes were requested by Cabinet.

Point 19 requires audited accounts for SOEs and Statutory Authorities by mid-2018.

As Treasurer I will be tabling all the reports for the Agencies under my responsibility as soon as they are cleared by Cabinet.

Point 20 is to have all prescribed Boards appointed. This is underway particularly under the State Enterprises Minister and the Agriculture Minister.

Point 21 refers to freeing up resource landowner benefits; 1) the PNG LNG landowners vetting issues are ongoing but royalty payments to the plant site landowners have commenced and it is anticipated to shortly resolve the pipeline first payments and progress to the conclusion the clan vetting at the gas fields.

  1. ii) the OK Tedi landowner CMCA and Non-CMCA have funds held in Trust that has been cleared by the Courts and I am waiting for advice from the Justice

Department to authorise some of the pending contracted works against those funds.

Point 22 proposed to suspend proposed amendments to the Lands Act, the lPA Act, the Agriculture Investment Act, the Agriculture Administration Adjustment Act and the Mineral Resources Authority and the Mining Act to allow further consultation. This has been done.

Point 23 refers to the National Energy Authority Bill. This should refer to the Petroleum Authority Bill which is being finalised for Parliament.

Point 24 refers to progressing the Population Policy and funding has been provided in the 2018 budget under the Sustainable Development Program at Planning for this.

Point 25 refers to Medium Term Development Plan3 to be published in 2018. This is the 5-year development plan and indicator targets for the government of the day which will incorporate the United Nations Sustainable Development Goals.

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PM: Best Budget in 16yrs

By CLIFFORD FAIPARIK (The National )

 

PRIME Minister Peter O’Neill says the 2018 national budget, passed by Parliament last evening, is the best he has seen in the past 16 years, including when he served as the Treasurer.

He yesterday criticised the Opposition response to the K14.7 billion budget, calling on Shadow Treasurer Ian Ling-Stuckey to withdraw his “fake budget” remark.

“This is very disappointing as it will give a bad signal to our international investors. I’m calling on the Shadow Treasury Ian Ling- Stuckey to withdraw his statement,” he said.

“This is by far one of the best budgets that I have ever seen since I have been in this Parliament for 16 years now. That includes the budget that I have presented as well.”

O’Neill had served as a treasurer in the Sir Michael Somare-led government.

“I say this because this budget is now putting us on a course to make sure that this country’s economic base and growth will be such that it can be self-sustainable,” he said.

“So it is quite disappointing that some of the terminologies that he (Ling-Stuckey) used are unbecoming of leaders of this honourable house. We have to be careful of how we portray the image of our country, our parliament and ourselves.

“Sometimes for short political convenience and point-scoring we say things and do things that are not really in the best interest of our country. We have to be constructive.

“It’s always easy to have a blame-game going on in politics. But some of us want to move ahead and met the challenges ahead of us.”

Before it rose for the Christmas break, Parliament passed the Tax Administration Bill 2017 and the Public Money Management Bill 2017. Parliament will resume sitting on Feb 6 next year.

Government Clamps down on Corporate Veil – Corporate Firms pays more Taxes

A look into 2018 National Budget

1st December 2017

Currently, a “corporate veil” exists which does not allow the CG to collect the income tax from the company’s holding company or related companies even if it has been distributed as a dividend or transferred as a non-monetary asset to those group holding companies.

In this Budget, the Government will remove the “corporate veil” to make the parent (holding) company and other groups of companies liable for the tax liability incurred by the subsidiary company. This will allow the CG to collect tax distributed as dividends or transferred as a non- monetary asset to other Group companies in PNG or overseas.

This measure will be revenue positive in the medium to long term and is expected to be effective 1st January 2018.

There are cases where large corporations’ profits generated from business operations in PNG pay little or no income tax with profits paid over to its holding companies largely as dividend payments. The paying of the company’s cash as dividends in conjunction with the reduction in the company’s non-cash assets leaves the IRC unable to collect any outstanding tax liabilities from the company.

These large corporations may have a large tax liability and be stripped of all assets leaving the Commissioner General (CG) unable to collect income tax assessed to the company.

NO NEW TAXES – Tax Payers Delight

30th November 2017

 

The handing down of the National Budget 2018 drew a sigh of relief for averages citizens in the country. For the first time in many years, there was NO NEW TAXES in the budget.

 

The Government has however decided to ensure that the Internal Revenue Commission goes out and does what it is required to do, COLLECT TAXES!

 

The Tax Collection has been lacking in the Commission for many years piling the pressure on the Government to increase taxes in the past. This year, that has been changed and NO new Taxes or any increase in Taxes are included in the Budget.

 

The Government has also removed the “Training Levy” which was supposed to raise K75m in the 2018 budget

Government taken measures to manage wild spendings by SOE’s

November 30, 2017

By ISAAC NICHOLAS

The Government has taken steps to centralise the budgetary process by cracking down on some public and statutory bodies collecting public monies and spend these outside of the Budget.

Deputy Prime Minister and Minister for Treasury and Finance Charles Abel said the Government is serious about improving the fiscal health of the country and this bill is a demonstration of that serious intent.

“Public funds that are raised by public and statutory bodies as non-tax revenue rightly belong in the Consolidated Revenue Fund so that they may be appropriated for expenditure by Parliament to meet the objectives of the Government.”

