Stop being overly generous: Bakani

THE country’s chief banker has warned the national government against making excessive commitments with landowners and to discourage the free handout mentality, The National reports.

Bank of Papua New Guinea governor Loi Bakani also warned yesterday that the government’s previous unsettled commitments were likely to prompt a supplementary budget this year due to the exerted pressure by landowners, especially the liquefied natural gas project area landowners.

Bakani was concerned this might lead to an increase in the government’s total debt.

His warning was contained in the central bank’s Quarterly Economic Bulletin for the March quarter released yesterday.

Bakani said: “While high mineral export prices will lead to higher taxes for the government, the unsettled commitments to various landowners have exerted pressure on the 2010 budget.

“If the revenue is not sufficient to meet these outstanding commitments, the government will have to introduce a supplementary budget with new financing plans.

“The government, through departments that are directly involved in the LNG project, should refrain from making excessive commitments with landowners and avoid free handout mentality,” he said.

Last month, the government moved for a supplementary budget to accommodate landowner commitments but it was not clear whether the budget would be introduced in this month’s Parliament sitting.

Southern Highlands Governor Anderson Agiru said last month there was more than K1.3 billion in claims from landowners for various commitments, including the K120 million seed capital and other memorandum of agreements commitments.

Meanwhile, JP Karai Landowners Association from petroleum development licence (PDL) 1 has welcomed the change in bringing the K60 million seed capital to the project sites for payment.

JPKLA general secretary Thomas Hengebe said:  “We, the majority landowners at home, support the move by Agiru because we fear our money might disappear in Port Moresby into the hands of unidentified city-based landowners.”