Grow economy ahead of population

In economic discussions one glaring fact is rarely mentioned.
That is the huge disparity in the numbers of those who contribute to the national purse and those who must eat out of that purse.
Look at it this way. A father alone in a family of seven is gainfully employed.
He is required not only to feed and clothe but also provide school fees, transport fares and other expenses which when added up often goes beyond his meagre earnings.
Before the next pay day arrives, the family is out borrowing food and money.
This example applies at the national level as well.
There are today about 200,000 public servants and about an equal number in the private sector.
These formal employees plus company taxes comprise the bulk of internal revenue in the country. If there is K12 billion collected annually in internal revenue, about K10 billion comes from taxes.
That is a fair sum until we count the numbers of those who want a part of that money.
They comprise the entire population of PNG, numbering some 10 million or thereabouts at present.
So how does one make the income tax contributions of just 500,000 of formal sector workforce and the company tax of maybe less than 200 companies go towards supporting 10 million people.
It would take a miracle.
Like the father of the big family will do, PNG does go out to borrow and take from kind souls in aid assistance in order to fund all items on the national budget.
The colonial administration used to impose a head tax of a certain amount.
It was not much but everybody stood up to be counted and everybody felt included and most importantly that they had contributed to any goods and services that were brought their way.
When the head tax was removed, gone from the head too was any notion of personal contribution for personal gain and in its place was introduced the now most popular notion of Government supply, the hand-out mentality.
Today, by no stretch of the imagination can the arithmetic work out when you collect taxes from only five people and try to use it to feed, cloth, educate and transport 1,000 people.
It is an impossible situation.
Aid and loans are the only recourse until our production increases, our trade improves and our foreign direct investment is on an upward trajectory.
All of which are NOT happening at present.
Unless this situation can be reversed, PNG’s budget deficits will remain, its stock of foreign and domestic debt will be high and aid dependence will not be erased.
This dire situation will only get better if a situation were to develop where employment grew exponentially.
Employment will grow as a result of growth of businesses in the country. Businesses will grow if there are markets and growth in demand for their produce. And demand will increase as the population grows.
So there really is nothing wrong with a high population growth rate so long as economic growth is ahead of population growth.
The examples provided by China and India today provide ample proof of how a growing population can sustain and power-up economic growth by the power of domestic demand and consumption alone.
Often, we decry population growth as negative when this country has ample resources and space to sustain a population ten times PNG’s.
PNG needs to grow the economy ahead of the population.
If this happens, PNG will be on its way to shake off the dependency syndrome.