Billion Kina shortfall, Non-payment of dividends the issue: PNG Finance Minister Abel
30 June, 2019, 11:25 pm
PORT MORESBY, 30 JUNE 2019 (POST COURIER) – Papua New Guinea Finance Minister Charles Abel has revealed that there is a K2 billion (US$591 million) gap in revenue collection that is now impacting the Government’s obligation to meet the 2019 Budget.
Abel said this after a series of questions relating to natural disaster funding commitments that were not honoured by the government.
The questions came from East New Britain Governor Nakikus Konga, Central Province Governor Robert Agarobe and Oro Governor Garry Juffa.
Governor Konga said heavy rains caused flash flooding in February this year in East New Britain and a submission of K97 million (US$28.6 million) that was approved by the Provincial Executive Council was submitted to the national government requesting K17.8 million (US$5.2 million) for first phase of restoration works.
He said a K5 million (US$1.4 million) cheque was received last month but unfortunately the cheque was dishonoured by Bank South Pacific.
“Today we are still waiting for the money to fix our roads. In the meantime, all our roads are riddled with potholes, erosions and one more heavy rain will bring the province to a halt,” Konga said.
Governor Agarobe also said the Central Province was hit by heavy rains and flooding and the province was declared a disaster area and the provincial government put in K1 million (US$295,000) for relief and submitted a report which was presented to Parliament by former Inter Government Relations Minister Kevin Isifu.
He said K3 million (US$886,000) was promised but nothing came through to date.
Oro Governor Juffa asked for the balance of a K5 million (US$1.4 million) commitment after he only received K2 million (US$591,000) for the cyclone Guba disaster in 2012.
Abel said the funding and budgetary issues which have been raised by the new Treasury Minister in the state-of-the economy are real.
“When you have appropriations in the budget, when you have natural disasters even if they are insufficient, for example, we have K20 million (U$5.9 million) in the current budget for national disasters, the Governor’s (ENB) request is for K17.8 million (US$5.2 million) that immediately will consume that whole appropriation.
“The fact that the appropriation is there is another issue. We have to highlight that there is some K2 billion in terms of the first six months of this year of the funding gap in the budget,” Minister Abel said.
He said a billion kina in financing component to support the budget is about to be delivered but the dividend payments are not coming through.
“The primary shortfalls are coming not from taxation, it is the dividend-related side.
There are significant revenues going to structures like the Kumul structure for petroleum in particular that have not handed over those dividends.
You need the revenue coming in to fulfill the expenditure commitments, that off course does not help the Governors at this point in time,” he said.
But Abel said he will look into their concerns and address those once funds started flowing into the government coffers.