PORT MORESBY, 03 APRIL 2017 (POST COURIER) — The political marriage of Papua New Guinea biggest partners in the coalition government People’s National Congress and National Alliance is as good as over.
Battle lines were drawn on the eve of the National Election after National Alliance Party Leader Patrick Pruaitch dropped a bomb shell, blaming Prime Minister Peter O’Neill’s PNC Party for mismanaging the economy in the past five years.
Pruaitch made the statement at the NA Party Induction attended by more than 70 NA candidates for the 2017 National Election in Port Moresby last Friday. Grand Chief Sir Michael Somare was also present.
He revealed details highlighting the economic mismanagement by the current PNC-led coalition which has resulted in massive debt, a plunging GDP and growth rate and a debt to GDP ratio myth.
Pruaitch said that last year, the per capita income fell for the first time in 13 years and is expected to fall again this year and keep falling for at least another four years. He said after the economic boost induced by the LNG project that was negotiated and commissioned by the National Alliance Government, it seems like the economy has virtually fallen off the cliff under the current Government.
“After the near record 13.3 per cent growth in 2014 and 11.8 per cent in 2015, GDP growth rate has plunged to 2 per cent last year – significantly lower than the population growth rate of over 3 per cent annually.
“Many of you are not aware that jobs in the formal sector have dropped significantly since 2014 to their lowest level in about five years according to Central Bank statistics. This has happened in spite of a significant increase in employment in the mining and petroleum sectors.”
He said in just two years – 2014 and 2015 – the economy had grown by a spectacular 25 per cent but that growth is not because of any initiative by the current Government.
“Mismanagement of our economy is one reason why the originally anticipated growth rates of 18.9 and 25.5 per cent in 2014 and 2015 never eventuated.
“The O’Neill Government borrowing in 2014, which I tried hard as Treasurer to minimise, was equivalent to more than one third of total Government expenditure in 2011. In 2010 the last full year of NA led Government, total Government revenue stood at K6.87 billion (US$2.09 billion) as against K11.84 billion (US$3.60 billion) in 2014. Still the Government has to borrow an additional K3.5 billion (US$1.06 billion) in 2014 to fund the Budget deficit.”
“The Government has borrowed K13 billion (US$3.9 billion) to take the total debt this year to K21.6 billion (US$6.57 billion). Despite its spending spree, formal sector jobs have been falling since 2014. By June last year these jobs has fallen by 5.7 percentage points below the peak in 2014.”
“Everyone knows it is a myth that Debt to GDP ratios has been maintained below the 30 per cent figure set by the previous NA Government’s Fiscal Responsibility Act,” he said
Meanwhile, Finance Minister James Marape has hit back at coalition partner National Alliance Party leader and Treasury Minister Patrick Pruaitch’s outburst on the state of the economy under the PNC-led Government.
“Patrick Pruaitch must take responsibility as Treasurer and the chief economic minister of the O’Neill Government who presided over the economy over the last few years and not shy away for political convenience. And the timing of his outburst cannot be more political than it is now as we confront 2017 National Elections,” Marape said in response to the public statement on the economy last Friday.
“While he is exercising his independence of mind, it now affirms in our mind why the country’s treasurer remained silent on matters about economic policies confronting our nation. We now know he had a political motive to his lackluster performance as Treasurer. He has never on one instance offered constructive policy options to improve the economy in the three years he has been Treasurer in this government.
“The O’Neill Government is a consultative government and he was placed in the highest echelons to offer alternatives if he ever had any yet he chose to remain passive only to come out on the eve of election with this huge campaign statement.”
Marape said the National Alliance Party could retrospectively claim resuscitating the economy in 2002 to 2007 and the massive gains of surplus in 2008 to 2010 exacerbated by the extraordinary prices of commodity in that corresponding period.
“But least we forget under that period a massive K8 billion of surplus in budget were squandered in a centralised government manner when he equally presided as the Treasurer then.
“The question remains what infrastructural asset, what national legacy he left behind then. History then is littered with a surplus budget with no tangible development for our country and years on when he was recalled to Treasury, it baffles my mind that he has the audacity to attach his own work, admittance that he was wasting our national time in that office,” he said …PACNEWSPNG -[/restrict]