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**** Speech by Hon. Peter O’Neill CMG MP, Prime Minister
32nd Australia - Papua New Guinea, Business Forum and Trade Expo 16 May 2016 ****
May 16, 2016
- Honorable Concetta Fierravanti-Wells, representing the Prime Minister of Australia;
- Greg Pawson, President of the Australia Papua New Guinea Business Council;
- David Toua, President of the PNG Business Council;
- Ministers of State;
- Members of the Diplomatic Corps;
- Business Leaders;
- Ladies and Gentlemen.
Thank you once again for inviting me here to address you at this very important gathering of the business leaders of our two countries.
Your attendance reflects strong confidence in Papua New Guinea today and tomorrow.
I welcome your confidence and this morning I will seek to demonstrate why it is well placed in every respect.
The relationship between Papua New Guinea and Australia is well established, and it has great significance on both countries.
Our nation and our people have a special place for Australians.
Our two countries have been through war together and many Australian lives were lost on our soil.
We have a shared love of sports, and I think each week more Queenslanders are cheering on the Hunters than they are cheering on the local side.
Papua New Guinea is Australia’s largest investment destination and one of the largest trading partners.
No doubt Australian businesses make a significance contribution the socio-economic development of Papua New Guinea since 1976.
Our two Governments continue to share warm relations.
Papua New Guinea appreciates Australia’s support as we prepare to host APEC in 2018.
APEC provides a pivotal moment for Papua New Guinea to showcase the economic opportunity that exists in our country, while showcasing our rich culture and diversity to a global audience.
There is a lot of work that is being done to prepare to host more than 200 APEC meetings between now and November 2018.
Through close co-operation with our partners from Australia, the United States, and around the region, preparations are on track, and confident of delivering a successful APEC in 2018.
In two weeks, Papua New Guinea will host another significant global event with the 8th Summit of African, Caribbean and Pacific Heads of State and Government.
With the meeting focused on developing responses to the challenges of sustainable development, the Summit will bring together Presidents, Prime Ministers, Ministers and delegations from up to 79 countries.
The Summit will be an early test of our systems to host major events. But this is one of many events that Papua New Guinea will host in the coming years. This includes the FIFA Under 20 Women’s World Cup in soccer, and a series of matches in the 2017 Rugby League World Cup.
We look forward to many Australians visiting for these events.
Given the closeness of our relationship with Australia has its issues from time to time.
As in any close relationship we have moments where we need to come together and establish common positions on a range of issues.
The proposed Pacer Plus Agreement is an issue that has received a great deal of attention in recent months.
Papua New Guinea, as you know, has some issues with Pacer Plus as we see that these issues are very core to the national interest of Papua New Guinea because of the unique position of our economy.
Clearly in terms of our size, we differ greatly from our smaller Pacific Island partners, and our relationship with the Asian economies encourages us to take a different approach.
Papua New Guinea is more interested in pursuing a bilateral agreement with Australia that will serve our mutual trade interests well, as opposed to the proposed agreement that would have a negative impact on our trade arrangements between our two countries.
As our Trade Minister, and his officials, have said, they will peruse trade agreements with Australia and with New Zealand that are similar in nature to the agreement that we have with the European Union.
Through that agreement with the European Union, the Economic Partnership Agreement, our exports to this market have doubled. This access has been particularly beneficial in sectors like fisheries and agriculture.
While this is the path for Papua New Guinea, we appreciate the benefits that the Pacer Plus agreement will deliver for other Pacific Islands economies that are very different in structure to our economy.
Today’s theme of this expo is particularly appropriate for the time in which we now find ourselves.
In light of the current global economic climate, the theme “Today’s Investment - Tomorrow’s Returns" is probably not so much about stages of development, but has more to do with economic cycles.
In Papua New Guinea we have an economy that has experienced positive growth for 14 years.
Our economy has grown at an average 9 per cent each year between 2012 and 2015, and was among the highest in the World in 2014 growing at 13.3 per cent.
We have demonstrated that the fundamentals of our economy are sound.
We have demonstrated that we can build a strong economy as we are demonstrating today.
We are demonstrating that we can manage the economy during tough times.
The domestic economy is expected to grow at a moderate rate this year as we deal with lower commodity prices.
Low commodity prices are not going to last forever. They have hurt many countries including Australia, and other commodity producing nations.
But the challenging times we are facing today are not permanent. Commodity prices are steadily rising. This includes the resources sector, and the agricultural sector.
Despite this Papua New Guinea is also attracting significant global investment in new projects that are going to continue to develop the economy and grow our country in a meaningful way.
The most significant of these is the Papua LNG project that will be delivered by TOTAL from France.