Opposition Leader Patrick Pruaitch interjected claiming that the bill is part of the budget bills and in normal tradition this bill must be passed along with the budget.

“Why are we dealing with Budget Bills separately when the debate on the budget has been adjourned to next week Tuesday? Can we stop sneaking in stuff? We need to be able to understand the bills and it is part of the budget papers. It is attached to the budget bills.”

Prime Minister Peter O’Neill had to intervene to allow Mr Abel to introduce the bill, make his speech and defer the passing to Tuesday next week.

Minister Abel then proceeded saying that for too long, it has been the practice of some public and statutory bodies to retain, without authority, this non tax revenue to meet operational and other expenditures.

“These expenditures have taken place outside the budget process and this is unacceptable to government. Some, but not all, public and statutory do have legislation in place that purportedly allows them to retain this non-profit revenue, but those provisions have always offended against the best principles of public financial management and this Bill remedies those matters.

The Bill binds all public and statutory bodies. State owned Enterprises are excluded as they are not statutory bodies.

The Bill does not apply to the Bougainville or any public or statutory body created by the Bougainville Government.

The Government has decided to explicitly exempt Kumul Consolidated Holdings, Kumul Petroleum Company and the Kumul Minerals Company from this law as fiscal arrangements to them are currently being reviewed.

https://postcourier.com.pg/govt-cracks-budget-spending-soes/

DPM Briefs World Bank

Press Release : Office of the Prime Minister

 

Deputy Prime Minister Briefs World Bank and IMF on Next Moves to Advance PNG Economy
Submarine Internet Cable and Concessional Funding for Restructuring Debt Discussed

Engagement with the World Bank and International Monetary Fund, that will stimulate positive economic development in the face of global challenges, has been advanced at meetings in Washington D.C. by the Deputy Prime Minister and Treasurer, Hon. Charles Abel MP.

Deputy Prime Minister Abel said the new submarine fibre optic communications cable project, that will deliver cheaper and faster Internet, and the provision of concessional financing for the restructuring of existing debt, will deliver positive economy stimulus for the economy.

“Papua New Guinea has a close working relationship with the World Bank and IMF, and the benefits of this engagement will become even more obvious to our people with the delivery of cheaper and faster Internet.

“Working with the World Bank, and also our partners in Australia, the new submarine communications cable will deliver greater Internet access for Papua New Guineans.

“The new communications cable will make the Internet we received on our computers and smart phones much faster, and with the increased supply we will see Internet data prices fall.

“Increased access to the Internet is essential if we are to advance Papua New Guinea’s economy and improve service delivery.

“The submarine cable has been the subject of much discussion in recent years, and now we are moving ahead so that it will be in place ahead of the APEC Summit.

“The time given to our country by the World Bank and IMF executive for meetings in Washington was tremendous.

“I took the opportunity to remind them of the particular circumstances of Papua New Guinea and the Pacific small island states.

“I said PNG has globally significant natural assets to build a new, responsible, sustainable economy that brings inclusive development to its people but also can support climate change mitigation globally.

“We are confronted with our immediate development challenges and are also on the frontline of the effects of climate change.”

The Deputy Prime Minister said discussions with the World Bank on restructuring existing debt with concessional funding will further simplify debt that has been established over recent decades, and reduce servicing costs.

“Papua New Guinea has never defaulted on a debt payment, and this is respected by global institutions such as the World Bank and the International Monetary Fund.

“We are in talks with the World Bank and IMF so that we can bring together a number of scattered debts and consolidate these under a single debt facility at a much more favourable interest rate.

“Debt consolidation will save public funds and retire outstanding loans quicker than had previously been possible.”

Deputy Prime Minister Abel was accompanied by Treasury Secretary, Dairi Vele, and the Governor for the Bank of Papua New Guinea, Loi Bakani.

As well as the main Plenary Sessions of the World Bank Meeting, the DPM participated on 3 panels, including a panel with the World Bank CEO, and the Finance Ministers for Indonesia and Serbia, on Asia and the Growing Middle Class and Inclusive Development.

The DPM also had 15 meetings including separate meetings with CEO of the World Bank, Kristalina Gregorieva, Asia Pacific Director, Victoria Kwakwa, and Australian Treasurer, Scott Morrison.

Kuman Confident of Growth in Education

BY :  JERRY SEFE ( Post Courier )

Education Minister Nick Kuman is confident that the education sector is rapidly advancing due to the government’s firm commitment.

Mr Kuman said this last week when wishing the Grade 10s around the country “best of luck” in their national exams while acknowledging the government’s firm support with the tuition fee free (TFF) policy over the years.

He said the continuing commitment of the government is reflected in the “follow-on national education plan” (NEP) which builds on the many successes that the government has achieved in education in recent years, as well as learning from its mistakes.

“The NEP provides a roadmap for implementing the government’s commitment by providing education and training in technical and vocational skills that are essential for human development and building the nation,” Mr Kuman said.

The minister also said the focus today is to ensure that all the people of Papua New Guinea have the opportunity to have access to education and training that they are entitled to as citizens.

“Papua New Guineans must not be left out on education because of various contributing factors such as age groups, everyone is entitled to education and learning does not stop there,” he said.

“Basically our point and focus is on improving quality of education standard and take into account of widespread consultation as well gender equality which is a cross-cutting issue reflected in the plan all for a positive outcome of quality leaning.”

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