Tiensten’s statement on budget shortfall misleading

Letters, Normal

AS a vivid follower of PNG politics, I would like to respond to the independent message by Planning Minister Paul Tiensten.
He said next year’s budget would be K2 billion less than this year and admitted a paradigm shift was necessary in Government policy and service delivery was necessary to bring change to rural people.
This was because of the global economic downturn, which saw the demand and price for commodities fall.
I find his statements misleading.
The NA-led Government must not blame the global recession for this shortfall.
Our financial (banking) system raises a significant part or almost all of its funds through deposit takings domestically and invests those funds within PNG and the South Pacific region.
The commercial banks in PNG are generally sound with high capital adequacy ratios and no exposure to sophisticated financial products that are linked to the sub-prime mortgage market such as in the US.
The high level of liquidity in the banking system over the years has provided sufficient funds for commercial banks to carry out their business activities without having to borrow.
Despite the high level of liquidity, commercial banks lending was prudent with non-performing loans declining over the years.
The banks in PNG are well managed and closely regulated and, so far, have not been affected by the global financial crisis.
The effect of the slowdown in economic growth in the major economies, including China and India, has resulted in declines in prices of export commodities.
This would lead to lower production and export revenue as well as reduced tax revenue to the Government.
The recent appreciation of the kina against the US and Australian dollars will reduce inflationary pressures through lower import prices.
This has also led to high demand for foreign currency for imports.
I see no point for the minister to project financial year 2010 falling short by K2 billion.
This is ridiculous!
After 34 years of Independence and billions of kina flushed down the drain, we have not progressed to a stage befitting and consistent with a nation rich in natural resources.
Stop fooling the people of Papua New Guinea.
Where has all the money gone?
Are we to believe that proceeds from LNG would be put to good use considering our bad track record?
The Government has not been able to account for the billions received from minerals at Bougainville, Misima, Lihir, Ok Tedi, Porgera and oil and gas from Highland provinces.
The NA-led Government has a lot to explain to the people of Papua New Guinea.

Mehrra Minne Kipefa
Obura Wonenara