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PM O’Neill Outlines Government’s Strategy to deal with Global Commodity Price Pressures

Prime Minister of Papua New Guinea, Hon. Peter O’Neill speaking at the National Press Club of Australia.

The Prime Minister Peter O’Neill has highlighted the global economic challenges facing commodity exporting countries, and outlined how Papua New Guinea was confronting these pressures.

The Prime Minister said one of the most important matters in dealing with these issues was for the Government to be direct with citizens and the business community and outline the Government’s strategy.

“Like any emerging economy, we are faced with global challenges particularly from the lower commodity prices,” PM O’Neill said while speaking at the National Press Club of Australia.

“I do not want to sugarcoat the pressures that we are facing. We have an open dialogue so that we can understand how best we can confront these challenges,” Prime Minister O’Neill said.

While the price of commodities has risen in recent weeks, with oil now back over US$38 per barrel, the Prime Minister gave an overview of the impact of low commodity prices.

He said the serious decline in world prices for our oil and gas, and our minerals over the past 12 to 18 months has had a serious impact on our economy.

He also stated that he is certain that the Australian economy faces similar challenges.

“In Papua New Guinea, just a couple of years ago, royalties and taxes from the resource sector totalled close to two billion Kina. Last year it amounted to just 260 million Kina. Barely one eighth of the previous year’s revenues, and we expect the same in 2016,” he further explained.

Prime Minister Peter O’Neill said, to effectively manage these global pressures, the Government has revised budget estimates downwards and the country must live within the new normal.

He made the point that Papua New Guinea’s economic fundamentals are sound and we are deliberately running a deficit budget because we are committed to the promises we have made to our people.

“Our debt level is manageable, about 35 per cent of our GDP and our government had to make tough decisions, while making sure that Government itself is held responsible for those decisions.”

Prime Minister O’Neill said spending cuts have been done in a careful way that does that ensures the delivery of basic services.


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