Pruaitch flags revenue fund

THE Government will consider establishing an offshore stabilisation fund for future PNG LNG project benefits, Treasurer Patrick Pruaitch said yesterday.
Mr Pruaitch said the project would have major ramifications for PNG, which has now entered an important transition phase to a higher level.
Resource projects could represent a great opportunity in terms of gross domestic product (GDP) growth, infrastructure development, employment and higher exports and government revenue, the minister added.
“However, resource projects can also be a curse if the Government cannot translate the opportunities created into a better quality of life for all through building up educational and health care facilities – that is our challenge for the future,” Mr Pruaitch said.
“We plan to harness the opportunities and to be prudent in our approach.
“As part of this, the Government will be considering the merits for PNG in establishing an offshore stabilisation fund once the tax revenue from the project starts to flow.
“We stand on the threshold of a new era,” he added.
“The project partners are now ready to spend some US$15 billion (K42 billion) to make this project a reality.
“Every partner in this massive exercise stands to make significant gains from the LNG project.
“We have also concluded a compact with more than 60,000 landowners in the footprint area who will derive direct and indirect benefits, inclusive of a future generation fund,” Mr Pruaitch said.
“National, provincial and local level governments will all gain significantly increased revenues once exports commence as will our project partners – ExxonMobil, Oil Search, Santos, Nippon Oil, Mineral Resource Development Corporation and Petromin Holdings Ltd.”
Mr Pruaitch said PNG had been conditioned to believe that the discovered natural gas resources were going to be piped all the way to Queensland, Australia, because there were no other suitable development options available.
“Even though there are some regrets that the pipeline was never built, I can assure you all that (Southern Highlands province) Governor (Anderson) Agiru in particular, along with our Prime Minister and the entire Cabinet, are extremely glad that that proposed project was written off,” Mr Pruaitch said.
“The pipeline to Australia would have restricted our role to a passive seller of natural gas at near rock bottom prices.
“By contrast, PNG LNG is opening up major domestic opportunities for PNG and its six million people,” he said.
Mr Pruaitch said that taxes and dividends from the project could be used to best effect for the Government’s broader socio-economic agenda through delivery of better schools, health centres and improved living standards generally.