I am just bringing this topic for your comments and suggestions on where we are headed as a nation over the next four years.The country is currently having problems that would seem practically insurmountable.
The current resources that we have are dwindling at a very rapid rate. OK Tedi mining is literally working to a standstill,Bougainville copper has been out of operation for years,many major bussiness houses are shutting their doors.We have incurred huge amounts of debts gradually over the years which today represents almost 75% of our GDP.The law and order situation in the country has grown to a stage that it has anhilated any investor confidence.As a result bussinesses are closing shop and even more are threatening to do likewise in the near future.
But I am an optimist and I beleive that we can climb out of this mess.The question now for us to discuss is what do we have to do.What kind of economic decisions do we have to make? Are we going to make any sacrifices at all in order to get out of this mess.And if we are what would they be and I guess the bigger question is weather we are economically strong enough to pull through?
I appeal to you as the "cream of the nation" of PNG,as intellectuals and future leaders to put forward your thoughts.I am not really well versed in these matters and I am only hoping that I have said enough to stimulate your interest and your subsequent thoughts.I look forward with anticipation to your respective postings where I am confident that we all can learn something from each other.
August 11 2002, 7:47 PM
It is indeed a very big question mark here as to where PNG is heading given the current economic situation. But I am very optimistic that we can pull through. This will depend on some tough decisions and stringent measures that must be under taken by the current government. I think one area that needs to be seriously addressed is the government spending. In the years gone by, massive government spending has literally resulted in huge deficits, and offices or departments literally running into funding problems. This happens because of poor budgetary planning and implementation and on a more worrying note, improper or unnecessary budget allocations. Economically, there is alot of what we can call 'waste spending' of which the previous governments seem to have been enjoying. What the government needs to do now is to seriously look at implementing cost cutting strategies at all levels. Although the government has to maintain public offices, it must also think of reducing the size and 'pecks and previleges'. It can be agreed that some of these pecks and previleges cannot be justified and the smaller the size of the workforce the more effective it delivers goods and services. Ministers and public office holders enjoy massive 'pecks and previleges' from public money. This is absolute waste of money which could be put into some other good use, and the other sense of it is that it seems unfair to everyone else. I think for PNG to survive, the government will have to literally undertake some of these decisions. It must reduce the public workforce, strip off 'pecks and previleges' of public office holders and ministers and peel off the district slush funds entitle to by ministers. Furthermore, proper accounting has to upheld in obtaining and using public funds because it has been realised in the past that huge portions of public funds have simply disappeared without proper acountability and the worrying thing is that these things seem to pass unnoticed.
This concept of cost cutting is very obvious and indeed it would seem feasible, but the question now would be is the current government able to make some of these tough decisions.
I hope so.
August 12 2002, 11:13 AM
thanks for your thoughts,it is encouraging to see that we are on a common ground with regards to the above referred matter.I believe that in itself is a very significant way to go about bringing our beloved country back on track.Good on you.
I have a few thoughts though,that I would like to share with you and the other wantoks with regards to what you have posted.And I do also have some further questions to ask you to further our discussions.
One of the major problems you have highlighted was the problem of excessive spending by past governments. You have subsequntly pointed out that one way through this problem would be to have a realistic budget where, the government is able to prevent the current deficit from growing to magnanomous proportions.
I agree to that as a part of the package of the comprehensive solution to remedy our current economic woes.So if we are to employ such a measure,it would be logical to assume that there will have to be some significant changes in as far as spending(importing)is concerned.The question then is what do we have to specifically cut down on.
I don't beleive that spending on infrastructural development has to be cut for us to achieve that.Maybe we should cut spending on,processed foods like rice,recruitment of skilled labour to begin with and then maybe look at encouraging consumption of local produce by investing into existing projects and then train our vibrant human resource to fill skilled positions within the workforce.But I am also wary of the fact that with the implementation of such we might infact create a bigger problem in facilitating inflation. I am thinking along the line that with the decrease in supply of commodities the intensity of the needs of consumers may remain the same or increase.
The other point you have pointed out that has particularly interested me is the issue of "masive pecks and previleges of public office holders".That to me is a very big problem in our country today.There are lot of public servants today in the country holding onto public offices that are unecessary or could have been better off merged into a smaller more efficient body.The entitlements paid out to the respective public office holders alone could have been better used in bringing about tangible economic developments subsequently leading economic growth.
The other problem that I have seen is the fact that during the process of policy making alot of public money is continually misused. Politicians and beauracrats alike tend to want to host meetings and seminars between the policy makers which are most often politicians and the bearacratic hierarchy in some of the most exclusively expensive places within the country.Most of this happens in Port Moresby.Why can't they do it within the parliament house which doesn't cost them a single toea.I mean what is the idea of building one of the finest achitectural monument in the southern hemisphere and not being able to make full use of it.Beats me when it actually costed tax payers millions of kina to build it!
