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**** Speech by Hon. Peter O’Neill CMG MP Prime Minister of Papua New Guinea At the National Leaders’ Summit “2015 - A Defining Year for Papua New Guinea” 5 February 2015 Gateway Hotel, Port Moresby ****
February 5, 2015
Deputy Prime Minister, Honourable Leo Dion,
Ministers of State,
Governors of provinces,
Members of Parliament,
Heads and CEOs of Government Agencies,
Partners from the Private Sector, especially Mr. Andrew Barry, the new ExxonMobile PNG Managing Director, and the Managing Director for Oilsearch, Mr. Peter Botton,
all the other people from the private sector,
Distinguished Ladies and Gentlemen.
Good Morning to each and every one of you.
It is once again a privilege to address, the National Leaders Summit today.
I welcome all leaders, both political leaders and public service leaders from across the nation for this meeting here today which is happening at a very critical and challenging time in our national history.
2015 will be a defining year for Papua New Guinea.
2015 is a year when our national economy will reach a new level of growth and development, despite some strong headwinds from the global economy.
2015 will also be the year when we host significant regional events including the Pacific Games and Pacific Islands Leaders’ Forum.
In 2015 we will celebrate 40 years of our nationhood.
And 2015 is also a year where the core policy areas of our Government, such as free education, better health care, stronger law and order, better infrastructure and stronger economy will take much deeper root around our nation.
Distinguished Leaders, everyone in this room has been a part of the change that is transforming our country.
We have been a part of the massive rollout of infrastructure around the nation, from large infrastructure projects such as the Lae Tidal Basin, the Kookaburra flyover in Port Moresby, through to the construction of new classrooms, bridges, jetties and airports in rural locations around the country.
We have been a part of the expansion of our free education program that has placed more than two million children in schools – what a tremendous boost that will be for our nation as these children grow and enter the workforce.
We have been a part of the delivery of universal healthcare and the upgrade of many hospitals and many housing programs around our nation that are saving lives and keeping families together.
We have been a part of the improvement of law and order that has come from an improving economy, and very importantly, from a better resourcing and a more structured approach to policing, correctional services and the justice sector in our country.
We have been part of a team that is building a strong economy, growing at a steady rate over the years.
Certainly, my fellow Leaders, we have a lot more work to do in each of these areas, but we are on the right track. There is a clear sense of direction because we have clear achievable policies.
Our officials will give us a more detailed account of the work we have done as government at various stages over the past few years.
Today the will present those issues.
But I want to take this opportunity today to make a few comments on a range of issues, both domestic and international scene that is very much central to our Government’s agenda.
In doing so, there is one critical theme that we must keep in mind today – we must, more than ever, work together for the good of our country. Working together, we can meet the challenges that lie ahead of us, and working together we will secure the future of our country, and our people.
We need to work together to deliver good government at all levels – that is at national, provincial and district levels. We must deliver services to our people that is fair, transparent, and accountable.
Before I come back to the ‘good government’ challenges, let me make some observations on the international scene.
AN UNCERTAIN AND DIFFICULT WORLD SCENE
We have seen in recent months, in our neighbour, Australia, and in one of our friends, France, terrorism at its worst.
And we continue to see in the Middle East, and in parts of Africa, terrorism is worsening – and the continued persecution of minorities, and especially Christian minorities around the world.
We have been spared of such attack in our nation – but we must not be complacent when it comes to combating all forms of evil.
We must remain vigilant, we must protect our borders, and we must do so in a robust manner ensure that anyone who arrives in our country does so through the proper immigration and customs processes.
Papua New Guinea today is a respected regional leader. After 40 years of undisturbed democracy, we are in a unique position to lead mature discussions on issues affecting our people in the region.
Our leading role in encouraging Fiji to return to a democratically elected government and voicing our concerns about the plight of our people in New Caledonia are examples of our growing influence. We have also participated in the restoration of democracy and law and order in countries like Vanuatu and Solomon Islands.
But sometimes we forgot our family, our brothers and sisters, especially those in West Papua.
