Papua New Guinea’s largest business chamber, the Port Moresby Chamber of Commerce & Industry (POMCCI), recently hosted two major breakfast addresses, from PNG Prime Minister Peter O’Neill and ANZ CEO Mike Smith. POMCCI’s Chief Executive David Conn identifies the key messages for the local business community.

POMCCI’s David Conn

We were delighted the Prime Minister accepted our invitation to speak to the Chamber members so early in the year. He was very direct; he had some clear messages for them on where we were going; he took questions.

He was aware of the problems that the Government is going to face with the implementation of the budget for 2013, especially with the huge sums of money—1.9 billion Kina—that will flow down to the districts. But he was determined it had to happen.

Prime Minister O’Neill was, I thought, very complimentary towards the business community. He said it had done good things for Papua New Guinea and the Government appreciated that.

That’s encouraging to businesses generally, but the reality is—and he acknowledged this—that there is a problem with capacity to handle the money at that level of government. The Minister of Finance, James Marape, was there (as was Charles Abel, the Minister for National Planning) and was able to say ‘we’ve got templates, we’re conscious of this issue,’ and that encouraged the business community. This is not sleight of hand; I know from my role in the Finance Audit Committee that they have prepared these templates and there are strict parameters that have to be followed in disbursing monies. They’ve made an election promise to get the money down to the people and they fully intend doing it.

Prime Minister Peter O’Neill addresses the Port Moresby Chamber. Credit: POMCCI

Prime Minister O’Neill was, I thought, very complimentary towards the business community. He said it had done good things for Papua New Guinea and the Government appreciated that.

But he did challenge the business community by saying the Government wants to work with us, and again that’s very encouraging. He alluded to the SME stimulus package for indigenous business which his Government launched the night before the 2013 Budget, and he actually challenged the Chamber’s members: ‘this is something we hope you will assist us with, in terms of training and mentoring.’ It’s not just about giving small business money and financing them at 6.5% interest rates.

This is a pro-business government. O’Neill is a businessman himself and comes from the business community. We understand where this government is coming from, and there is nothing wrong with having a nationalistic agenda. But there are some comments emanating from some areas of government—that overseas businesses in certain areas of the economy might be given a year to divest or move on—that some in the business community would have concerns with if they’re not moderated or qualified.

There’s a natural groundswell in Papua New Guinea at the moment to encourage more participation in small business. We fully understand that. As a Chamber, we have small business training models, we run Business Mentors, and I did respond to the Prime Minister and say we’re more than willing to assist.

Mike Smith’s recent positive remarks on Papua New Guinea were also welcome. For PNG to receive a stamp of approval from ANZ, a AAA-rated bank, is invaluable. These are the guys who are actually involved in financing projects such as the PNG LNG Project.

Smith framed his discussion in terms of the recent Australian White Paper on where Australia sits in the Asian Century. PNG sits very firmly between Australia, the Pacific Region and Asia, he said, and if you take a long-term view out to 2030, the figures are ‘staggering’—you’re talking about a $30 billion budget by that time, and that’s six times what it is in 2013. Clearly, ANZ thinks the Government’s on the right track.

I asked Mike Smith about the PNG Government’s deficit budget, and he answered it like a good banker. Sometimes you’ve got to go into debt, he said; as a banker, we look at it and ask ‘Will they be able to pay it?’ We’ve looked into the future, he said, and you guys are going to be able to pay it back, don’t worry about that.

That got a ringing round of applause.

David Conn is Executive Director of the Port Moresby Chamber of Commerce and Industry