Lelang cautions govt about borrowing trend

PAPUA New Guinea’s economy will be at risk if the Government continues to borrow and does not rein in spending, Member for Kandrian Gloucester Joseph Lelang says.
“We need to tighten our expenditure and live within our means,” Lelang said.
Lelang made the remarks during the debate on the report presented by the Treasurer Sam Basil in Parliament last week.
“We need to be cautious about the options to finance our budgets through the issuance of external debts.
“For the last seven years, we have relied on external debts by borrowing extensively.
“Then we moved to short term domestic borrowing, and then moved to longer domestic debt as part of the medium debt strategy.
“Now we are moving back to external debts. Exposing our budget to exchange rate and interest rate risk is dangerous,” Lelang said.
“ We will be vulnerable to exchange rate and interest rate fluctuations.”
He said the total debt had risen from K8 billion to K27 billion over the last seven years but figure would be higher when the debts of state-owned enterprises were included.
Lelang said the Treasury Department also needed to relook at the cash flow management system and allow the public debt committee to manage the budget and cash flow of the Government and do their work as required by legislation.
He said the other budget expenditure committee chaired by the chief secretary and people outside Treasury needed to be abolished.
Lelang said the another issue was for the Government to abolish the illegal liability trust account set up by the Finance department (2013-2015) to sweep all unused funds into it.
He said cheques had been drawn to service providers and programmes out of the trust account even in the close of accounts in January and February of each fiscal year.
He said although it was called creative accounting, it was illegal.