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Businesses Concerned Regarding Government Debts

by PNG Business News - April 08, 2021

With the outstanding amount of government debt owed to the sector, pending landowner fees, and rising law and order woes, businesses are concerned about 2022.

According to Chey Scovell, chief executive officer of the PNG Manufacturers Board, conversations within the business community revealed that the government owed companies more than K2 billion.

“I don’t have an updated list, but from general conversations with business and what is being raised with the various chambers, it would exceed K2 billion,” he said. “We hear that contractors for the Department of Works have claims for this amount alone, so the number could be as high as K3 billion. No doubt they may have paid some, technically a K1 payment would be paying at least some. The Budget hasn’t been able to be implemented properly at all. Recurrent expenditure, monthly bills for things like water, power, security, rent, are not being paid in full or in many cases at all. We’ve suggested that the Government put up an online portal/list, for all creditors to register for the Government to show full or progressive payments.”

Scovell compared what the government was doing to the private community to what would happen if everybody started paying taxes for one to five years but continued to use government programs.

“They wouldn’t be able to survive, so how is it that they expect businesses to carry on?” he said. “It is also a bit of a cop-out that Treasury is taking a long time and in many instances taking extensive reviews of claims to see if they will pay them and by how much.”

Scovell argued that the government was required to behave in good faith and to set a precedent, but that forcing or intimidating companies to make substantial reductions in compensation due for goods and services rendered was bad form.

“We note there are many dodgy claims, but there seems to be little evidence that hires car firms, public works contractors and catering firms (reported as problematic areas) are having the same scrutiny,” he said. “BOC Gas waited years to be paid for medical gases such as oxygen supplied to PMGH (Port Moresby General Hospital), it was reviewed twice that I know of and not paid. The other item of note is that debt carried is a growing debt. The older it gets the more it has cost the businesses.”

He added, “Also, our currency has been depreciating, many businesses based their fees on the foreign exchange rates at that time, some even had loans Just like our tax penalties, the longer they are overdue, the higher they should become. This Government isn’t doing to others as it does for itself. We still have micro, small and medium enterprises that have suffered duress due to non-payment of bills going all the way back to our 40th Independence, same goes for the 2015 Pacific Games, we hear from the regional chambers that there are many outstanding claims for the past two elections. Again, if we had a publicly available list, the Government wouldn’t be able to hide behind confusion and people could whistleblow on dubious claims.”



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