Basil Speaks: Opposition Considers UBS Loan Illegal

Deputy Opposition leader, Sam Basil, today told a packed gathering of accountants that the opposition still considers the UBS loan illegal.

 

Speaking at the Certified Practicing Accountants annual meeting in Lae, he said Papua New Guinea may see an economic meltdown as the government pays back the UBS loan and other borrowings.

 

He has also argued that the decisions are impacting on the lives of ordinary Papua New Guineans.

 

The UBS loan was a hot discussion topic five months ago. The debates raged from household to parliament to social networks.

 

This morning, deputy opposition leader Sam Basil brought up the issue, making it known again that the opposition still maintains that the loan is illegal.

 

Sam Basil has been vocal about the impacts of the loan, including the Exim Bank of China loan and others.

 

This morning, he argued that the transition from four consecutive years of budget deficits to a modest surplus in 2018 can only happen if the government doesn’t borrow outside of budget perimeters.

 

In the 2014 budget, the government introduced a multiyear financing arrangement with much of the projected revenue coming from the earnings of the LNG project in the Hela and Southern Highlands provinces.

 

Speaking to dozens of accounting and finance professionals, many of them in the government treasury system, the deputy opposition leader said PNG will not see the revenue as expected.

 

The Acting Finance Secretary, meanwhile, chose the expected response. He stood by the government’s decision, saying the loans were put into projects that would also generate revenue.

 

As the man in charge of the country’s finances, he maintains cash flow isn’t a problem for the government.

 

For many, this debate is not for the ill-informed. The opposition expects the country’s debt to spiral out of control by 2018, forcing many Papua New Guineans into poverty.

 

They also expect a less-than-stellar performance of the economy as the deficits continue. The government on the other hand, with the prime minister leading the charge, thinks otherwise.

 

They say increased spending, particularly borrowing from overseas lenders, is necessary if development has to happen. The prime minister has maintained on various occasions that what they’ve done is within PNG’s budgetary framework and PNG’still has the repayment ability.

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