Save govt revenue: Official

By DALE LUMA
AN academic says the Government should save revenue it gets from investments or construction phase of the Papua LNG project rather than spending it.
Associate professor of economics, Martin Davis, suggested this during the 2022 PNG Update held at the University of Papua New Guinea (UPNG).
Davis said there were four phases to a resource project and the state needed to take appropriate actions to ensure maximum and prudent benefits from the beginning to the end of the project’s life.
“There are four phases to a project, these include investment, high production and low government take, high production and high government take and falling production yields where revenues fall,” he said. Davis said the Government needed to be judicious regarding its spending throughout the phases in order to have funds to expand once the project enters its fourth phase.
He said the PNG LNG project was currently in its second phase with high production and low government take.
“It (Government) needs to save when the PNG LNG enters the third phase,” Davis said.
Davis was speaking on the topic of having an optimal macro policy and the resource project cycle: How should Papua New Guinea set a Policy for the Papua LNG.
The front-end-engineering-design (Feed) stage of the US$12 billion (about K41.28b) Papua LNG project will take about two years, and another four years for the actual construction.