Polye concerned over SWF

National, Normal

The National, Tuesday July 16th, 2013

 TREASURER Don Polye says he is concerned the proposed Kumul Holdings Ltd may subsume the Sovereign Wealth Fund (SWF) under its control.

He said the SWF should operate under its own legislation and dividends from the fund be paid direct into consolidated revenue to promote good governance and transparency.

Polye said state-owned enterprises and government agencies that dealt with proceeds from such funds should to factor them into the budget. 

“Some funds used have not been integrated into the budget process,” he said.

It is public money. It must go to through the budget process. Parliament has ultimate authority that sanctions expenditure of public finances for people’s benefit by their representatives through the parliamentary process,” he said in a statement. 

The SWF was established to manage royalties from the ExxonMobil led K36.05 billion PNG LNG project, which will go on-stream next year. 

The SWF is primarily intended to create macro-economic stability and to mitigate inflation, unemployment and erratic commodity prices fluctuations.

Polye said about 90% of the work on SWF had been completed and the remaining would be deliberated in parliament.

He added that an organic law, one similar to SWF’s, for the newly-proposed Kumul Holdings Ltd would be drafted to administer its affairs to promote corporate governance and manage investments. 

The treasurer was speaking at a courtesy call in parliament by consultants from the International Monetary Fund who were providing technical assistance to the government for the establishment of SWF. 

Polye admitted he was concerned that the announcement of proposed KHL by Prime Minister O’Neill would affect SWF.

“From Treasury’s perspective, when I saw the new structure of Kumul trust coming on board, I was very concerned it might affect the SWF,” he said.

“I communicated my position to the Prime Minister Peter O’Neill in writing and in a few discussions to see SWF established under an independent legislature like it has been established already. He agreed to it.”