Leader of the National Alliance Party and Treasury Minister, Patrick Pruaitch, has revealed shocking details highlighting the economic mismanagement of the country by the current PNC – led coalition government.
National Alliance is a coalition partner in the O’Neill-Dion government.
Speaking at a National Alliance Party event in Port Moresby, Pruaitch highlighted how the current government’s economic strategy has resulted in massive debt, a plunging GDP and growth rate, and a debt-to-GDP ratio myth.
Pruaitch, who is the Parliamentary Party Leader, spoke to members, intending candidates, Members of Parliament, Party executives, including former NA leader Grand Chief Sir Michael Somare.
The Minister highlighted that the economy grew by 25 per cent between 2014 and 2015 due to the PNG LNG Project establishment in the country and attributed this growth to the NA-led coalition under Sir Michael between 2002 to 2011.
Minister Pruiatch said looking back, it is clear that management of the PNG economy was at its best during NA’s two terms and began highlighting the country’s economic growth, which he says has severely eroded.
“Last year – in 2016 – PNG’s per capita income fell for the first time in 13 years. It is expected to fall again this year and to keep falling. I repeat keep falling at least for another four years.
“For a macroeconomic record as bad as this we will have to go back to the days of the previous PNC-led Government. People had lost all hope for an economic recovery and the PNC legacy was that PNG was often described as “a failed state”.
“After the economic boost induced by the LNG project that was negotiated and commissioned by a National Alliance Government, it seems like the economy has virtually fallen off a cliff under the present Government.
“After the near record 13.3% growth in 2014 and 11.8% in 2015, GDP growth plunged to 2% last year – significantly lower than the population growth rate of over 3% annually. How bad is that? Pruaitch said.
He added the mismanagement of the economy has resulted in a K13 billion borrowing which has taken total debt this year to K21.6 billion.
The Minister said despite its spending spree, formal sector jobs have also been falling since 2014 and by June last year these jobs had fallen by 5.7 percentage points below the peak in 2014.
He said this is one reason the anticipated growth rates of 18.9nper cent and 25.5 per cent in 2014 and 2015 never eventuated.
He also added it was a myth that the Debt to GDP ratios have been maintained below the 30% figure set by the previous Fiscal Responsibility Act
“The current Government’s policy mix, and its insatiable appetite for debt, meant these forecast rates would not be achieved even though PNG LNG performed well beyond all expectations. Admittedly, the projected 2015 growth was also adversely impacted by the unexpected fall in oil and gas prices in December 2014.
“Our current Government had been proudly boasting in its speeches that PNG was going to have the highest growth rate in the world. It failed to correct itself when this did not eventuate.
“All Papua New Guineans would be better off today if the current Government had given more consideration to the quality of its spending than in promoting extravagant projects built at highly inflated costs!” Pruaitch said.
The NA Party is meeting in Port Moresby with members and intending candidates from the four regions.
NA will finalise by today its final list of candidates contesting the 2017 elections.