SOEs not capable of funding PNG 2016 Budget, 2015 Supplementary Budget, says Polye

PORT MORESBY: Opposition Leader Don Pomb Polye has described the revenue sources of the 2016 Budget and the 2015 Supplementary budget, particularly the State-owned entities, as ‘forcing a horse to drink water.’

“They don’t have the capacity to source funds to fund the Budgets.

“Why is the irresponsible government imposing on them,” said Mr Polye in the Opposition’s Budget Reply which it did not have the chance to reply as the government used its numerical strength to bulldoze its passage.

Experts and economists have confirmed it, saying to fund 2016 Budget will be a challenge for the government.

The revenue claimed to have been raised to the total of ever K1 billion from the following areas are very questionable: 

• K250 million from Internal Revenue Commission 

• K150 million from PNG Customs Service 

• K240 million from the Independent Public Business Corporation (IPBC) 

• K110 million from other State Owned Businesses 

• K201.6 million from National Petroleum Company

• K50 million from National Fisheries Authority 

• K70 million from the Bank of PNG 

• K30 million from the National Gaming Board

“It is a good business norm and General Acceptable Accounting Practice (GAAP) for profitable companies to declare one interim dividend during the year and a final dividend after the year’s end when audits confirm profits.

“It would only be by Board resolution that various dividends could be declared under very special circumstances,” said Mr Polye.

However, he said, the O’Neill Government forcing all the State-owned Entities (SOEs) and other state institutions to declare dividends outside of prudent international accounting practice, citing NPCP which has declared 3 interim dividends.

“Other SOEs have also declared dividends abnormally. Recently Water PNG declared some so-called dividends on the 29th October 2015 or thereabouts.

“The scepticism is that Water PNG has not had its books audited for the last two financial years,” he said.

He said the same was true for the above mentioned entities that appear to have declared dividends.

He has alluded to such irresponsible act of the government being one of the reasons among others to have 2016 Budget bulldozed without giving the Opposition a week to give its reply.

“The deception is that the prudent or best international standard business or accounting practice was not applied here in these so-called declared dividends to the State for a supplementary budget!

“As far as the people are concerned, most SOEs are run-down, mismanaged and unprofitable,” he said.

He said the Opposition stood to be corrected as the declaration of profits and dividends by these SOEs was fake, as much most of these SOEs were in the red.

“What the Opposition is concerned about is that critical operational funds are deceitfully diverted to cover up poor economic management and abuse of public funds.

“The Opposition calls this as being very careless behaviour by the Prime Minister and cannibalisation of State businesses and SOEs,” he said.

Polye said the fundamental discrepancies in the budget documents left the people a lot to be desired for, especially the government’s competency in putting the country’s budget together.

He has urged the people and the business houses to carefully study the budget books if they have them as most figures and facts do not co-relate with each other.