![]() By: Minister for Treasury “I am very disappointed in a recent statement from Isaac Lupari concerning actions to modernise and strengthen one of PNG’s most important institutions. His claims are simply incorrect. He has also created a serious breach of trust by claiming Governors Bird and Juffa support his arguments. This is just a lie. Lupari has obviously spent too much time too close to his former boss and learnt bad habits about the truth.Like his former boss, he now lies through his teeth” stated the Treasurer, Ian Ling-Stuckey. A few facts: “A key change in the modernising reforms is that PNG has moved towards having a streamlined but strengthened Board deciding monetary policy. Only three other countries still had the Governor as the sole voice. This is not a loss of independence – it is having independence through a collegiate style rather than one person having absolute power. As Governor Bird has stated “I have been critical of the complete lack of oversight of the bank. It has been a one man show for too long. Any important organisation must have robust checks and balances. I believe these amendments now have appropriate checks and balances.”
Governor Juffa has also re-iterated to me today, he is wholly supportive of the reforms. So Lupari should be ashamed of himself. “The risk in the old arrangement was that any Governor could become too close to the Government of the day. The IAG report goes through examples that suggest this may indeed have been the case” stated the Treasurer. “The IAG report discusses BPNG making illegal payments of dividends to support the former Government’s excessive budget deficits from 2011 to 2015, despite the bank being technically bankrupt. This was not independence. Lupari was fully aware but failed to stop it. It all smells of collusion, so typical of the O'Neill era." “The IAG report goes through the massive increase in purchases of government securities by the previous government supported by BPNG under the previous “slack arrangement” from 2014 to 2017 This was the risk of the “Zimbabwe” example used by Isaac Lupari – the unlimited use of the power of the central bank to prop up a government. As stated in the IAG report, “in 2016, 90% of domestic borrowing undertaken by Treasury was from the Central Bank.” This was not independence. “Under the recent reforms, the excesses of the “slack arrangement” are no longer possible because a strict, lower limit has been imposed. This strengthens independence. “The reforms were good reforms for PNG. Building on the 2000 reforms, they have the potential to be transformative. Parliament recognised this when it unanimously passed the legislation. For critics, please read at least the introduction and executive summary of the IAG report. Good public policy is based on informed public debate, not ignorance, and certainly not on lies and misrepresentations of the positions of respected Governors” stated the Treasurer. Next : PNG Central Bank Act Amendments A Big Mistake, Says Lupari Comments are closed.
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