Why is PNG experiencing a cash flow crisis in 2025?

 

Why is PNG experiencing a cash flow crisis in 2025?

I believe the problem began in 2022 when Connect PNG was adopted as Government policy. Since then, the Government began to make forward contracts into the future. In essence, spending future revenue by contract.

I believe that Section 209 of our Constitution was designed to prevent Governments from spending future revenue, that is, cash it hasn't collected yet.

In August 2023, when I realized the problem: I asked a question to the Minister regarding Connect PNG in Parliament. In that question, I pointed out to the minister that I was concerned that the Government had breached Section 209 of the Constitution. I pointed out the potential problems this would cause to future revenues.

In December 2023, during my Budget Debate, I pointed out similar issues to the Government. I left the Government a month later.

In another sitting in 2024, around June, I believe, I asked a question to the Treasurer about the FBO, which showed that almost K1 billion was cut from other votes and paid to certain provinces. I have not been given an answer to this day.

As of today, many Government agencies and provinces have not been paid any grants or operational funds since May last year. 3 Quarters of non-payment.

This indicates that we have a serious cash flow issue. When I raised the issues in 2023, the Government ignored my warnings. They didn't want to listen.

By committing revenue not yet collected in future years to pay for over commitments in past years, I believe they breached Section 209 and created this current situation.

This then begs the question, what is the full extent of commitments by the Government outside or exceeding the annual Budget framework? What are our total off-the-book debts? I believe that number is close to K50 billion in hidden debts, kept off the books.

Who is then directing the Treasury and Finance departments to make all these payments off the books? Isn't the reason the Treasury and Finance were separated in the first place many years ago to prevent the very situation we are now in? So, who was responsible for overriding the check and balance mechanism between the Treasury and Finance? We didn't arrive here by mistake; someone created this situation.

I have said many times that checks and balances are critical in a democracy. Cripple those mechanisms or make them redundant and we will face serious consequences.

Almost all the checks and balances in our system of Government have been totally undermined by this Marape Government. To the point where only the Judiciary remains independent. All the others are now simply extensions of the Executive Government.

The job of the Executive Government is not just to clear contracts for their friends and political supporters. Their job is to look into the future, anticipate problems, and steer the country.

In this case, they have totally failed in their duty of care to our people. While IRC will collect K19 billion in taxes this year, a significant proportion of that will go to paying bills incurred in 2024, 23 and 22.

Tucker boxes are managed better than this.

PNG needs a reset; if we don't want a hard reset, then at least have a soft reset.