Is it the devil you know

in New Guinea politics?

From PERCY CHATTERTON in Port Moresby

Papua New Guinea’s House of Assembly began its Budget leeting on September 23 and after a two-week run adjourned on )ctober 4 for a week’s break, after which it is to meet for a further wo weeks of sittings from October 14 to 25.

During the first half of the meeting inance Minister Julius Chan’s Budget as had to play second fiddle to the mtinuing debate on the Constitu anal Planning Committe’s report, 3W being considered chapter by lapter in the light of two other Dcuments —the government’s white iper, and a second paper setting out e views of the opposition United arty.

Interest in the debate was height led right at the start by Father John Komis’ announcement of the forma lin of a “nationalist pressure group”, imprising the more radically minded embers of the CPC and drawing its pport from both opposition and ivernment benches. Clearly, it could >se a threat to the Somare govern ent’s already slender majority.

However, the indications are that ost members of the conservatively iented opposition prefer the devil ey know to the devil they don’t low. They may be suspicious of •mare, but they are far more spicious of the radical nationalists.

Be that as it may, there is no doubt at Chief Minister Somare has done ast of the scoring during the first If of the match. The chapters of e CPC report dealt with so far are apters one to four.

Chapter 1, dealing with intro ctory matters and general prin )les, was dealt with by compromise, ic government wanted a short con tution; the CPC was prepared to ncede that it should be “not unduly ig”. On the issue of the con tution’s entrenchment, the govern ;nt conceded that a two-thirds ijority of the House must be obtain in order to amend the constitution, d that two months must elapse ;ween a proposal for a constitutional lendment and its passage through ' House. There will also be pro ion for a full scale review of the nstitution after three years.

To keep the constitution within mageable length, it was agreed that should set out only basic principles,

the details being enacted in a series of “organic” or “constitutional” laws.

The United Party opposition secured agreement to the most important of these laws being enacted before independence, which could have the effect of setting back the date of independence.

Chapter 2 of the report deals with National Goals and Directive Prin ciples, and includes an investment code to control the impact of overseas investment. Here the divergence of view was not in relation to the con tents of the chapter, but as to whether the investment code should or should not be included in the constitution.

Mr Somare wanted it to be in sub sidiary legislation; Father Momis wanted it in the constitution, and forced a show-down in which the House supported Mr Somare by 52 votes to 28.

Chapter 3 deals with the proposed “leadership code” and the Ombuds man Commission to be set up to police it. Here the only difference of opinion was on the question of to whom the code should apply. Mr Somare won the approval of the House for a more restricted list of office holders than that advocated by the CPC.

Chapter 4 deals with one of the thorniest issues in the whole report, that of citizenship. Here again, Mr Somare won a victory for moderation.

The House agreed to the concept of “provisional citizenship” for people who have lived in PNG for eight years or more, but who are not eligible for immediate naturalisation under the CPC’s proposals. It also agreed that automatic citizenship should be available to those with two grandparents born in PNG, instead of, as the CPC had proposed, two indigenous grandparents.

This change will smooth the way to citizenship for a large number of PNG’s mixed-race community.

So that’s the score at half-time; and Continued next page

there are 1 1 more chapters to go!

When the 1974-75 Budget was brought down, the disarming Mr Julius Chan, after describing it as “fair and reasonable”, went on to refer to it as a “Robin Hood Budget”, framed on the principle that most of the government’s needed extra re venue should be provided by those who are best able to pay.

Company tax is increased from 25 per cent to 334 per cent; personal income tax is increased for people earning more than $lO,OOO a year; and the minimum income level carry ing liability to pay tax is raised from $416 to $624 p.a.

There will also be an export tax of 24 per cent on agricultural exports.

This tax is designed to solve a prob lem which has defeated successive colonial treasurers, that of extracting a contribution to national revenue from indigenous cash-crop farmers who are obtaining a substantial in come from their labours,, but who, being illiterate, are unable to keep records for income tax purposes.

Bona-fide indigenous companies and co-operatives are to have a five-year tax holiday to help them get on their feet. On the other hand, “pioneer status” companies, previously exempt from the dividend withholding tax of 15 per cent, will now have to pay it; and Christian missions, charitable bodies and councils will in future have to pay tax on income derived from commercial activities. (The mission reaction to the latter provision has been: “Fair enough, but it means that we shall have to wind down some of our edu£ational and health services now financed from this source, and it will cost the government more to fill the gan so created in these services than it will collect in tax from us.”) The Budget’s principal novelty is a betting tax on olf-course bookmakers and their clients. This will involve legalising an activity which up to the present has been technically illegal, though for years no serious attempt has been made to curb it.

Legalising it will now enable book

makers to operate in the open, wit the result that what in the past h< been mainly an expatriate indulgent may come to rival the card game ( “Lucky” as a means of partir Papuans and New Guineans froi their money, especially as gamblir with cards remains illegal. If th comes about, the social ill-coi sequences may well outweigh tl financial benefits.

Finally, our Minister for Finam has budgeted for a deficit of SlO mi lion. This is generally regarded hei as a device for twisting the Australis Government’s arm for a supplemei tary grant to what is felt by boi government and opposition to be disappointing first slice of the S 5( million cake which we have be( encouraged to expect to receive ov< the next three years.

At half time, the only speech ( the Budget apart from Mr Chan’s ov has come from the oppositior shadow Finance Minister, John Mi dleton. His main criticism was th the Budget placed undue reliance (

the dwindling expatriate sector of the community to carry the burden of ■evenue raising.

He challenged Mr Chan’s predic ;ion that the size of the expatriate community would level out and re nain relatively stable, and offered his )wn prediction that it would continue o decrease by about 5,000 people a 'ear. This rate might be accelerated >y the increased tax burdens proposed >y the Budget, Mr Middleton said.

The shadow minister’s second riticism was on what he called ‘departmental non-performance”, /hich had resulted in last year’s ex icnditure targets not having been net.

Meanwhile there comes the news f the successful conclusion of the Dng drawn-out negotiations between ne Somare government and Bougain ille Copper. The government has jcured a good bargain for PNG. This an hardly fail to strengthen Chief linister Somare’s prestige throughout le country and particularly in ougainville, and so to strengthen his osition vis-a-vis the nationalist pres jre group.

> See Somare gilds his image p 89.