Private sector ‘disappointed’

EVEN though the K27.3 billion 2024 Budget has been considered “fair”, the private sector is disappointed that its submissions to the Treasury Department were overlooked, says the Port Moresby Chamber of Commerce and Industry.
Chamber president Rio Fiocco said it was the private sector that created employment and paid a large portion of taxes.
“It is disappointing that various submissions sent to Treasury were not addressed and more could have been done to create a business-friendly environment,” he said.
Among others, the concerns included the outstanding payment of more than K600 million owed to independent power producers (IPP) by PNG Power Limited (PPL); the banking tax of 45 per cent introduced this year still remained; and a continuous foreign exchange (FX) supply issue.
“The Government needs to address these issues; money needs to be allocated to PNG Power so that these bills are paid,” Fiocco said.
“It is not a good sign that the Government cannot pay its debts, and all of this sends a very bad signal to the international community, in particular businesses who are looking at possibly setting up in PNG; the risks are too high.
“What is the point of investing if you can’t pay dividends to your shareholders overseas?”
Fiocco said the supply of FX still topped the list of challenges facing the private sector.
“While the Bank of PNG is doing a much better job this year, they have increased the foreign exchange intervention each month, from what was between US$30 million and US$40 million (about K11mil and K149mil) to US$100 million (about K37mil) per month,” he said.
“Unfortunately, that is still not enough and, hopefully next year, the Central Bank will do more interventions.”
Fiocco said there was no competition in the banking sector.
“We have one very large bank that dominates the market,” he said. “We have a huge unbanked population.
“People are just struggling to open bank accounts; the Government just can’t get enough NID (national identification) cards back to the provinces so, without a proper ID, people can’t open a bank account.
“We need more local and foreign banks; the tax rates have to be conducive to allow for those companies that want to convert to a bank in the case of Tisa and Credit Corp and a few others.”