Off-loading unprofitable government businesses analysed

By DALE LUMA
OFF-loading unprofitable government businesses has advantages but there will be little revenue to be gained from their sale, says Institute of National Affairs (INA) executive director Paul Barker.
He was responding to Government plans to sell some its companies which are not making money.
He said some of the companies needed capital to expand while others needed to perform their functions better.
Barker said some had “politicised boards and management not selected on merit”, thus undermining their capacity.
“Many (SOEs) play critical roles in providing essential public goods needed by households, businesses and government,” Barker said.
“Offloading non-essential or non-core business activities that are not making money is logical, if the private sector is willing to pay something for them and can invest needed capital into them and run them better.
“Media outlets of course such as EMTV and FM100 play important roles in PNG society, providing an important voice for the public with programmes like the talkback show.”
He said businesses such as the Motor Vehicle Insurance Ltd which had no logical place in government, except that it made a profit from its monopoly service, should be opened to competition to provide an improved and more affordable service to users.”
On State equity in resource projects, Barker said it had been a “long fixation in the Government, although the proceeds have widely been inadequately accounted for”.
“Buying major shareholdings in some extractive projects, including highly risky and experimental ventures, such as deep sea mining, has deflected public funds away from genuine government responsibilities and added to the debt burden for the whole community,” he said.