I think as a country the time has come for us to speak about oppression our people. Pictures of brutality of our people appear daily on social media and yet we take no notice.
We have the moral obligation to speak for those who are not allowed to talk. We must be the eyes for those who are blindfolded.
Again, Papua New Guinea, as a regional leader, we must lead these discussions with our friends in a mature and engaging manner.
Another challenge we have for our country is to confront the global financial situation. We, as a country, cannot isolate ourselves from the impact of the international economic uncertainties. We can and we have taken measures to insulate our economy from global market pressures.
This is evident in our LNG sector.
When we entered the global LNG marketplace last year, it was a momentous occasion in our history. It has opened new horizons for our nation for decades to come.
But we have entered this new world of international economic engagement at a very turbulent time in the global economy.
Energy prices have declined in recent months and this is hurting a lot of countries and we are feeling some pain in Papua New Guinea.
Fortunately, however, we have some level of insulation with our forward LNG contracts having already been set according to a fixed formula.
We are also assisted by early LNG sales on better than expected spot prices, which of course, these sales are in addition to our earlier expectation which means a real bonus for national income.
At the same time, lower oil prices offer benefits to business and government in Papua New Guinea through cheaper domestic energy prices that will lower the cost of doing business.
But we will be affected by lower oil prices if current trend continues, more so towards the end of this financial year.
We are taking the positive with the negative so we can make this work for our nation.
Certainly we have to be conscious of the challenges that confront the global economy – not deterred or frightened by it – and we must take steps to secure the future development of our vast resources.
Global energy prices will not stay low forever – they will rise again and they are rising again. The Secretary-General of OPEC has stated that he believes the oil price has hit bottom, and in the last week have risen by as much as 20 per cent.
Long-term investors in this sector are making plans for this return to a more sustainable level.
Our Government is taking a long-term investment. Our own investments are also long-term, expecting steady returns into the future.
Further positive news this week comes from Standard and Poor’s. The ratings agency reaffirmed its ratings for Papua New Guinea, despite recent energy prices.
Standard and Poor’s still predict growth will reach 20 percent growth levels, and they expect LNG exports to contribute to economic growth, enabling the unwinding of imbalances in the next few years.
We are promoting a strong pro-investment approach by all levels of government, and all levels of our community.
The benefits to come from these investments in Papua New Guinea are clear to our investors. For example, in their Fourth Quarter report, ExxonMobil highlighted the importance of their Papua New Guinea investment to meet its global production plan and its annual earnings.
It is by far one of their best investments.
We are now looking to secure the development of new LNG plants, and wider gas sector development, as well as empowering sectors that will last beyond the LNG sector. These are sectors like agriculture, fisheries and tourism.
To build these sectors we require everyone to work together.
This approach is also going to require us to do something else. This is something that I have spoken about on a number of occasions – we must lift our productivity and improve the infrastructure which is so vital to the growth of our economy.
Productivity remains a real challenge for us. We cannot afford to be a high-cost producer both in the resources sector, and sectors like agriculture.
We have to be able to compete not just regionally but internationally. The PNG LNG story is a wonderful success story as a low cost project, but we need to build on that success – with the development of at least two more substantial projects in the years ahead.
The mining sector also continues to be impacted by low world mineral prices. That presents a challenge for us as well……a challenge we must address through better productivity and a competitive environment.
The same applies to our agriculture sector. There are some “green shoots” but more needs to be done to improve production, and ensure that we have efficient delivery from the farm to the customers.
And we must get more of our young people to regard agriculture as a worthy career path!
Finally, we must ensure that we cushion our economy as much as we can from both major and long-term decline in commodity prices – especially gas and oil.
We must also try and cushion, as much as possible, from some short-term shocks that are beyond our control. We must do this by improving productivity and competitiveness that is vital to our growth.
We must also ensure that as much as possible of the development of all our resources is accompanied by down-stream processing – to “value add” to our resources, and create more long-term employment opportunities for our people.
Down-stream processing must be positively encouraged by our national government. We have to provide affordable incentives for investors – local and foreign.