There is more but I will wait till next time to post them. Thankyou tumas na sori sopos mi soim belhat liklik long final paragraph blong mi.
Not all have perks and previlidges: an experience of one public office.
August 12 2002, 5:31 PM
I was at one time the executive head of a deemed constitutional office.
I was on what is now a level 4 classification.
There were no "perks and previlidges" for me as the executive head and the 'board' had no perks and previlidges. The board members were entitled to a yearly stipend and had sitting allowance for each day they attend the board meeting. All entitlements were stipulated under the Boards (fees and alowances) Act.
At the time (1983-1990) the members were paid a yearly stipend of under two thousand Kina, and an allowance of fifteen kina a day when attending Board meeting. The Chairman and deputy has slightly higher allowance of additional ten to fifteen kina above the ordinary member.[these are approximates only]
Public servants members of the Board were not entitled to any allowances. Public servants are allowed duty travell allowances, and this is due to them only when they leave their location of work.
As the executive I had to ensure that non resident members had their travel warrants paid for and their board and lodging paid for while they are in Port Moresby attending to official duties.
No seperate cars were hired, their internal movements were done through the use of the official car with the office driver, attending to their transportation within the city.
Their accomodation would be respectable enough but not extravagant. None of my board members were accomodated in the Islander Hotel, now Holiday Inn nor the Gateway etc. The Dove Travel in Boroko, is where they are usually accomodated. Its within budget and within walking distance to the office building located in the 4 Mile Government Offices. The Board meetings are always held on location, where we have excess to staff for briefing should that be required and other administrative assistence. There is no need to hire conference rooms.
For their lunches and dinners, I'd engages women's groups in the city to prepare nutritious meals for the board members. The Board meetings were usually three days and and an mount of less than five hundred kina would be all I spend to take care of food and refreshment for the Board members.
The board members were not small men and women, they include judges, politicans, respected privete legal practitioners, womens leaders, church leaders, reputable academics and senior police representatives.
It amazes me these days that other lesser qualified people could be entitled to such "perks and previledges".
Just my contribution to the discussion on cost cutting measures and perks and previlidges of public office holders.
Re: Not all have perks and previlidges: an experience of one public office.
August 12 2002, 6:03 PM
Which organisation was that?
Re: Re: Not all have perks and previlidges: an experience of one public office.
August 12 2002, 6:38 PM
That was a deliberate ommission, as the content of the information shared is sufficient (and factual) for the readers to form their own conclusion as to which public office it is being discussed here.
Cutting spending along is not enough
August 12 2002, 9:44 PM
I am an optimist and I believe that the new government has the will to turn the economy around over the next five years. However, expenditure cutbacks is not the only way out. If we look ahead there's no more minerals and gas, the mining sector is fast contracting.
Our only hope is agriculture. We must not kid ourselves...honestly this is where the majority of us come from. This is where 85% of PNGeans live and these are the people who own the land that need to be cultivated for improved productivity, income, economic growth and development.
One of the problems with us PNGeans is that we are too much crying out for handouts and in the process forget that government is we the people and it is people who have to develop themselves and their areas (wards, villages, LLGs,etc.). Most of us have have become lazy beggers in our own country...Government is us, the 5.1 million PNG citizens, and not the 109 MPs, not Waigani!Handout dependency must stop.
With agriculture as our focus, we need the roads to be maintained...for service delivery and access to markets. We need to promote law and order because a good law and order situation is critical to a well-functioning market economy. We also need health and education which are important for improvement in productivity.
Expenditure cuts are important but are not a balanced approach to correcting the fiscal adjustment that PNG is faced with. In this regard, government should consider closely the option of increasing revenue (may be excise tax on beer and cigarettes?).
Obviously, there are no easy options to addressing PNG's economic woes. While revenue measures will impact negatively on business conditions and ecnomic activity, and may increase the burden on the poorer sections of the society, the same outcome will arise in relation to expenditure cuts. However, more importantly, expenditure cuts that will weaken the structure of the PNG economy will have a negative impact on PNG's growth and development prospects over the long term.
A major problem PNG faces is that the government wants to do too much therefore ends up spreading its resources too thinly, that at the end of the day, we see not impact. This is waste of money. We need to focus expenditure on the key areas outlined above...and if we need to cut, restrict expenditure cuts to none-core programmes.
A mjor ingredient is political will and commitment, because past experiences show that without these, policies and strategies are just dust-collecting docunments.
These are some of my thoughts to add to the discussions.
