Hard questions about the country’s economy were asked in parliament today.
The questions were directed to the Prime Minister by former treasurer and Kandep MP, Don Polye.
Included were questions about revenue from the proceeds of the shipments from the LNG project, the K9 billion commitment budget deficit, and whether the country has enough foreign reserves on the backdrop of significant capital outflow.
Over the weekend, Prime Minister Peter O&rsquO’Neill had challenged the former treasurer to air his grievances on the floor of parliament and this morning, he gave it to him.
He asked six questions regarding LNG revenue and what was happening to the proceeds from the shipments.
On debt and GDP liability, he asked whether the country was on track and whether we have enough foreign reserves, given the fact the country has significant capital outflow.
He also questioned the pegging and fixing of the kina to foreign currency. A fixed exchange rate, sometimes called a pegged exchange rate, is a type of exchange rate regime where a currency's value is fixed against the value of another single currency.
The negative aspect of pegging or fixing currencies is that if the dominant currency falls, the kina falls with it.
The Prime Minister, in response, said the former treasurer should know very well that proceeds of the LNG were not part of the 2014 budget. Proceeds will start to flow beginning next year.
He said the sovereign wealth fund was delayed for differences the former treasurer is aware of. He said he had no idea of a K9 billion commitment.
As for the deficit, the government has planned for it, meaning by 2017, a balanced budget should be on the spreadsheet.
He also said the capital outflow assumptions were far from the truth. Deputy opposition leader and Bulolo MP, Sam Basil, asked a supplementary on how many exports of LNG have been shipped so far.
Prime Minister Peter O&rsquO’Neill also confirmed no proceeds from the shipments have been paid to other stakeholders.
He urged Papua New Guineans to be grateful to developer Exxon Mobil for successfully delivering a world class project on behalf of the people of Papua New Guinea.
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