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April 21, 2021
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PM says Polye is “Simply Wrong”

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By Sasha Pei-Silovo – EM TV Online

 

Prime Minister of Papua New Guinea, Peter O’Neill, has raised concerns over recent statements made by Opposition Leader, Don Polye regarding the nation’s economy.

Through a media release this afternoon, PM O’Neill expressed his discontent over “ongoing attempts to undermine the economy, harm business and destroy jobs by an Opposition with a vested interest in failure.”

PM O’Neill says that there needs to be a responsible Opposition in the New Year, to challenge government policies with facts; and to initiate “mature discussions.”

Polye has maintained that 2015 will bring trying times to Papua New Guinea; predicting drastic cuts to sectors such as health and education, and contractual works being carried out, citing the 2015 Pacific Games facilities as one such area.

The Opposition Leader is adamant that the government should revise the national budget and “stop the wastage of funds.”

“There is no cash in the public accounts to fund these projects, pay for teachersleave fares. These are challenges facing the country and the government must be truthful about the state of the economy,” stated Polye.

However, Prime Minister O’Neill has responded, describing Polye’s claims relating to the budget as “simply wrong.”

“The Opposition Leader has nothing new to say and keeps repeating the same baseless claims time-after-time. His attempts to talk down the economy over the fall in oil prices is an example of irresponsible behaviour that can affect jobs and business if people were to believe him.”

The PM has said that with the improvement of the country’s global reputation and national pride, there are those who sought to discredit Papua New Guinea’s economy; citing political gain as being the motivation behind the backlashing of the government’s decisions, relating to the budget and the economy, as a whole.

The Prime Minister says that despite what Polye has communicated to the country, through his recent statements, LNG customers, which constitute highly reputable and large, international corporations, will stand by their contracts with long-term outlooks.

“These companies lock in long-term forward contracts in order to protect themselves from future price increases – in doing so they carry the risk that energy prices will drop. This is part of the global energy business and Mr Polye either does not understand this or is playing games with Papua New Guinea’s economy.

“When we prepare an annual budget this is prepared based on a long-term average of commodity prices as the basis for the assumptions in the budget forecast.”

He remains confident that commodity prices will improve and that the country will meet global demands for LNG production. PM O’Neill is satisfied with fixed contracts for the LNG project, where surplus LNG is to be sold at spot prices, come 2015.

For energy producing nations, this is “smart business”, the PM says.

“When the LNG project came online ahead of schedule this year, only the additional gas was sold at spot prices as this could not be factored into earlier contracts. These additional gas sales are a bonus in revenue for the nation.

“While the price of oil has dropped, for the most part this will not overly affect LNG revenues as we have forward contracts in place that are set at a fixed formula.  These are 20-year contracts predominantly with customers in China and Japan.”

Prime Minister, O’Neill pointed out that Polye’s statements on the sales of Liquefied Natural Gas were misleading. He alleges that Polye actions were either deliberate to delude the market, or that the Opposition Leader was “confused.”

“All commodity prices fluctuate depending on supply and demand.  Currently there is an increase in supply of oil in the market as OPEC countries are not cutting back on production.  As such there is an increase in supply against demand and consequently prices have dropped.

“This really is something that a former Chairman of the IMF and World Bank Board, even though only in the job for just a few months, would have understood if they had focused on the briefings provided to him.”

Previously in October, PM O’Neill, while responding to Polye again, said that all indicators, including inflation and interest rates, remain within the projections of the budget and, further to this, revenue collection is well above target, while expenditure is within the limits set in the budget.

In his Christmas address, PM O’Neill said that the eight per cent economic growth stood as a reminder for the country to remain focused. He stated that the steady inflation and interest rates, and the high foreign reserves levels would cater to for six months of imports. 

However, Polye has said that all these are not enough for the economy.

The office of the Prime Minister has also refuted claims made by Polye over the PM’s Vote being more than one billion Kina.

“Claims by Mr Polye that the Prime Minister’s Office has a vote of more than one billion Kina is an absolute lie. No such fund exists and he should stop misleading the people of Papua New Guinea with untruths.

“This is a disgrace for someone who is now in the position of Leader of the Opposition.”

 

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