Re: Cutting spending along is not enough
June 19 2006, 9:31 PM
This is one of the best of the writings
Cost Cutting measures
August 12 2002, 10:39 PM
In order to cut spending government must do these:
1. Prioritise spending - spending on necessary sectors - such as agriculture, infrastructure, education, health and law & order,
2. Reduced number of ministries and and merge departments which have overlapping functions,
3. Continue privation program - this is one way of reducing liabilities,
4. Continue retrenchment exercise of public servants thereby enhancing productivity. Large public service makes it unproductive,
These are some of the measures, government of the day can effectively influence.
You can add others to your list...
August 13 2002, 7:57 AM
1. Abolish EDF and the govt will save ~K150 million annually (ie. K1.5 million x 109 MPs) and ~K750 million in 5yrs. This is 3/4 billion kina and will be enough to rebuild Okuk Highway and other infrastructure within 5 yrs and put PNG back on the "road" to recovery!
2. Stop retrenchment of public servants. This exercise is costing the govt K75 million annually. Instead use this money to up-grade all tertiary college, unis, technical colleges, etc and retrain the public servants who have not reached the retirement age.
3. Revamp the Public Service machinery to improve/achieve efficiency in delivery of goods and services. Already it is costing the govt over K650 million annually to pay salaries of a burgeoning public service workforce that is already highly inefficient!
4. Look at alternative revenue sources. One example that comes to my mind easily is to lower import duties on cars to encourage greater ownership. From simple cash-flow analysis the govt could raise over K1 billion from fuel tax, registration, etc. in 5 yrs time if PNG imports on average 100,000 cars per annum (ie. ~6000 cars for each province and combining Central/NCD). This money can be used to improve roads and transport infrastructure.
5. Example 2 on alternative revenue sources: Invest in bioprospecting. We have discussed this elsewhere but the benefit is enormous.
6. Example 3: Improve IT applications in PNG - introduce Uni course, which at present are geared towards end-user applications, to improve systems expertise such as programmers.
7. Govt should withdraw itself from equity participation of resources projects and focus itself on good governance, esp. ensure that environmental safety and compliance are rigidly enforced.
8. Govt should re-divert gas pipeline from PNG/Qld, which has been on the rocks lately and it appears Peter Beatie is less enthusiastic now than he was a year ago, to Kurumbukari (or Ramu) and start an industrial smelter sites there for large scale operations. This will justify investment in Highlands-Pacific's Nickel/Cobalt and perhaps bring in Comalco to refine their Alumina there too.
9. Encourage/improve food productions (before all our lawyers start falling death at Wagani Court Houses!) to improve the nations general health. On this note, stop the cheap dog's meat that are dumped on us by NZ (I mean lamp flaps).
10. and many, many more...time is against me and I am off to bed! See you all later.
Here's a practical list of "To do things"
August 12 2002, 9:20 PM
Here's a pratical, 'MUST DO' list:
1. Reduce real wages and other perks of MP’s, CEO’s, and Heads of Departments by 30%.
2. Reduce MP’s support staff by 50%.
3. Abolish all “Shadow’ (or Vice) Ministers. Somare has done that! Bravo!
4. Abolish dual-deputy Secretary regimes within departments.
5. Purchase 4-seat, clear glass Mazda 323’s vehicles for all MPs.
6. Purchase 4-seat Suzuki hard tops for Heads of Departments and Statutory bodies.
7. Pool all department vehicles on Friday’s.
8. Strict use of office facilities and equipment – at departmental & MPs offices --
including putting maximum thresholds on telephone calls – internal & external.
9. After hour fuel costs borne by MPs and user of government vehicles.
10. Institute laws preventing sacked CEO’s and MP’s from ever holding public office.
11. Legislate laws ensure MP’s spend minim 4
months in their electorates.
12. Institute Performance Appraisal Systems – done by independent authorities --
which keep tabs on MPs, CEOs’, and Heads of Departments.
13. Ensure all potential leader’s be screened for past criminal activities including white-collar crime.
14. Appoint CEO's on merits ALONE. Interviews, appraisal of applications, candidate selection and
recommendation be the function of credible and reputable private firms/institutions with no ties to the PNG political sphere.
15. You can add your own…
Point is: we must make sure the entry-level thresholds are higher, and the gains of being in office on par with rest of society.
The latter will deter scrupulous, rent-seeker’s and sucker’s from entering office in the first place. Rather, it would ONLY allow
‘genuine people’ with a heart for service – or service before self -- to hold office.
That is, ‘there’s nothing to gain’ being a MP/CEO or whatever, in the first place.
12 August 2002
August 13 2002, 2:05 PM
Some points to consider:
1) Create a realistic Budget: minimises deficits
results in the lowering of debts.PNG is currently
spending beyond its affordable means.That is to say
that any budget created from now on has to be
confined within the boundaries of what we can
2) Improve health and education within the country.A
Healthier PNG builds a stronger,economically sound
3) Review all major public servants (beauracrats)
salary payouts, contracts, entitlements etc.
