Treasurer Says K5.7 Billion Spent on Economic Recovery Plan
by PNG Business News - April 26, 2021
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Treasurer Ian Ling Stuckey told Parliament that K5.7 billion was spent as part of an economic recovery plan on "the economic battle."
He explained that the money was not solely spending on COVID-19 and that the government had invested K2.5 billion in COVID-19 bonds and K1.5 billion in friendly international assistance.
Mr Ling-Stuckey said K600 million had been set aside, and the government had “built another K600 million on COVID-19 in 2022” into its budget projections.
On COVID-19, he said, there were two wars: a health war and an economic war. Mr Ling-Stuckey claimed that the majority of the K5.7 billion was spent on the global war as a relief package rather than a COVID-19 health program.
The elements and results of the K5.7 billion economic stimulus program, he said, included:
- K2.5 billion COVID-19 bonds – Amid the vulnerable, once-in-a-generation challenge to capital markets, all of these bonds were successfully collected. There was a possibility that the COVID-19 economic impacts may have prevented these bond proposals, which were already included in the 2020 budget, from raising the necessary funds.
- K1.5 billion in friendly international assistance – met. The people of Marape have faith in the government. Budget funding collections totalled K4.4 billion in 2020. Thanks to COVID-19, some of the 2020 budget funds were no longer available, most notably the loss of nearly K1 billion expected for the ADB partial credit guarantee due to poor foreign market conditions. However, we were able to receive K1.26 billion from the IMF, K877 million from the ADB in a revised COVID-19 aid program, an expansion in our ADB health package to K528 million, the completion of SOE reforms for K351 million, and agreements with Australia for a new, low-cost, longer-term loan of K1.383 billion. K1b, a valued Japanese aid, was also present. This is a benefit of more flexible, straightforward, and accountable budgeting. This has aided in the repayment of previous high-cost debts, such as the Credit Suisse loan. More critically, it has backed up existing calls to boost healthcare spending and protect the economy from COVID-19-related shocks. This funding is used to finance the whole budget;
- K6 million credit line from BPNG, which was obtained by lowering the cash balance requirement – was surpassed, with BPNG signaling that much more was given. The declines in cash balance requirements totalled K643 million, according to BPNG.
- K500 million in cash flow for people who lose their work due to regulatory reforms that provide for early access to superannuation. Preliminary estimates indicate that withdrawals have risen by more than 20%, with more funding expected; –
- K5 million real budget spending – later increased to K6 million – preliminary findings show that K508 million was spent.
“In total, of the K5.2b, we exceeded the target by nearly K3b in friendly foreign support and K43m from the BPNG credit line – due to the renewed confidence in the PNG economy by our international partners.”
PNG Business News - May 10, 2021
BSP Group Forecasts Economic Growth This Year
In its first quarterly Pacific economic and market (PEM) perspectives for 2021, BSP Financial Group Ltd forecasted 3.5 per cent economic growth for PNG this year. The bank estimated that the global economy will rise at a rate of 6% in 2020, up from a predicted -3.3 per cent in 2020 when the world was struck by the Covid-19 pandemic. The resumption of Barrick Niugini Ltd operations at the Porgera gold mine, as well as PNG LNG's forecast to expand PNG's liquefied natural gas (LNG) industry, were credited by the Pem insight for the recovery of the PNG economy. The signing of the agreement between Barrick and the government was well-received by the business community, according to BSP Group CEO Robin Fleming. He said that the agreement had given companies much-needed interest in the mine production restarting operation, which would bring foreign exchange into the country and improve loan and domestic economic development. Though PNG's economy is projected to recover, Pacific island countries have been hit hard by the global tourism slump, despite the virus's low prevalence. The economies of these countries are forecast to grow at about 9% below pre-pandemic peaks. Owing to expanded fiscal investment on infrastructure, Vanuatu's economy is expected to grow to 3.2 per cent in 2021, up 12.4 per cent from 2020. Although the kina remained unchanged against the US dollar in the first quarter of 2021, the dollar strengthened against most other currencies as higher-than-anticipated economic and job growth raised inflationary fears and fueled optimism that the US Federal Reserve would tighten monetary policy sooner than expected. The country's total foreign reserves fell from US$2.7 billion (K9.39 billion) at the end of December 2020 to US$2.41 billion (K8.31 billion) on March 18, 2021. The drop in reserves was mostly due to external government debt servicing and Central Bank intervention in the foreign exchange sector to increase liquidity. BSP's results and targets for the year were outlined in the paper, with the key target being access to the Australian stock exchange. “If successful, we will have access to alternative source capital to fund future growth ambitions, deliver services to our customers and enhance existing shareholder liquidity,” Fleming said.
