THE most obvious symptom of economic mismanagement are an increasing national debt (loan stock outstanding, not repaid), increasing budget deficits (expenditure exceeds revenue) and increasing balance of payments deficits.
A balance of payment deficit is simply the difference between a county’s export of goods and services to and imports of the same from abroad.
In this context, imports exceed exports.
PNG is, at present, in this serious predicament as all these symptoms are showing up on the radar.
Yet, the Government, and all previous governments, failed to introduce a National Budget and economic reform to ensure that economic growth and development are not threatened but sustained over time.
Years of Budget deficit financing by borrowing from domestic and external sources is now a serious threat to national development.
The interest cost of loans borrowed by the Government is now heading towards 50 per cent of total Government spending.
This is a serious concern because national budget funding required development spending in PNG will now be diverted to debt serving.
It means funding required for building and sustaining public infrastructure and services (such health, education, transport infrastructure) and effective public service is now under a serious threat.
Ultimately, it will be the people of PNG who will suffer the most, as Government services start drying up due to lack of funding.
Deficit budget spending has not resulted in an increase in the export of commodities such as cocoa, coffee, copra and copra oil to pay for import of good and services required for development in PNG.
Instead, deficit spending is contributing to balance of payment deficits due to large debt service payments on external borrowings by the Government.
This is putting more pressure on the limited foreign exchange and international reserves of PNG, which will start drying up soon.
The proposed banking and communication sector tax is an obvious economic mismanagement and a political tax.
The Government intends to use this tax money to fund its economic mismanagement and wastage, through spending on unproductive government bureaucracy, debt service payments and on the provincial services and district services improvement programmes which our politicians control and benefit from.
Ultimately, the Marape Government and Parliamentarians want to use the tax money to start the campaign trail in January 2022.
Papua New Guineans, please think wisely and caste your vote in the coming 2022 National Elections, because you will pay this banking and communication sector tax through increased service charges.