Category Archives: Tax

Tariffs Counter APEC Free Trade

By : Post Courier

THE recent moves to increase more than 900 tariffs run counter to the principles of APEC, which champions free and open trade.

This is according to the Opposition, who says the O’Neill Government should review its approach to trade as a matter of urgency so that it does not contradict priority APEC resolutions.

Shadow Minister for Treasury, Ian Ling-Stuckey, said the recent senior official’s meeting in Port Moresby highlighted APEC’s support for a rules-based, free, open, fair, transparent and inclusive multilateral trading system.

“We need to be true to APEC’s mission of ‘championing free and open trade and investment, promoting and accelerating regional economic integration,” Mr Ling-Stuckey said.

“The O’Neill Government needs to urgently review its approaches to trade as the recent moves to increase more than 900 tariffs run counter to the principles of APEC.

“We do not want to come across as hypocrites as we host this meeting, otherwise that would really be wasting opportunities from what will be an expensive summit for PNG.

“We should urgently finish the proposed second stage of the Sir Nagora Tax Review, which indicated it would look at the issue of tariffs, certainly in a more systematic and efficient manner than the recent government changes.

“We should look at better policies to get per capita growth going again and ensure the benefits are spread across our rural communities, not just some isolated projects benefitting a few.

“We need to think about getting our agricultural products to the markets of all countries in APEC, not just PNG supermarkets under protectionist barriers.

“With PNG hosting the APEC Summit in November 2018, it is important that we seize its opportunities for promoting PNG and advancing our development.

“While the Alternative Government considers that there were much better ways to promote PNG and all it has to offer, and wiser ways to invest the huge costs for the summit into health, education and infrastructure, it is now too late and it would be too embarrassing to pull out from hosting the Leaders Summit.”There are some important things we need to do to make the most of this opportunity.”

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.

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.