K1.5bn Estimated Loss To State
State-Owned entities and businesses in Papua New Guinea stand to lose close to K1.5 billion in revenue by the end of 2020 should the state-of-emergency persist.
These are the predictions of a recent analysis report on market conditions during the state of emergency completed by BCPNG and Price Waterhouse Coopers yesterday.
Executive director Douveri Henao, speaking at a press conference to announce the report, said the survey conducted in April and results collected from 900 businesses in 20 different sectors have revealed that April 2020 was an appalling month for businesses in PNG.
He added that only 66 per cent of businesses have reported that they can only operate in the current environment from the April period with restrictions, 75 per cent expect revenue to decline and 70 per cent expect to make a profit.
He explained that this was for the SoE periods of April and May and the situation will change if the SoE continues.
“We are proposing staff regulation as opposed to policing restrictions that we’ve seen that is quite prevalent in the April and May SoE periods where police were actively going out and shrinking the market to function on social distancing and others.
“Four other suggestions on compliance that we are suggesting to government include self regulation as a way forward,” he said.
Mr Henao said there is still strong dialogue with the Treasurer and they are confident that when they present the reports there is going to be some real connection.
“We need to get compliance and restrictions correct and the opportunity is presenting itself this week in the public health bill that is being proposed and discussed in government,” he said.
“We are telling government if you can move into a compliance ecosystem we are going to look at recovery if not this is the number we are going to end up within December,” he said.
Meanwhile, Treasurer Ian Ling-Stuckey in his Covid-19 economic update last week, said latest estimates indicate that the GDP growth rate is expected to fall by 3.7 percentage points, down from the 2 per cent growth forecast at the time of 2020 Budget down to minus 1.7 per cent currently.
“This fall in growth will lead to an estimated fall in revenues of K2,222 million, up from the K2,000 million estimate provided two months ago. This loss of revenues means our budget deficit will increase by the same amount – so from K4, 631 million to K6, 853 million,” he said.