Not the reward, explain K125m

Editorial, Normal

The National, Monday, June 6th 2011

IT is curious that the Nasfund board has chosen to put out a K50,000 reward for information to identify anonymous authors who have chosen to name joint chief executive officer Rod Mitchel in a bad light.
While malicious and defamatory publications ought never to be condoned, the issue really is the K125 million special and exclusive bond issue for the Kokopo electorate.
The Nasfund board needs to make a univocal explanation on exactly what this issue is all about.
Contributors would like to know whether their money was at risk in this deal.
Apparently, the money had been paid out and much of it spent on projects identified in the electorate.
Some of the questions raised in the anonymous blog, complained of by Mitchell, actually does warrant decent answers.
Is the bond issue legal or illegal, for instance?
What happened to the funds?
Why was this bond issued to only one electorate and not the other 88?
Will the state repay the K125 million?
What are the terms of the bond?
When should the money be repaid, if at all?
Did the Nasfund board approve this bond issue?
Where are the board papers?
Does this issuance meet Central Bank and Treasury guidelines and processes?
Do they fall within the ambit of the Public Finances Management Act?
Has it been approved by cabinet?
These, to us contributors, are legitimate issues and warrant a decent reply from the board and management of Nasfund.
It warrants an explanation from the finance minister and the prime minister whose signature is on the issue. That signature had since been denied and was said to have been forged.
If that was so, then already, something is terribly wrong with the bond issue.
We are not averse to the use of Nasfund money for development purposes. A lot of successful countries in the region had been built on the back of workers mutual funds.
Indeed, the bond issue might actually be a decent way to fund development projects right around the country.
We seem to recall that much of the Poreporena Freeway was funded by Nasfund.
The public workers fund, Eda Supa, is providing capital to restore the seat of PNG democracy, the old House of Assembly.
Other important infrastructure in the country could be funded by one or the other of the super funds.
Indeed, instead of the government going to borrow from commercial banks at horrendous interest rates, the government can borrow from the funds and repay the workers with interest.
In the end, that would be building up the workers’ mo-ney.
Of course, the government would need to ensure fund guidelines do provide for such investments and where they do not.
Once that is accomplished, it needs to be applied universally so that there is no special one-off sweet heart deals such as we have seen with the Kokopo bond issuance.
Always, there needs to be constant and careful monitoring and oversight on investment issues.
Nasfund contributors lost up to 15% of their savings when the board went off investing in all manner of the projects under political pressure and direction.
That was an unmitigated disaster and a powerful lesson in what not to do.
While we will support use of funds for development purposes, our primary interest as contributors is to get a return on investment with interest.
We will not support pro-jects that will be a waste of workers’ hard-earned money.
We are happy to note that, in recent times, Nasfund had been fairly well managed returning huge interests of up to one-third of one’s savings.
This is excellent and we would like to see this continued, but political interference in the running of the fund, and particularly in relation to investments of the kind complained off, should not be tolerated.
The government’s record of accounts and book-keeping had been atrocious.
We would not want their sticky fingers on workers’ funds.
More especially, when the government is yet to pay up its contributions of some K200 million to the Public Officers Superannuation Fund.