Govt’s economic measures yet to materialise, says Barker

By DALE LUMA
MUCH of the economic support measures outlined by the Government as the Covid-19 response plan are yet to materialise, says economist Paul Barker.
Barker, the Institute of National Affairs executive director, told The National that the Government had listed a range of broad measures following the Covid-19 outbreak and lockdown.
“They were meant to support the private sector to sustain economic activities and livelihoods and to reinforce health and welfare services,” he said.
“In reality, with the major drop in revenue and the need to borrow further both domestically and internationally, economic support measures have, in effect not materialised.
“Efforts have focused largely on encouraging banks and landlords to offer more generous lending and rental arrangements for suffering businesses and households, for superannuation funds to provide interim unemployment benefits (from early access to contributions) and the tax office to make some deadline concessions for struggling businesses.”
Barker said all countries had been borrowing heavily to sustain control, social and economic support measures, designed to provide relief and interim economic stimulus, but the stronger economies can clearly provide more such support for longer.
“Developing countries in particular are hard pressed to sustain any such support, even though they have been granted, as with PNG, very concessional loans from international sources,” he said.
“In PNG’s case, the economy was already subdued at the beginning of 2020, after many years of slow economic and employment growth, even before the virus
disrupted trade and global markets.
“PNG had already been dependent upon substantial deficit financing since 2012, with weak revenue particularly from the resource sector and poor expenditure control.”