PM: Govt to tighten law on SWFs

National, Normal

The National, Monday 21st November 2011

THE national government is adamant in preventing mismanagement of funds by tightening the Sovereign Wealth Fund (SWF) management law, Prime Minister Peter O’Neill said last week.
He said that last Friday when officiating at the opening of the Mataure Rabaul Microfinance Ltd office in Rabaul town, East New Britain.
“We have had world class mines like Bougainville, Ok Tedi and continue to have Lihir but revenues have been mismanaged as such and we don’t have any money now,” he said.
O’Neill said this was why the government was always struggling to make sure the little resources it got from the national budget were being spread around the country in a manner that would continue to bring services.
 “We must learn from the mismanagement of the wealth created by those big mining projects over the many years.”
O’Neill said the SWF management law would be tightened later this month in parliament and Sir Rabbie Namaliu had been tasked to manage it.
“Sir Rabbie has the integrity, standing and personal love for his country to manage the fund for our people and the future generation and not for this government.
“It is important that PNG has a law that will manage the fund, how we invest in that fund, how it reports to parliament every three months so that every Papua New Guinean knows the status of the money.”
Earlier, O’Neill said: “The importance of the PNG SWF cannot be understated.
“It aims to ensure PNG’s natural resource revenues are well-managed and used and support the economy and future development of our nation as envisaged in the PNG development strategies – the PNG Vision 2050, DSP and the MTDP.
“Nearly 40 nations around the world have sovereign wealth funds and it is time for PNG to benefit from this well-established practice of managing resource wealth.”
He said the welfare fund was designed to manage public mining and petroleum resource revenues.
There are two distinct operational arms – the stabilisation fund and the development fund.
“The stabilisation fund can help everyone in PNG.
“It will ensure a steady stream of revenues to the government budget for social and development spending.
“It will help protect PNG’s economy from the volatility and uncertainty in global markets that we continue to see. Without it PNG risks repeating the cycles of boom then bust, and not making the most from our resource wealth.
“PNG’s mining and petroleum resources will one day be exhausted.
“We cannot forget that they are limited and non-renewable.”