I have sought to frankly outline to you the international challenges we face as a nation.
We need to be aware of them, and we must work together to ensure they do not diminish the economic development that our young country rightly demands.
THE DOMESTIC ENVIROMENT – CHALLENGES AND OPPORTUNITIES
That brings me to the domestic issues, and the challenges and opportunities it presents.
I say once again, as I said last year, and this is with real regret, that political instability remains a real risk for our economy and the continued development of our country.
Instability is not in the national interest. It is a distraction of our attention from the challenges we have – and opportunities that lie before us.
When potential investors look at Papua New Guinea, one of the first questions they ask relates to political stability and certainty, and policy stability and certainty.
We must point these investors in the right direction, and assure that we have a strong politically stable environment.
I am certain and confident that one thing our people will remember about this term of Parliament and these Leaders, is that we are well on the way to restoring that stability – and in the process of ensuring that good government is delivering vital services to our people.
Despite these challenges, I can report substantial progress to you on key areas of significant policies – that is enhancing the standard of living for our people.
One of those policies, that has been close to my heart for over 12 years since I entered Parliament, is the establishment of services to the districts. The district authorities now play a key part in the genuine decentralisation of decision making, and as a delivery mechanism of basic services. Especially basic services to our people.
I have travelled widely in our country in the last two years, and have observed first-hand the changes that are happening everywhere.
People can see, for the first time, light at the end of tunnel. A light, that is giving hope to our people of a better and meaningful life.
That is refreshing – and I commend our governors and my colleague members of parliament for their hard work you doing in your respective electorates.
Today we will hear from some of the districts and the provincial administrators, and I am sure we will all be inspired by the stories they tell.
This government will continue to supply the resources that are needed through all of our districts and provinces, through the PSIP and DSIP programs that we have as long as we remain in government.
We have already spent close to 3 billion Kina in the last two years, this year we are going to spend a further 1.6 billion Kina, an additional 180 million Kina since 2014.
If we continue to do what we are doing with these two programs, PSIP and DSIP, we will continue to change each of our electorates and give hope to our people and especially future generations.
We have already strengthened the role and authority of districts, and local level government councils. They are starting to work effectively.
The District Development Authority Act will ensure the role of districts continue to grow – and helps deliver on our commitment to devolving to the levels of government close to the people, and make sure there is actual delivery of basic services to our communities.
I want to assure you that the National Government will also continue to transfer more functions and more responsibilities to the provinces so that we can also empower them – so we can empower these government levels that are closest to the people.
We must provide a more determined effort in reforming the Public Service. Despite numerous increases in remuneration packages over the past years, public service, generally lacks commitment in the discharging of their responsibilities. This is despite increases in funding for many of their activities.
Public Service Leaders at all levels, national, provincial and districts must lead their public servants by example. That is by showing more commitment to work, working longer hours, working more smartly and working for our people and working for our country.
Let me conclude by saying, we as a country face some very significant challenges. Some of the challenges I have highlighted to you today. Some of them due to factors beyond our control or influence, such as lower world oil prices, lower mineral prices, lower prices for some of our agricultural exports, which are a threat to our national economic growth.
The impact of world economic conditions, and uncertainty, cannot be overlooked.
And we face some significant domestic challenges.
Today I want to ask you to do more to ensure that our people obtain the basic services they are entitled to receive. They are entitled to these services.
We have made substantial progress, especially through the implementation of free school education, improved basic health services, strengthen better infrastructure and safer communities by strengthening law and order. But more needs to be done. The establishment of District Development Authorities, and the direct funding of the Provincial and local level governments, are helping to deliver what our people want.
We need the support and the co-operation of all leaders, at all levels of government and public service if we are to maintain stability and confidence in our county and our economy.
We also need the same support and co-operation if we are to deliver the services our people deserve, and to ensure economic growth and its benefits are shared as widely as possible with our people.
My final message is that we must work together in the national interest. We must work together for the common good of our people.
The need for us to do so has never been greater than it is today.
So once again I thank you for listening to me. I hope you enjoy the presentations from our officials.