This 18-billion-dollar investment is underway and during the construction phase in 2018 that will create around 13,000 jobs in Port Moresby and Gulf Province.
This project, just like the first LNG project, will be more cost-effective than similar LNG projects around the world.
The Government is encouraging Papua New Guinean companies and other companies that were involved with the first LNG, to get involved with this project so that we can deliver it successfully as we did on the first project.
TOTAL is investing at the right time in Papua New Guinea. It is capitalising on improvements in global commodity prices in the coming years. It is the right time to invest, when the cost structures are low in PNG.
We are also encouraging companies with other projects in Papua New Guinea to proceed, and our government is fully behind them.
That includes the expansion of the ten billion dollar p’nyang project which is expected to be approved within the next few weeks, which will add on to the first LNG project.
We are also in discussion with the developers of the Wafi-Golpu mining project and the Frieda River gold and copper project and this are moving ahead.
At the same time the Government is continuously working to improve its in systems so that we can provide an environment that is conducive for business.
As a result we have directed the Chief Secretary to cut red tape and bureaucracy in the public sector, which will encourage business to prosper with the support of Government.
Certainly we all have many challenges, the Government is meeting those challenges.
We are managing debt levels. Let me tell today that it remains well below our ceiling of a 35 per cent ratio of debt to GDP.
In fact, it is 28% of the new GDP numbers that have been released – which remain at around 18 billion Kina for this year.
Out of which 4 billion Kina is foreign debt, largely through concessional loans.
In fact, if you look at the numbers in 2015, just over 90 million Kina was paid to foreign debt servicing in that year.
We have adjusted Government spending and increased efficiencies in our Government, we are listening to the business community on how we can improve our systems.
There are issues on which we hear from our businesses community loud and clear – particularly in relation to the availability of foreign currency.
The Central Bank Governor will be speaking later today and he will expand in this issue.
I can assure you that in the coming weeks we see an increasingly improved foreign currency availability and we thank the commercial banks for working closely, particularly Westpac, ANZ and BSP and Kina, who are working closely with the Central Bank in addressing this issue with Government.
As global conditions ease, this is the right time to invest in Papua New Guinea.
Since coming to office in 2011, and following our re-election in 2012, we have been working to overcome neglect of the past.
We are moving on from the lost decade that began at the start of this century – where the basics government services were basically left wanting.
Where despite rising income from the resources sector, government revenues were wasted.
Law and order declined, education standards dropped, healthcare was in a mess and national infrastructure in decline.
Over the past few years our Government has sought to turn this around.
Anyone who knows Papua New Guinea would have seen first-hand the change that are taking place today.
We now have another million more children in school thanks to our free education policy.
We have an improved healthcare system throughout the country, and the delivery better delivery of medicines because of our universal healthcare policy.
We have increased resources for police, the judiciary and correctional services and that is making our communities safer.
We have also invested billions of Kina in restoring the much neglected national infrastructure.
We have invested many billions of Kina to many neglected provinces and districts right throughout the country.
New schools and new teachers’ colleges, new healthcare centers, new roads, bridges and jetties are being built around the nation.
We are laying foundations of the ongoing economic development of our country.
We are getting the basics right in Papua New Guinea that creates the right environment for businesses.
In just under one year the people of our nation will judge our Government on our record. The people of Papua New Guinea will decide if we have delivered on our promises – and if we have changed the nation for the better.
As far as we are concerned, we have delivered what we promised and made process made Papua New Guinea.
We have made Papua New Guinea into much more stable destination for foreign investment.
When we get to the election next year, our nation will have seen only two Governments in the space of fifteen years.
This is big change from years previous when Governments would change every two years.
We have reached a new level of political maturity in Papua New Guinea where Members of Parliament commit to an elected Prime Minister and commit to a Government for the long term.
Governments in Papua New Guinea now have the opportunity to deliver their plans and their programs over extended periods.
This reduces business risk and reduces surprises that can undermine the quality of investments.
Yes, we always have an opposition that claims it will change Governments, but the history of the past three Parliaments has demonstrated very clearly that there is a high level of stability.
Currently we have nearly 90 members of our 111 member Parliament voting with the Government.
We will return to the people next year and w will stand by our record. We will seek re-election as a Government with the support of our coalition partners.
It will be an interesting election – of course elections in Papua New Guinea are very robust.
But as investors, you can rest assure that the Government that is elected in 2017 will build on the capability that we have delivered in this session of Parliament.
We thank you for your interest in investing and doing business in Papua New Guinea.
I hope you all expand your business opportunities at this forum, and we will see you in Port Moresby, in Lae and around our nation.