Transparency Concerns Mount as PNG Treasury Quietly Reveals Massive Mid-Year Deficit
The Papua New Guinea government is facing sharp criticism for allegedly pressuring state-owned resource companies to hand over nearly K2 billion in early dividend payments to plug a growing hole in the national budget. The claims, made by former Prime Minister Peter O’Neill, have reignited debate over fiscal discipline and the stewardship of the country’s mineral and petroleum wealth—assets meant to serve future generations, not cover short-term spending gaps.
According to O’Neill, Kumul Mineral Holdings has been directed to pay an advance dividend of K1 billion before the close of the current financial year. Of that, K600 million is reportedly due immediately, with a further K400 million expected by December. The company’s primary source of income is the Ok Tedi Mine, which has been fully owned by the people of Papua New Guinea since its nationalisation in 2013 under O’Neill’s leadership. At the time, the mine was structured to operate independently, shielded from political interference—an arrangement O’Neill says has now been discarded.
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| Transparency Concerns Mount as PNG Treasury Quietly Reveals Massive Mid-Year Deficit" |
“Today, Ok Tedi is being treated like a cash cow,” he said, expressing concern that the mine’s earnings are being siphoned off to meet immediate government needs rather than being reinvested or saved for long-term development.
In addition, Kumul Petroleum Holdings Limited (KPHL), which manages the state’s interests in oil and gas ventures, has allegedly been instructed to advance a K900 million dividend payment scheduled for 2025—despite lacking the liquidity to do so. O’Neill noted that KPHL has been setting aside funds to meet financial commitments tied to its role as an equity partner in the Papua LNG project, a critical initiative meant to unlock new revenue streams for the country.
“After years of being tapped for emergency funding, KPHL simply doesn’t have the reserves to cover this latest demand,” O’Neill argued. He pointed to recent leadership changes at KPHL—including the replacement of its managing director and board—as evidence of political pressure to facilitate the payout.
The push for early dividends comes amid a troubling fiscal outlook. A mid-year economic review quietly published on the Treasury website reveals a K1.6 billion shortfall in revenue combined with an unexpected K500 million surge in expenditures—creating a nearly K2 billion deficit just six months into the fiscal year.
O’Neill urged State Enterprises Minister William Duma and Mining Minister Renbo Paita to intervene, calling on them to tell Prime Minister James Marape to halt what he described as the “raiding” of public resource companies. “These dividends belong to the people of Papua New Guinea,” he said. “They should fund schools, health clinics, and infrastructure—not disappear into Waigani’s slush fund.”
Prime Minister Marape, currently overseas, has announced that Parliament will reconvene on November 18 for a two-week session focused on passing the 2026 National Budget—a process that will likely face intense scrutiny given the mounting concerns over fiscal sustainability.
For many Papua New Guineans, especially in resource-rich regions like Western Province where Ok Tedi operates, the issue cuts deep. “Our land gave this country wealth,” said Joseph Kauk, a community leader from Tabubil. “If that wealth is being spent on politics instead of people, then we’ve betrayed the trust of every citizen who believed in national ownership.”
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