PNGFIA calls on Govt to seriously consider Potentials of Forest industry
The Executive Officer of the PNG Forest Industries Association, Mr Bob Tate, called on the Government to seriously consider the potential, available economic benefits to PNG from a quick return to pre-crisis levels of operations in the forest industry.
“This year has been a disaster for the industry in PNG”, Mr Tate said, “starting with the reckless doubling of export taxes imposed in the 2020 Budget and followed by the restrictions imposed during the course of the state of emergency. These restrictions were imposed by the PNG Forest Authority and included an attempt to end all exporting activities and when this was overturned, an attempt to end all production including that in all processing factories in the country. Both of these measures were unnecessary and demonstrate the complete lack of understanding in the PNGFA of the disastrous economic outlook facing the country”.
“For the four months so far this year, we have seen a fall in production of some 30% compared to the same period last year and of extreme concern, over four thousand people have lost their jobs. It is these job losses that have and continue to have a devastating impact in rural areas, as localized economic activity, markets and transportation in particular, have been wiped out. This further adds to the distress being suffered in rural communities during this crisis”.
Both the Asian Development Bank, ADB, and the International Monetary Fund, IMF, have cautioned the Government of the critical need to maintain and increase PNG’s export earnings and foreign investment. The forest industry brings to PNG over K1 billion per year in foreign exchange and this comes into PNG; unlike other sectors of the economy where foreign exchange largely remains off shore.
In planning for the “post virus” recovery, Mr Tate called on the responsible Government agencies, Treasury, Finance and PNGFA, to immediately consider and implement actions that will restore livelihoods, employment and economic activity in rural areas. These actions should include the complete removal of export tax for at least the next 24 months. That would boost production and put back to work the industry’s now idle productive capacity and labour force. In addition we need to further streamline and remove unnecessary red tape that holds up export operations, this is critical if we are to re-establish our, PNG’s, presence and reputation as a reliable supplier in our overseas export markets.
If it is the Government’s intention to move away from log exports they should conduct this in a responsible manner and give investors ample opportunity to either move into domestic processing if its viable or shut their operations with ample lead time rather than simply increasing export tax and wiping the industry out.