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PM Marape clarifies K1b loan from Australia
6:27 pm GMT+12, 27/11/2019, Papua New Guinea

The recurrent expenditure of PNG consumes more than 60 per cent of the national budget every year.
 
This was made clear when Prime Minister James Marape responded to questions raised by Opposition leader Belden Namah in Parliament on the K1 billion loan (US$300 million) obtained by the National Government from Australia. 
 
Namah described the loan as “cheap” and told Parliament that there had to be strings attached to the loan.
 
However, Marape responded that there was nothing secret and no strings attached to the loan. 
 
He told parliament the country of Australia was gracious in granting the softest loan as a long-standing partner of PNG.
 
“We have had a non-broken record of 44 years with Australia and goes back to when they were our colonial government, there is no secrecy behind the loan that was secured,” Marape said.
 
“As we took office on 30 May  our Treasury team did diagnostics and due diligence into the state of our economy on what we were facing as a nation; (and) one fact staring us in our faces (was) we inherited a lot of debts.
 
“Our debt profile was pushing past 40 per cent, and was breaking our Fiscal Responsibility Act. After taking stock, it dawned on us we inherited a huge and massive loan debt. We needed to clean them up and ensure our debts are not suffocating the economy.
 
“As it was going to be, if we had not taken corrective actions and interventions,” the PM said. “It is not secret, the transaction between two states- nothing is secret. In the manner it was an unprecedented loan, a huge funding has come not through the normal treasury system that gives us grant.
 
“For the first time we don’t want to continue receiving donor grants from you, we are a sovereign state.
“Revenue remains stagnant and yet demands and finances the development of our country including the huge burden of recurrent of expenditure where every year for the last 44 years our recurrent (expenditure) consumes well over 60 per cent of our budget.”
 
Namah, asked Prime Ministe Marape, during question time in Parliament to clarify if there are strings attached to the loan, adding that no country would give a 'soft loan' at very low-interest rates.
 
“No government could be so gullible, so as to believe and give a loan that would offer very low market rates and not expect anything in return and our people need to know what arrangements Prime Minister you have made and agreed with Australia in secret.
 
“This agreement and secrecy involve is a reversion to colonialism and handout mentality that this government says it is against,” said Namah.
 
Namah described it as a 'contradiction' that the Marape-Steven Government is trying to 'Take Back PNG' while getting loans as well.
 
Prime Minister Marape in response said, there is nothing secret about the loan, describing it as a 'better one for the country'.
 
“That One-billion-kina loan would be infused possibly anytime today or tomorrow as I speak.
 
“A straight transaction with no string attached to support, no fees for consultants or what’s so ever, straight into our Central Bank from the Federal Reserve Bank of Australia.
 
“A couple of things will take place, it will mitigate our cash-flow issues right away, you will have US$300 million for the market and transactions will take place,” said Marape.
 
Prime Minister Marape also thanked Australian Prime Minister Scott Morrison for the loan, adding that the Government was transparent about its figures hence the approval of the loan

SOURCE: POST COURIER/NBC PNG/PACNEWS


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