The new cabinet announced by Prime Minister James Marape has many sound choices, according to Paul Barker, Executive Director of the Papua New Guinea Institute of National Affairs. He tells Business Advantage PNG that there is optimism in the business community about the new government. 

Prime Minister James Marape and the new cabinet members. Credit: LOOP

‘The Prime Minister has done a sound job in trying to balance different pressures, incorporate some experience and get people from the different sides and parties,’ says Paul Barker, Executive Director of the PNG Institute of National Affairs in Port Moresby. There are 33 ministers in the new cabinet.

‘Marape has done his best to incorporate some good people and set aside some—although not all—of the controversial figures. 

‘There are some new figures who are coming in with a background of more responsible and accountable management.’ 

Barker points to a ‘similar team’ in the Treasury, Finance and Planning portfolios, although Marape has indicated that he will be ‘very much heading the economic sector’.

‘The Prime Minister is obviously able to work quite well with Charles Abel [the Minister for Finance and Rural Development, formerly the Treasurer], who is experienced and competent.  

‘Richard Maru is back in Planning and Monitoring. Richard can be a bit of a loose cannon but his heart is there. He is in a position to push through the Medium Term Development Plan III (MTDP III), which he helped prepare.’ 

Pressure 

The Institute of National Affairs’ Paul Barker

Barker believes there is a ‘lot of relief’ about the appointment of Kerenga Kua as Minister for Petroleum.

Kua is a former justice secretary, has years of experience as a private sector lawyer and is ‘generally considered to be a reasonably safe pair of hands.’ 

Barker says he is ‘not sure’ that the mining sector is as positive about Johnson Tuke remaining the Minister for Mining, but he believes that Marape will be wanting to oversee the resource sector. 

‘There is pressure to push through reforms. Apart from anything else, the government has been receiving very little in the way of revenue, despite PNG being considered a resource rich economy. 

‘There will be pressure both for the state to secure more revenue from existing and new projects, and to make sure that landowners get benefits that are reasonably upfront, without undue delays.’ 

Barker points to the the Lihir gold mine in the New Ireland Province as an example of the difficulties facing the government. 

‘It is the third biggest gold mine in the world, but in recent times hasn’t been providing much in the way of tax, partly because of the depreciation rules and the level of reinvestment.’

Investment

The Executive Director of the PNG Institute of National Affairs says he does not envisage wholesale changes to the country’s investment rules.  

He believes that the government will try to ‘clamp down’, however, on the ‘level of abuse’ in the micro and small enterprise area. There will also be more oversight of work permits. 

‘We know that there is quite a number of businesses that should be in the formal sector that are not paying GST or group tax, not registering, not paying minimum wages and not complying with various laws. 

‘I think there will be a drive to stop these backhand deals going on. The new government is getting a lot of public support for driving change.  

‘There will be an expectation of a partnership to address corruption—including high level corruption in land deals, contracts and public procurement. 

‘Frankly, that should be a good thing for pretty well everyone. Because the honest companies have been missing out on a lot of public contracts.’ 

Barker believes the new government will enjoy a honeymoon period.  

‘Most business houses and organisations will be feeling pretty positive. 

‘We will see how we go in the next few weeks as the realities strike home.’