Rowan Callick, Asia-Pacific Editor
The Papua New Guinea Government has won a brief respite from its most pressing economic challenge - the possible loss of its value added tax.
But other issues continue to mount, placing huge pressure on preparations for the 2003 budget due to be handed down on November 5.
On September 27, the Supreme Court declared the 10 per cent VAT introduced in July 1999 as unconstitutional because of the manner in which it overrode former taxes levied by provincial governments.
Late on Monday, the court granted a stay on the judgement until next Tuesday. Until then, businesses are being advised to continue to collect the tax and hold it in trust accounts.
Part of the case being assembled by the government is that maintaining the VAT, which provides a quarter of its revenues, is a matter of national security.
The campaign to keep VAT is being spearheaded by Peter Barter, the Minister for Inter-Government Relations, who is trying to bring together the 20 provincial governments to agree on a fresh approach. He is also pushing for an urgent debate in the Parliament, which is not sitting at present but will be recalled.
There are also signs that Sir Peter may be winning over the provincial politician who brought the anti-VAT action, the governor of Morobe province, Luther Wenge, to an agreed resolution.
The national government had said, in replacing the provinces' sales and services taxes with VAT, that it would pass on the revenues to them. But Mr Wenge complained that this had not happened.
The biggest pressure is on the Treasurer, former businessman Bart Philemon, based like Mr Wenge in Lae. He has returned recently from attending the World Bank and International Monetary Fund annual meetings in Washington.
There, he sounded out the international institutions and Australian Treasurer Peter Costello about support for PNG's cash crisis, and its yawning budget gap for 2003. The replies, it appears, are still "in the mail".
But discussions with donors will continue. Paul Nielson, the European Union commissioner for development, is in Port Moresby. And several senior Australian ministers will attend the annual joint ministerial forum in PNG next month.
More than a quarter of the annual budget goes to repaying loans and, unless he wins significant rescheduling only two years after the country won its last structural adjustment program, Mr Philemon will have to take a quantum leap to scale down spending in 2003.
This will in turn require iron-willed political backing from the Prime Minister, Michael Somare, who was returned to power recently by electors hoping to recall, with his incumbency, PNG's "good old days" after it became independent 27 years ago.
But Sir Michael has yet to make a major response to the VAT crisis, or to the overall economic challenge. And firm leadership is essential with government depending on a coalition of four major parties, and smaller disparate groups and independents.
The ANZ Bank in PNG said the longer-term prospects for the kina were glum, depending heavily on gaining fresh donor support and on a go-ahead for the $6.5 billion gas pipeline to Brisbane.
Ructions are continuing over new appointments made by the Somare government, which has continued the PNG tradition of turning over most senior administrators.
The former long-time central bank governor Henry ToRobert said he had read for weeks in newspapers about his replacement as managing director of the Independent Public Business Corp (responsible for privatisations) by former politician Masket Iagnalio, but had been told nothing in writing and had failed to gain a meeting with Sir Michael, the Minister for Privatisations - which process he has suspended for review.
And the chief executive of state-owned monopoly telco Telikom, Sunil Andradi, denied receiving $360,000 "finish pay". He said it was just $193,000. Telikom's sale to Fijian interests has been halted by the new government.
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