SWF needs crafting

 By GYNNIE KERO

THE sovereign wealth fund needs to be crafted in a way to benefit the mass Papua New Guineans, thus improving the socio economy, National Research Institute director Dr Thomas Webster said.

He was speaking at a seminar conducted yesterday to generate public debate on the sovereign wealth fund.

Webster said discussions on SWF were very important on what it’s going to look like.

Bank of Papua New Guinea senior officer Dr Gae Kauzi when commenting on the analysis of the SWF seminar said there should be a comparison on the original organic law and the new law.

He argued that the old law was based on years of hard work and strong written policy papers.

“We have to distinguish between the old organic law and new law. Which model will serve the stability function model that will strengthen the study.

“The new model lacks that ground work. No proper policy ground work and was pushed from the top.

“If the study can look at that it will create good debate,” Kauzi said.

In relation to the announcement by the Finance Minister, James Marape, earlier this month that both the savings and stabilisation funds would get 25% of all LNG and mineral revenues under the new approved SWF structure, Kauzi said:

 “Only the dividends will flow into the stabilisation fund, but only 50%. Taxes will not go into stabilisation fund.

“Fifty percent of that dividend will go into the future’s fund which will replace the development fund under the old model.

“So if you have only the dividends to go into the SWF, will that serve the stability function? The answer is no, because you have all other revenues going straight into the budget.”

He said the country needs efficient and effective budget management so that most Papua New Guineans can benefit from the LNG project. 

“How can rest of PNG benefit from LNG project? It’s all good that media turn to pick up on GDP growth, does that matter for small people?

“Answer lies in effective and efficient budget management and that’s where SWF will try to address instead of all funds being pumped into the budget for spending, let it be managed through SWF so that and its spent wisely on projects.”