Govt Responsible Despite Debt To GDP Ratio Increase, PM
Prime Minister James Marape has assured the business community that his government is a responsible one that increased the nation’s debt-to-GDP ratio from 35 per cent to more than 40 per cent of GDP.
He said this during Wednesday’s Prime Minister’s breakfast event hosted by the Port Moresby Chamber of Commerce and Industry. In reaction to comments raised by those in political circle claiming irresponsibility on the part of the Marape-Steven government in increasing the government ceiling of debt accumulation allowable by law through amendments of the Fiscal Responsibilities Act, the PM added the move including bringing on debts that were previously kept out of the books.
“Some of you have seen that our debt has suddenly increased by some billions and that is not to say that someone was hiding numbers before. “The previous regime that I was very much a part of treated the government accounts differently with some of our debts that were put off government records.
“For this time we have decided to bring IMF and World Bank onboard and every other international agency we need to ensure that they work with us to ensure the credibility of our numbers is sounded out by everyone. And we decided to bring few of our SOE debts that have matured which State is repaying, we have decided to include IMF’s benchmarking,” Mr Marape said.
He said expenditure did increase and almost did increase by over a billion, with those other debts carried outside the main government books. “We brought them back into one single treatment that increased the deficit space.
“We are being honest about it and our debt to GDP went past 39 per cent and so some of you have noticed that parliament last week, whilst introducing the supplementary budget, we amended the fiscal responsibilities Act to give ourselves and also indicated those interested in our economy, but more importantly, those few multilaterals as well as our donor partners who are continually supporting our budget process a view that we are working within confines of law.”
He also confirmed the Australian Government has been positive in its indications it will support the country in terms of the budget. “So we have kind of secured the confidence of those partners that were on the table with us in helping us run the economy but domestically on the domestic front we will be responsible, whist we have shifted the debt to GDP benchmark to 45 per cent.
“There is a Sunset Clause that in every five year intervals we will come back to 40 per cent by 2025 and come back to 35 by 2030,” he added.