By JEFFREY ELAPA
THE government has parked more than K5 billion in treasury bills with commercial banks which has cost the state dearly in steep banking fees, opposition spokesman of finance and economic matters and Lae MP, Bart Philemon told parliament yesterday, The National reports.
He revealed this in questions directed at acting Prime Minister Sam Abal.
Philemon wanted to know why the government had banked revenue earned from high commodity prices with commercial banks rather than with the central bank which offers far lower rates to manage the fund.
He suggested that this practice was in breach of the Public Finances Management Act as well as due processes.
He added that the commercial banks received 5%-6% interest for managing the treasury bills which the central bank has to pay the banks while the interest paid to government was a mere 1%-2%.
Philemon said the central bank might have paid as much as K4 million to the commercial banks for managing the treasury bills.
"This is the biggest scam played by the government," he said.
The former finance and treasury minister said treasury bills should be held with the central bank as the authorised agent for all treasury bills. He said it appeared this established process had been bypassed the responsible departments and their political heads.
Philemon said that it was a poor decision by the ministers and the government to abuse all due financial management processes.
Abal said judgment of the performance of the ministers is the responsibility of the prime minister and it is not something for the parliament to know.
"I will not go into the discussion on the performance of the ministers as it has nothing to do with parliament," he said.
He said that the decisions to park the treasury bills are government policy decisions and directives and it was not done for any personal interest, adding that the government has approved it through the policy guidelines.