K1.5 billion credit limit irks O’Neill

THE Government has maxed out the credit limit on the K1.5 billion temporary advance facility (TAF), Ialibu-Pangia MP Peter O’Neill claimed in a statement yesterday.
TAF was established under section 55(2) of the Central Banking Act to provide short-term advances (payments) to the Government.
O’Neill said: “TAF limit in 2019 was K200 million. Today, under Prime Minister James Marape, it is K1.5 billion.”
He said the facility was increased in early 2020 to K300 million and later in the same year, it was increased to K1.5 billion “due to incredulous overspending by the Marape-led Government”.
O’Neill described this as “not being temporary” but “is constantly being juggled”.
In a statement on Tuesday, Prime Minister Marape denied previous news reports alleging a cash crisis.
He said revenue collection was pushing 50 per cent through prudent management by Treasury, and Finance and Planning.
“We collect and pay as we go; we are managing our cash flow to make sure what we collect go to the essential and recurrent expenditures, then our core development budget.”
Marape also promised that Treasury would release a mid-year fiscal economic outlook report at month’s end.
However, making references to investments in free education, universal free health care and new infrastructures during his reign as PM, O’Neill said: “We borrowed carefully and spread the loans among multilateral institutions like the World Bank and Asian Development Bank.
“We leveraged international financiers and closed funding gaps with domestic raisings.
“We did not need a bail-out from the International Monetary Fund or payday loans from our generous Australian neighbours.
“Papua New Guinea was financially independent and relied on the quality advice of our own people, not foreigners,” O’Neill said, adding: “Debt to gross domestic product (GDP) was less than 35 per cent.
“Today, it is over 53 per cent.
“Today, our people struggle to put food in their mouths.
“Bellies are fat of a very few and yet our people must starve?”