Lelang raises concern on finance

SHADOW Minister for Treasury and Finance Joseph Lelang is concerned the Government has not indicated whether it will slow down its spending or manage finances appropriately at affordable levels over the medium term.
“In particular, there is no sign of restrain on interest payments, arrears and personnel emoluments,” he said.
In view of the general elections approaching next year, Lelang said the Government would, no doubt, continue with its current policy stance of an expansionary fiscal policy to continue its spending spree.
The danger is that sooner than later, the Government will also attempt to review the Central Bank Act in order to force monetary policy to become accommodative of fiscal policy,” he said in a statement. “The Government has demonstrated this intention last year by using the Central Bank’s temporary advance facility like an overdraft account, plus issuing Treasury’s Covid-19 bonds and adopting quantitative easing which basically crowds out private sector economic growth in the country.
“If the Government chooses to “print money” next year, instead of controlling expenditures, then the businesses and people of PNG need to be cautioned and informed that hard and difficult times lay ahead for the country attributed to the Government.
“On financing, the Government, within two years upon gaining office and forming Government, has increase debt stock by K6 billion.
“As per the 2020 FBO (final budget outturn) report, there was a 91.9 per cent increase in total net borrowing of K6,501.5 million, compared with the 2019 FBO amount of K3,388.1 million.
“Whilst on the financing side, there has been a lot of international draw-down of concessional loans related to the Covid-19, it is disappointing that on the expenditure side, and there is minimum or no account of how these large borrowings have been used on the Covid 19-related spending.