Namaliu eyes a mini-budget

PRIME Minister Rabbie Namaliu has conceded it may be necessary to bring down a mini-budget to adjust Papua New Guinea’s economic policy if the Bougainville copper mine remains closed. The government attracted considerable criticism when it brought down its 1990 budget several months ago for basing all projections on the hoped-for resumption of copper production at Bougainville a belief that was widely rejected even at the time.

Now there is extreme cynicism about whether the mine will ever start up again with disorder on the island seemingly out of control.

Namaliu said on a radio interview that it might be necessary to bring down a

“supplementary budget” unless the

Bougainville situation changed. He said that the continuing closure of the mine had forced Finance Minister Paul Pora to make adjustments to the budget prog rammes. Pora is now looking at a range of possible expenditure cuts, the Prime Minister said.

“Mr Pora is looking at a series of mea

sures including a supplementary budget

and cutting down the public service working hours (which I personally do not favour),” Namaliu said. “What we need is greater efficiency.”

The Bougainville security operation

had cost KlB million so far a major

expenditure bite for a government which has suffered a huge income loss from the mine being closed, but also is being pressed to give more financial support to beleaguered coffee and cocoa growers.

The Prime Minister’s comments fol lowed a warning from the governor of the Bank of Papua New Guinea Sir Hen ry Toßobert, that the administration should make major economic policy adjustments to cushion the effects of the prolonged closure of the Bougainville copper mine. The comments were in cluded in the bank’s quarterly review, and the central bank governor said eco nomic events of 1990 would be shaped

by the mine’s future. Timely adjustments

would ensure all sectors (private, public and business) would continue to have confidence in the government’s ability to ensure a stable growth environment.

The bank predicts foreign exchange reserves wi(] decline markedly during the early part of 1990.

Deputy Opposition leader Sir Julius Chan said the government should raise extra funds to get itself out of the finan cial crisis. The opposition favoured sell ing some government shares and priva tising government institutions. Sir Julius also advocates borrowing offshore when the money could be put to productive use and generate revenue. □