Namah supports union’s call

OPPOSITION Leader Belden Namah has backed the PNG Trade Union Congress’s stance against amendments made to the Central Bank Act.
“The PNG Trade Union Congress is dead right,” Namah said in a statement.
“The amendments to the Central Banking Act were passed without debate in the last sitting of Parliament and now paves the way for the Government to print money.
“The amendments to the Central Banking Act (2000) will force the Central Bank to accommodate fiscal policy by direct injection of liquidity into the financial system under quantitative easing so that the Government can raise more domestic borrowing.”
The Vanimo-Green MP said this would have an adverse effect on Papua New Guinea’s foreign exchange which was already in a difficult position.
“This will impact inflation negatively,” Namah said.
He warned in the supplementary budget debate that the changes were brought about by Treasurer Ian Ling-Stuckey to force the Government to inject more cash into the financial systems so that the Government could raise more domestic borrowing.
“This is bad policy as countries use quantitative easing as a last resort when interest rates fail to stimulate the economy in conditions of financial shock.
“The government is abusing this to create conditions for itself to borrow more.
“As if shaking investor confidence is not enough, now the Government has weakened the Central Bank as an independent institution.
“This will have dire consequences ranging from the loss of confidence in PNG’s monetary policy management to derailing our international credit rating.”
Namah said shadow Treasurer Joseph Lelang had already told the parliament that a large debt overhang equivalent to 70 per cent of the gross domestic product (GDP) could initiate a balance of payment crisis as it did in 1994.
“Now the government has legislated to bring the debt to GDP ratio to 60 per cent, we can expect more shocks,” Namah said.
“Prime Minister James Marape and his treasurer (Ling-Stuckey) has completely damaged investor confidence and sent the country into negative growth.”