Merge departmental functions like the dual
secretary system into a one bigger,less costly and
4) Centralise power and review all MP's salary
package.Remove vice ministries and all other #2s
and #3s at the policy making (political)level.
5) Review travel allowances packages for all public
6) MP's having bussiness interests should put the
balance sheets for their respective bussinesses on
the desk of the ombudsman prior to being ushered
into office.This is so that MPs are prevented from
compromising national interests with their personal
7) Encourage downstream processing and invest in
potentially more profitable ventures such as
Bioprospectivity as pointed out by Clement
August 13 2002, 4:59 PM
A lot of brilliant of ideas have been said thus far. However, listed below are my piece that, I thought are also worth considering in addressing our economic woes.
1.Lure overseas manufacturing companies car,clothing, electronics, telecommunications, Agricultural products and...) into PNG by providing tax exemption for longer period of time, say ten (10) years. This would provide mammoth employment opptunities for many of our lowly and mid-skilled youths. This imitative would be a major remedy for the uncontrollable law and order situation that is damaging our country. Spending millions of kina on police force alone does not seem to help. The force appears somewhat to be collaborating with criminals and the taxpayer’s money seems to be disappearing at a bottomless pit.
2.Maintenance of road infrastructure MUST become an
immediate priority NOW.
3.Rejuvenate commodity stabilisation funds copra,Cocoa, Coffee and others).Ensure strict and prudent management of these funds by entrusting trusted and transparent business leaders within these industries to manage the funds. They need to provide regular reports to the government. Let alone politicians and others who know next to nothing or have only a faint idea about such industries.
4.Ban imports on english potatoes and other products that are already grown in larger quantities in PNG.
5.The government should fully utilise legal expertise from the "Attorney General's Department" and Business Consultants from the "National Research Institute" of PNG rather than paying huge sums of money to private businesses.
6.Localise foreign contract officer’s position with
nationals within less than 5 years. The Labour Department's policy and implementation on this does not seem to be that effective. Just look at some contract officers who are living on K1,000.00 and even higher PER WEEK houses and apartments.Let alone their huge pay check.
7.Increase funding to institutions so that they can
provide skilled and "ready" people to the the workforce.
Open up cases
August 13 2002, 5:22 PM
Yes bro. I totally agree with you. But we might first start by building our public image first first and give some confidence to our international observors and business community. Why not investigate and screw the culprits who infact, directly or indirectly drained the country. Why not start with the Cayman deal!
Govt must not do everything...
August 13 2002, 8:04 PM
Given our capacity to pay and implement, govt must focus on these:
1. Fix the major highways (Highlands, etc..)
2. Support primary health and basic education (not through free education, which promotes idleism and handout mentality)
3. Revitalise/streamiline/downsize agriculture institutions (at the moment Commodity Boards have their own legislations to do what they they want without being held responsible for anything..Policies by DAL do not necessarily get implemented by the these empire-building Boards)
4. Change people's attitudes and behaviour...start with children at home and in schools...sounds crazy? but logical...this is targetting the root cause of law and order problems we face. Funds to Police, CIS, Courts, do not necessarily guarantee elimination/improvement of law and order concerns in the long term...we will not see any end to law and order as a priority if we continue only he "prune the branches and not weed out the tree with its roots". We need a top-down and bottom-up strategy to fighting law and order (including governance and corrup practices) concerns.
5. Privatize liability institutions...government's role is to govern...not to run businesses...let private sector take on the responsibility of wealth generation. Just a reminder that private sector includes the buai sellers, wood carvers, backyard workshops, and 85% of our people in rural areas who need to move into the cash economy...
Folks, let's remain optimistic.
Govt must not do everything...-more for the list.
August 13 2002, 8:55 PM
1.Stop transfer pricing by importers and exporters. This is destroying the Kina,makes a mockery of exchange control and cheats the tax department of much needed revenue.
2.Cut down on short term expatriate positions. Anyone in the country for a short term is only out to get what they can. Bad for business bad for employment and bad for the currency.
3.Follow the American example. Cancel the operating licences of any business found guilty of bribery and corruption.
And the beat(list) goes on...............(Sonny and Cher)
IMPORT vs EXPORT
August 15 2002, 9:18 PM
The Kina Value is so bad but PNG has an excellent opportunity to capitalise on the weak Kina. The government, in consultation with the private sector, should have in place a time frame to scale down imports and maximise exports.
Lets take rice for instance. There are local producers. In consultation with that producer, an import-scale-down program could be agreed to so that whilst Australian rice are turned away, the local producer proportionately produces enough rice to feed PNG and at the same time export its rice overseas. And Australia should do more to support PNG in this regard.