How to finance deficit budget a challenge: MP


ONE of the most important challenges facing the 2018 Budget to be tabled next week in Parliament is how to finance the budget deficit, says Shadow Minister for Treasury and Finance Ian Ling-Stuckey.
He was speaking at a community development forum at Mangai village in the Tikana local level government last Wednesday.
“As people know, PNG’s public debt levels have been exploding,” he said.
“The actual size of the increase is from K8.4 billion in 2012 to at least K23.9 billion in 2017.”
Ling-Stuckey said there were “other very large debts hidden. An example was the Oil Search share loans which were hidden in Kumul Petroleum until they were announced and paid off in September 2017,” he said.
“This helps explain some figures from the Treasury in July that they had extra unbudgeted loan cost of K1,175m in 2017.
“No wonder the government had to dump the Oil Search shares. It was such a massive and problematic deal that should have gone to Parliament.
“Such hidden debts on wind-up, according to Kumul itself, cost K760m. The actual costs were likely to be even higher when commissions and other hidden fees are included.”
Ling-Stuckey  said another form of hidden debts were the unpaid government bills, many of them legitimate, to PNG businesses because of the country’s cash crisis.
He also blamed the increase in interest costs to the “explosion in public debt”.
“These have increased from K335m in 2012 to K1,582m in 2017, after needing another K150 million in the 2017 Supplementary Budget,” he said.
“This blow-out in interest costs is nearly double the K600m cost of introducing tuition-free education.”