THE Government has yet again negotiated a very poor project agreement for Papua New Guinea (PNG) in 2019, following the first poor deal in the PNG LNG project gas agreement in 2008.
The biggest problem is that PNG has just surrendered its national sovereignty, economic, commercial, ownership and social rights in the Papua LNG project gas agreement in 2019.
This has immediately made investors so powerful that they can now do anything and everything under the sun to cripple the Government and PNG.
One obvious critical economic right is the entitlement for the Government to use the Income Tax Law to raise revenues to implement the national budget for the country, as a sovereign state.
This income generating RIGHT must not be surrendered, as it will cripple the operations of the Government and economy.
It is a fundamental right, not just for PNG but any sovereign country in the world.
Sadly, this taxation right of the Government was surrendered in the Papua LNG Project gas agreement, which was signed recently.
The Government gave away very generous tax concessions and tax exemptions in the gas agreement for the entire life of the Papua LNG Project.
It means the tax revenue losses from these tax concessions and tax exemptions will enrich the management, board members, shareholders, financiers and foreign governments at the expense of the development needs of PNG.
In fact this country is reeling on its knees under the weight of mounting budget deficits every year and is sinking under an enormous weight of growing national debt burden.
This deficit-debt-cycle trap the country is now in has been created by the project agreements of all the mineral, petroleum, and gas projects in PNG.
The project agreements have enabled the project developers to siphoned billions of dollars in tax revenues abroad every year at the expense of PNG.
This has created a deficit-debt-cycle trap the country now finds itself in and cannot get out of it.
The recently signed Papua LNG project gas agreement has compounded this trap and added more miseries for PNG.
The Government must abandon the Papua LNG gas agreement.
It can either enter into a new deal with the project developers with more favourable terms for PNG or revitalise and rely on the various legislations governing the mining, oil, and gas operations in PNG without surrendering the country’s fundamental rights.
Concerned Citizen – POM