Treasury says deficit rises to 9.4% of GDP, foreign advisers ban, and Parliament passes Sovereign Wealth Fund bill. Your weekly digest of the latest business news.

PNG Treasury says the 2015 deficit is expected to be K4.81 billion or 9.4 per cent of GDP, ‘which is an increase of K2.54 billion, compared to the initial deficit of  K2.27 billion or 4.4 per cent of GDP at the time of the 2015  Budget’.

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Prime Minister, Peter O’Neill has announced a ban from 1 January next year on all foreign advisers working for his government, saying they make local staff lazy, and they could be spying. He told Parliament the ban includes the 70-odd Australian Federal Police officers working to improve PNG’s law and order situation. He later said there was a need for a better way to use aid money:

‘Development assistance has become a billion dollar industry where so much of the goodwill ends up in the pockets of middlemen and expensive consultants.’

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PNG’s Parliament. Credit: ABC

The Sovereign Wealth Fund (SWF) Bill has passed by 76-4 in Parliament. The Bill means that all revenue from the mineral and petroleum resources can be saved for the future generations (savings fund) and also have a certain percentage deposited into a stabilisation fund, as a cushion against fluctuating world commodity prices.

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Industry Minister Richard Maru has told Parliament a list of reserve businesses restricted only for Papua New Guineans is ready for Government approval. He said if the policy is approved, amendments will be made to the IPA Act to bring back reserve businesses.

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The State-owned National Development Bank does not have money to carry on with delivery of its SME loan services, managing director Moses Liu says. He says the government has delivered only K140 million of the K300 million it had promised.

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PNG Power’s John Mangos

PNG Power employees have accepted the offer of a 20% pay rise, according to the Energy Workers Association General Secretary, Santee Margis. Meanwhile, PPL Executive Director John Mangos says he will be acting as both CEO and Executive Director of PNG Power, following the suspension of John Tangit from his role as CEO.

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Crater Gold Ltd has reported that bonanza gold grades have been returned during the ongoing development of the High Grade Zone underground project in Crater Mountain in Eastern Highlands Province.

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Airlines PNG has no plans to operate to overseas destinations at present after stopping its international services two years ago, Chief Commercial Officer Paul Abbot says, despite being invited to fly into Samoa.

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Total SA has formally become the operator of the Papua LNG project, in which it is in joint venture with InterOil and Oil Search. InterOil will provide technical services for the oil and gas major until the end of the year.

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Mendi-to-Kandep road under construction. Credit kandepmyhome.blogspot.com

The K166 Million Mendi-to-Kandep Road is complete and will be handed to the National Government soon. Chinese-owned Covec (PNG) Ltd built the 50-kilometre road, which effectively connects Kandep in Enga Province to the Highlands Highway via Mendi in South Highlands Province.

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The Fiji Government has granted PNG’s Mineral Resources Development Company a 10-year tax holiday investment for the Pearl South Pacific Resort, which will re-open on 12 September.

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A strong balance sheet has prompted New Guinea Energy to commence buying back 10 per cent of its stock.

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The world market price for skipjack tuna has risen by 40 per cent since April, in part due to a slowdown in fishing effort by purse seine vessels.

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And finally, billionaire and one-time richest man of China, Huang Guangyu, has pulled off a special deal to consolidate control of Gome, the electronics retailer he founded in 1987, despite being in jail for nine years for bribery. Analysts say this tale speaks volumes about why investors are losing confidence in China’s stock market.