Opposition: Economy unhealthy

National, Normal

The National, Wednesday 5th September, 2012

THE economy is not healthy and the government must spend within its means, the opposition says.
Despite the government’s claims recently that the economy was well, opposition treasury and finance spokesman Joseph Lelang said in parliament last Friday during a media workshop that the country may soon face a shift that would affect the people.
“I want to warn the government that we may face a shift in the economy sooner than anticipated because the government is overspending,” he said.
“Our people are being misled because they are pretending that all is well.”
Lelang raised the concern that exports were dropping while imports had risen which meant that government revenue as well as foreign reserves were falling.
“This means we are paying more than what we are earning and this is affecting the domestic markets.”
Lelang said Papua New Guinea’s commodity prices were going down and “it is affecting the agricultural industry where our local farmers are now feeling the pain of it because they are
earning less.”
 “The kina is appreciating when it is not supposed to but due to the large capital inflows of the LNG gas project, it is keeping the kina strong.”
He said the low global prices as well as the appreciating kina were not good because the country was getting less for commodity.
“The low wage income earners will feel the pain of having to pay more for goods and services,” he said.
Lelang said he was equally concerned at the rate at which the country was accumulating debt, something that should not happen during such economic situations.
“From 1990 to 1998 the debt was only K8 million and now there is a K1.4 billion budget deficit, of which K5.13 million is the actual budget deficit and K900 million from equity financing (PNG LNG project).” 
He said the government had not yet explained how it was going to address this.
He said as a concerned citizen he was urging the government to cut down major spending.
“The solution is not to borrow but minimise major spending.”
and cut down on some of the major spending because if we are not cautious now, we can’t deny the fact that a major crisis is looming and conditions are just right for it to happen.”