O’Neill lashes out on borrowing

THE Government’s accelerated borrowing programme of K3.8 billion will only lead to the collapse of Papua New Guinea’s economy in the coming years and dependency on the International Monetary Fund (IMF) and World Bank, former Prime Minister Peter O’Neill says.
O’Neill said this when responding to Treasurer Ian Ling-Stuckey’s ministerial statement in Parliament this week on the Government’s borrowing.
Ling-Stuckey said the Government was seeking an extra K3.8 billion in international financing to support the 2020 Budget.
He also said the Government had applied for a staff monitored programme with the IMF.
“This historic letter was signed by the Prime Minister (James Marape), Bank of Papua New Guinea governor (Loi Bakani) and myself,” Ling-Stuckey said.
“We expect to hear shortly on the outcomes of that application.
“This application opens the doors for the extra K3,805 million (K3.8 billion) in international financing vital for building and transforming our economy.
“We cannot deliver the 2020 Budget without it.”
However, O’Neill condemned the announcement to borrow the K3.8 billion saying it would not be invested in infrastructure, but just to pay the Government’s increasing spending. “The accelerated borrowing programme of K3.8 billion is absolute madness that can only lead to the collapse of our economy in the coming years and dependency on the IMF and World Bank,” he said.
“This is a debt trap he (Ling-Stuckey) is getting the country into and makes no economic sense as it is to be spent on budget support, consumption and consultants.
“It is not for building new roads, schools or hospitals that will advance our economy.
“This loan sells out our sovereignty and independence, and makes our people slaves to the very international institutions from which he is being advised through his foreign consultants.
“The Treasurer will now have borrowed close to K15 billion in less than one year.”
“This is a new and alarming record for our country that will come with great pain simply because this Government is only thinking of buying votes in the 2022 elections.
“Papua New Guinea had only borrowed a total of K27 billion in the 44 years since Independence, and now, in the space of a few months, the Treasurer has borrowed more than half that amount again. Does this government have any thought for the future of our children and our country against their personal desire to be in power?
“Our people are now asking is this the price we have to pay to ‘Take back PNG’ that they will sell out the country to international organisations and a harmful structural adjustment programme.
“This is an option of last resort, when a government has no solutions and so no choice but to beg.”
O’Neill said there was a simple rule for sound economic governance and that is to live within your means.
“You only borrow to invest in stimulating the economy,” he said.
“This loan is a desperate measure for a government that has failed to stimulate investment in major projects and now the economy is in free fall.
“This economic slump, and the related downturn in confidence in the economy by our business sector is clear in a recent survey by Westpac Bank.
“All three surveyed indices covering expectations in recruitment, investment and profits fell by more than a half to two thirds.
“This is after these has all risen steadily over the five years leading to 2019 and business confidence was high.” O’Neill said the Treasurer’s announcement was also the height of hypocrisy after all of the statements he made while in Opposition against the previous and current governments.
“Ling-Stuckey demanded that both myself and Marape should put an end to any further debt, but then, as soon as he was appointed Treasurer, he has begged for loans,” he said.
“This additional loan will create more hardship for our people now, and the country will take more than the next 10 years to recover and pay back this money.”
O’Neill said the problem for the Government, and in particular, the Treasurer, was a lack of economic management experience and it was showing.
“The Treasurer’s background is in poker machines, where he did not have to think much because his revenue came from people addicted to gambling,” he said.
“That is just a lazy business and gives him no credentials to manage a complex national economy.
“Prudent management of our economy is what is needed right now.
“The Treasurer cannot provide that leadership because he has no experience in economic management.”