PNG Business News - August 16, 2021
Ling-Stuckey: K5.7B Economic Recovery, Health Funds Protect the Economy
The K5.7 billion economic recovery and health fund, according to Treasurer Ian Ling-Stuckey, was utilized to preserve the budget and the economy, with the overarching goal of protecting the people. He mentioned this in the Parliament chamber while debating the new normal perspex solution layout, a measure to limit the development of the Covid-19 epidemic, according to a report given by the permanent parliamentary committee on National Parliament. According to Ling-Stuckey, the government, like all other countries, has experienced several problems as a result of the COVID-19 epidemic, and they had to adjust their budget last year, resulting in a revised income of around K2.7 billion. He stated that because of the pandemic's severe problems, they expect to cut sales by another K2 billion this year. He stated that the public has many worries about how the K5.7 billion economic and health response monies are being spent. He stated that he would make a ministerial statement for the good of the country, but that the money would be used to preserve the budget and the economy in order to contribute to the discussion. “If we did not protect the budget then what would have happened?” he asked. “Yes we hear people complaining about the increased debt and it frustrates me. “If we did not respond quickly with the economic response package, then what would have happened? “We would have failed to pay K185 million fortnightly and we would have lay off nurses and doctors, which means less frontline workers and that would have resulted in more than the 18,000 infected cases to date and roughly to about 200 deaths. “These figures would have been far greater. “We would have reduced the number of policemen and the early lockdowns would have been chaotic and the order situation would have been far worse. “Mr Speaker, I will present a statement tomorrow (today) outlining where we were before the COVID- 19 when we look at some of these things at the very tough economic times and if you recall the forecasted GDP for this year to be three and a half per cent but that number was revised to two and a half per cent. “Given the difficult times, it gives you an idea to appreciate what this government had done and look at some key matrix and compare funding since the government came into power in May 2019, you can see that with capital funding in two and a half year, the previous government-funded about K10 billion. “At the end of May, our capital investment budget is expected to be around K18 billion. “That’s a clear K8 billion more compared to the previous government and we did this with revenue revised down to K2.7 billion. ‘‘It is my duty to protect the budget and revenue. The revenue is met but if we can’t find revenue internally, we have to find it elsewhere.” Reference: Elapa, Jefffrey. Post-Courier (12 August 2021). “K5.7B Economic Recovery, Health Funds Protect the Economy: Ling-Stuckey”.
PNG Business News - August 23, 2021
BPNG: Economic Activity Decreasing Due to COVID
Domestic economic activity decreased in 2020, according to economic data accessible to the Bank of PNG, despite a rebound in the December quarter. The drop, according to the Central Bank, was caused by the Coronavirus pandemic, which had a negative influence on the world economy, as well as the government's subsequent containment efforts following the declaration of a state of emergency and the closure of the Porgera mine. The downturn was fueled by reduced production and exports of most mineral and non-mineral commodities, as well as reductions in formal private sector sales. The Kina likewise lost value against all major currencies, causing the Trade Weighted Index to fall. As containment measures were lifted in the second part of the year, employment increased, indicating a recovery. With the pandemic's impact, headline inflation remained high. Sales grew across the board, with the exception of agriculture, forestry, and fishing, which saw a drop. Reference: The National (13 August 2021). “BPNG: Local economic activity declining”.
PNG Business News - January 17, 2022
Access to Quality Credit - Employers Benefit When Staff Benefit
Photo credit: Savi Moni Access to affordable credit is highly valued but not readily available in Papua New Guinea. In an extremely competitive employment marketplace, businesses are increasingly assisting employees to access credit as a means to both attract and retain their top talent. Even in the current economic downturn, there is still a ‘war on talent’ when it comes to PNG’s ‘best and brightest’. This is only set to intensify in 2022 with the Government having effectively given the ‘green light’ to both the PNG LNG expansion (i.e., P’nyang) and the reopening of the Porgera gold mine. Furthermore, despite the slow progression of the much anticipated Wafi-Golpu gold mining project, it will only be a matter of time before it too will require the skillsets of thousands of new employees. A recent Salary Finance survey of US workers found that access to affordable credit is one of the most desired benefits not currently being offered by employers. Human Resource professionals agree, that in combination with competitive salaries, providing staff with access to affordable credit is another way to reduce the likelihood of valued employees ‘jumping ship’. It also helps position a business as an ‘employer of choice’ when it comes to recruitment. Significantly, a key finding from PwC's 2021 Employee Financial Wellness Survey, found that, 72 percent of workers who reported facing increased financial setbacks during the pandemic said they would be more attracted to another company that cared more about financial well-being than their current employer. Savi Moni, an online personal loan service designed specifically for PNG’s corporate sector was launched in 