Vele: Money should go to SWF

 By SHIRLEY MAULUDU

FUNDS for State-owned entities (SOEs) which have interests in extractive industry projects should all go into the Sovereign Wealth Fund (SWF) before distribution, according to the SWF technical team.

Treasury Secretary Dairi Vele, who is a member of the team, said they had agreed to submissions recommending that SOE funds from projects should first be put into SWF and not go directly to the entities.

He made the remark during oral submissions on SWF at Parliament yesterday. 

“We would prefer that all the money come into the fund. When they (SOEs) want some money, they can ask through the budget process and we can go back and give that money to them,” Vele said.

“Obviously their (SOEs) argument is that the Government is not efficient enough and when it gets into Waigani, it’s hard to come out or it’s against other competing priorities.

“Obviously how the fund is structured, the legislation is structured, they (SOEs) should have a plan, that plan is registered with cabinet and onto parliament and anything outside of that plan they have to come back (to SWF) , so they (SOEs) can keep what is required for that plan and no more.”

Former National Research Institute (NRI) director Dr Thomas Webster shared similar sentiments.

“We think that the disclosing of those funds will depend on the boards of those entities,” Dr Webster said.

“We think that in the current environment, the way the state entities are operating, they may not re-emit enough of those funds or to SWF. 

“We think that all funds come into the SWF as a trust fund, and through those trust funds, the funds can then can be transferred to those entities as per the Government’s and not for those boards of those state entities to determine how much of the money should come to SWF.”