Budget not realistic, says Alotau MP

ALOTAU MP Charles Abel describes the K22 billion expenditure budget for next year as “not realistic”.
“Revenue is not going to suddenly jump by K2.5bil. Even if the Porgera Gold Mine start next year, most of the revenue will go to our share of the start-up costs and increased equity,” he said in response to the Budget in Parliament yesterday.
“The down time and startup costs are already at the K1 billion mark.
“This is apart from deductions to pay for our increased equity.
“Where is the K6 billion of debt financing going to come from?
“We have already borrowed K18 billion in two and half years and we are now asking for another K6 billion from our financiers.
“In 42 years of independence, we built a debt stock of K28 billion.
“In the last three years we have almost doubled this.
“The obvious concern is that we will be pressured into printing money from our Central Bank.
“We have already increased the Government’s overdraft at the Central Bank to K1.5 billion and asked the Central Bank to take up more government bonds. The Government is currently reviewing the Central Bank Act so they can make them follow political directions.
“Combined with low foreign currency levels and no direct foreign investment, borrowing more from the Central Bank, the same as printing more money, would place extreme pressure on the value of the kina.”