Treasurer Ian Ling-Stuckey says the current actions of PUMA have highlighted the need for a holistic solution covering three key issues.
“First is to assess the specific issues of whether PUMA has breached our country’s banking and taxation requirements.
Ling-Stuckey said, “We are checking the facts in our discussions with PUMA and Government agencies.”
The treasurer also highlighted the need to address failings in the fuel market, including the appropriateness of some long-term contracts going back to the InterOil days adding that the Prime Minister has announced actions underway on this.
He said the country must also continue to address the broader foreign exchange issues that have been damaging PNG’s growth performance since 2015.
“Businesses have been complaining foreign exchange shortages as a major issue, and we have been listening”.
Ling-Stuckey also highlighted his recent meeting with the Acting Governor for Bank of PNG, Elizabeth Genia.
“During these discussions, I was extremely pleased that the BPNG team indicated their intention to lift the release of foreign exchange to the market from US Dollars (USD) 60 million per month up to USD100 million (Kina 350 million) per month for all of 2023 – USD1,200 million flowing to the market.
“This level of support is more than three times greater the USD30 million per month being released in 2019, and an increase of 66% on the USD60 million being released in 2022.
“This increase of USD40 million per month should assist substantially with foreign exchange shortages. This higher level of foreign exchange release has already commenced.
“The meeting also discussed the importance of fixing issues with bouncing Government cheques and payment issues, the forthcoming Anti-Money Laundering and Counter-Terrorist Financing Review, collaboration with the Independent Advisory Group with its 2nd phase review of the Central Banking Act.
He admitted that there is a need for an independent central bank which has been at the centerpiece of steps to modernize the central bank.
“This is separate from the need for good communications between the Treasury and BPNG to ensure the effective coordination of monetary and fiscal policies.
The increase in foreign exchange releases to USD100 million per month is a very important step in moving back towards full Kina convertibility”, he stated.