2020. Founder and Director Nick Keane has heard firsthand from several business leaders the concerns they have of losing key staff, as well as the administrative and cost burdens of managing employee credit programs in-house. Having lived and worked in PNG for over 25 years, Keane understands the stress and hardship that a lack of access to affordable credit results in – especially when people resort to lending from unethical pay day street lenders (i.e., ‘loan sharks’). “I’ve seen far too many people – even highly-educated people in good jobs – end up in a cycle of debt that they can’t escape. Typically, these people find themselves with a mix of formal and informal (street lender) loans on high interest rates that they cannot afford. It is a really sad and really desperate situation for a lot of hard working and honest people.” Keane started Savi Moni so that he could help the corporate sector help its employees. “As someone with other business interests in PNG and someone who has managed large PNG workforces, I knew that internally managed employee credit programs are really time consuming, prone to creating workplace issues and not a good use of company capital. As such, we designed our lending product to be simple and streamlined so that there would be an absolutely minimal administrative burden for businesses. We also wanted to introduce the concept of ‘responsible lending’ to the market – that is, by carrying out in-depth assessments to ensure we don’t over lend to our customers. We want them to be able to comfortably manage their repayments, whilst having enough money for life’s essentials left in each pay packet.” Central to the Savi Moni product is the recognition that employee financial wellness is not a ‘warm and fuzzy’ or ‘feel good’ employee program. Financial wellness programs are now a ‘need-to-have’ employee benefit. As such, Savi Moni provides not only a range of free financial literacy tools, tips, resources and courses on its website, but it has partnered with Australian Business Volunteers (ABV) to deliver a PNG bespoke ‘Family Money Management’ two-day course for its loan partner companies. The training is delivered at cost. Solar Solutions, an early adopter of Savi Moni’s loan offering delivered ABV’s Family Money Management course to its Port Moresby staff. Savi Moni’s Pukari Peni, who attended the training session with them reported that “The feedback was great. All of the staff that participated said they greatly benefited from the training.” Port Moresby based Avenell Engineering Systems (AES), has been impressed with the flexibility of setting their own loan parameters. Knowing full well, the negative affects to their business of staff suffering from high levels of financial stress, AES wanted to implement their own lending rules. “Savi Moni really do have a ‘responsible lender approach’, with tight lending guidelines, yet we wanted to ensure even tighter rules for our staff. We set our own Debt to Income (DTI) Ratio and Savi Moni were able to implement this without a hassle.” AESHR Manager, Maria Jesusa Garcia. Savi Moni is a 100 percent online personal lending service with agents on the ground to assist if needed. It is delivered through a convenient and transparent digital platform that a business’ approved HR and Payroll staff log in to. In order for employees to benefit from a Savi Moni personal loan the employing business must first sign up as a Loan Partner, there is no risk for Loan Partners just benefits. Minimal time and effort are required from Loan Partner businesses and their employees to ensure a fast and simple employee credit program. Article courtesy of Savi Moni
PNG Business News - January 17, 2022
Geopacific Resources Appoints Andrew Bantock as Chairman
Photo credit: Geopacific Resources The Board of Geopacific Resources Limited is pleased to announce the appointment of Mr. Andrew Bantock as Chairman and director of Geopacific, and the retirement of Mr. Ian Clyne as Chairman and director of the Company. Mr. Bantock has significant experience leading listed and private businesses, both in Australia and offshore, with an acknowledged track record in corporate finance and commercial leadership. Throughout his career, Mr. Bantock has established a track record for successfully building and improving businesses’ operations and financial structures, developing and communicating their vision and strategy and building and leading high performing teams. Mr. Bantock will work with Geopacific’s Management, the Board and the Company’s consultants to assess the optimal operational model, development plan and funding requirements for the Woodlark Gold Project under the review announced to the market on 15 December 2021, as well as the long-term strategy for the Company. Geopacific Nomination and Remuneration Committee Chair, Mr. Ian Murray said: “Andrew brings a fresh perspective, relevant expertise and the ability to thoroughly assess the Company’s requirements and path forward. His proven leadership, financial and business improvement skills will be invaluable both for the Company’s short-term imperatives and the implementation of its long-term strategy. On behalf of the Board, I would like to thank Mr. Ian Clyne for his dedicated service as Chairman of Geopacific and the achievements during his tenure. We wish Ian all the best in his future endeavours. ” Mr. Bantock said: “It is an important time for Geopacific and I look forward to applying my experience and skills, with the support of the executive management and Board of Geopacific and its consultants, to assess, develop and implement the path forward for the Company. With A$50.9 million of unrestricted net cash reserves and no debt at 31 December 2021, the Company is positioned with a number of strategic options to grow shareholder value”. Background information regarding Mr. Bantock and key terms of appointment Mr. Bantock’s role will be as Non-Executive