He says the country is within debt limits and that it does not have extraordinary levels of foreign debt.
The PNG economy was stable, had better growth than most countries, a stable exchange rate and better foreign exchange reserves than many countries, he claimed.
Mr O’Neill said the government was “not silly’’ and had kept most of its foreign loans on concessional rates.
He has provided an overview of current economic development as countries around the world “realign expectations’’ in the face of the downturn in global commodity prices.
PM O’Neill said critics with vested interests had latched onto a recent mid-year outlook that made projections of potential scenarios that would only eventuate if the Government did not attend to global economic challenges.
“The facts are that the recent publication by the Bank of PNG indicates that the economy is stable and we are confronting global challenges,” Mr O’Neill said.
“Inflation is at around 4 per cent. Our foreign exchange reserves have around nine months of cover. That is higher than many parts of the world where import cover is only around 3 months.
“Our exchange rates are stable. Importantly our economy continues to expand at a rate that is the envy of many countries around the world.
“We have a growth rate over 10 per cent currently that will expand to between 11 and 15 per cent by the end of the year.
“Despite misinformation and alarmist claims by people with vested interests, our debt to GDP is also very stable and within the legislated cap.
“Today our debt to GDP ratio runs at around 33 per cent of GDP so is below the Financial Responsibilities Act requirement of 35 per cent.
“Today our budget deficit to GDP ratio for the half year to June is 1.8 per cent, and we project 4.4 percent for the whole year.
“This is very different to the figure by some observers who sought to publish the projection as though it was a pre-determined fact.
“The only reason our borrowings would expand is because our GDP is expanding. When our GDP grows it gives us the opportunity to borrow more because we have the ability to repay it.
“Papua New Guinea Government’s debt level stands at around fifteen billion kina.
“Only around thirty percent of that debt is from foreign loans and these are mainly concessional loans, with not many commercial loans.
“Around sixty per cent of debt is domestic unlike so many countries around the world that are terribly exposed.
“The further ten percent are mainly commercial loans (from) local banks in PNG.
“We are not silly taking on high interest rate loans, we are borrowing at concessional rates and borrowing domestically.
“There is enough liquidity in the system for us to borrow domestically.
“It is also important to note that Papua New Guinea has never defaulted on a loan and we will continue to maintain that policy as a priority.”
The Prime Minister said there is no doubt that the economy is being affected by the decline in commodity prices and that is happening to countries all around the world.
“In the face of global challenges Papua New Guinea is in a strong position because we do not have foreign debt like many countries around the world.
“We are attending to both sides of the coin, cutting non-priority expenditure on one side and increasing revenue on the other.
“We have a calculated and systematic approach to managing the economy.
“Cuts will be made to non-priority areas where projects can be deferred to next year and the following year.
“But there will be no cuts to key priority areas that affect thousands and thousands of families and individuals. Health, education, law and order and infrastructure are too important and there will be no cuts in these priority areas.
“We are reviewing all ongoing Government expenditure and identifying waste.
“Every position and employee in every department is being checked to make sure that there are no ghost names that are being paid.
“We also want to know that all people who are on the payroll are turning up to work.
“Through reviewing and improving processes in the public service we believe we can make a saving of potentially three hundred million Kina.
“Parliament will meet in October and will look at priorities for readjusting the budget so that we can cater for cuts through an appropriation Bill, and we will plan for 2016.
“Together we are managing the expenditure and we are attacking the revenue side making sure that people and businesses who owe the Government will pay that money.
“Hundreds of millions of Kina are owed to the Government in outstanding taxes.
“We are now going after those taxes so that this money comes back to fund Government services.
“We are further seeking the dividends from State Owned Enterprises that are owed to the Government but are yet to be submitted to consolidated revenue.”
Prime Minister O’Neill said it is important for people to properly check where the claims of doom and gloom are coming from as there are serious conflicts of interest.
“One the leading critics is a former Australian staff member of the Treasury who was asked to leave Papua New Guinea, who also has connections to the current Opposition.
“The other is a journalist who is the son of the former chairman of the PNG Sustainable Development Program who we asked to leave as well.
“So you can see the conflict of interest in this criticism. Reporters need to seriously verify the claims these people are uploading to the Internet.”