Chairman of Geopacific, however he has committed in the short-term to a greater involvement in the oversight of the review workstreams currently underway at the Company. Details of the material terms of the arrangements for the provision of Mr. Bantock’s services are set out in an appendix to this announcement. After qualifying as a Chartered Accountant with a leading global firm, working in Australia and the UK, Mr. Bantock commenced his commercial career with ASX/NZSE listed GRD Group, owner of New Zealand’s largest gold producer, Macraes Mining (later Oceana Gold), and well-known resource project design and construction engineer, GRD Minproc. Mr. Bantock later become Finance Director of GRD, also serving six years as a Non- Executive Director of Western Australia’s water utility, Water Corporation, where he chaired the Audit and Compliance Committee. Mr. Bantock subsequently helped to establish and co-lead an ASX listed exploration group, in various roles, including as founding Executive Chairman of Chalice Gold Mines Ltd and founding Managing Director of Liontown Resources Ltd, before being recruited back to a senior finance role, as CFO of Glencore’s Australian nickel business. Mr Bantock is currently a Senior Managing Director of FTI Consulting (FTI Consulting), an independent global business advisory firm where he leads the Perth Business Transformation practice and co-leads the national mining advisory practice, assisting clients to develop and implement business improvement and growth strategies, supported by detailed business case analysis, financing strategies and hands-on execution. Andrew is also Chairman of Elevate Uranium Limited (ASX: EL8). FTI Consulting is providing the services of Mr. Bantock as director and non-executive Chairman of Geopacific under a consultancy agreement. Separately, FTI Consulting has been engaged to assist the Company and work alongside the existing independent technical advisors appointed by the Company over the next three months (subject to any extension) to perform a detailed diagnostic review, make recommendations to the Board on the strategy for the Company and assist with the implementation of key action items, whether through the provision of advice or by providing senior management support and resources. This arrangement has been agreed on normal ‘arms length’ terms and includes appropriate conflict measures. Article courtesy of Geopacific Resources
PNG Business News - January 17, 2022
Panguna Mine Committee Conducts Successful Meeting
A positive first meeting of the Panguna Mine Legacy Impact Assessment Oversight Committee was held in Buka in 2021. Representatives from clan, landowner, and community organizations, as well as the Papua New Guinea government, Rio Tinto, Bougainville Copper Limited, and the Human Rights Law Centre, were hosted by the Autonomous Bougainville Government. The committee gathered to examine the next steps in analyzing the old Panguna mine's environmental and human rights implications. "This process is equally vital and necessary for all parties, the people of Bougainville, ABG and BCL," Geraldine Paul, representing the ABG, said in her opening remarks. She praised Rio Tinto and BCL for agreeing to collaborate with ABG and stated that "ABG has offered its full support for the Panguna Mine Impact Assessment to be carried out through the executive council." Furthermore, Hon. Geraldine Paul informed the committee that a political timeline for Bougainville's independence has been established, and that this process is timely in order to support the people of Bougainville's political ambitions. Rio Tinto’s representative on the Committee, General Manager for Closure Delivery, Mr. John Dumbill said, “Rio Tinto is sorry that we did not come forward earlier to understand the impacts from the mine. We are ready and willing to participate in this process with you. I hope that I can help to move this forward, and I am personally committed to making sure this process is fair and representative." The Honourable Theonila Roka Matbob of the ABG, who is also the spokesperson for the Panguna Complainants group and has recently won an international award for her efforts to seek justice for affected communities, thanked him for the apology and noted that Rio Tinto had been constructive in working through the complaint brought against them by communities through the Australian National Contact Point (AusNCP): “This meeting marks what we hope is the start of a new chapter for the communities impacted by the Panguna mine. Personally, it fills me with great hope to see all these stakeholders come together to discuss a way forward to find solutions to the huge problems our people are living with. We are looking forward to working with the Committee to ensure work on the ground can start as soon as possible," Hon. Theonila Matbob said. Following the meeting, the committee issued a statement through its Independent Chairman, Mr Martin Brash of the Tanorama Consulting Group, said “All parties at the meeting have committed to collaborating in a fair and effective process that helps address the concerns of affected communities. In this first meeting, the committee has established operating arrangements for the process and have also finalised and endorsed a procedure to go to market to find a professional firm to complete the technical impact assessment.” The committee also approved a motion from the ABG's Honorable Geraldine Paul to conduct the next meeting in Panguna in February of this year, when they will get a desktop report tracing available pertinent background information regarding the environment and population in Panguna. The committee and the impact assessment contractor, who will be nominated by the committee in April 2022, will benefit from this study. Reference: Autonomous Bougainville Government (12 January 2022). “Panguna Mine Legacy Impact Committee holds first meeting”