Thursday, November 18, 2010

Former bureaucrat queries nil dividends



A FORMER senior bureaucrat has questioned the non-availability of dividends from state-owned enterprises in the budget, The National reports.

The bureaucrat, who observed the budget lock-up on Tuesday, said so much had been invested in these enterprises, controlled by the public enterprises ministry, that it was time to reap the pay-offs in the form of dividends.

He was concerned that “there is an absence in public policy where the government has not stipulated a dividend policy in the fiscal policy and revenue strategy so as to reign in profits and net income from these enterprises”.

“The revenue policy is weakened by the fact that the non-tax revenue is missing out on critical pay-off in dividends from state-owned enterprises,” he added.

“Government has invested a lot from the supplementary budgets of 2007, 2008 and last year and should see the pay-off in improved capacity and efficiency and profits resulting in good dividends.

“There is risk to state revenues when the state trustee – the Independent Public Business Corporation (IPBC) which is managing these enterprises – is withholding dividends that are due to the national government.”

He said key policies in the budget strategy to manage compliance did not feature in the fiscal policy framework.

“This is an important aspect of budget management and fiscal control and discipline that must be featured strongly in the policy because past regimes and experiences have shown that administration of budgets has been weak,” the former departmental head said.

“The budget is passed by an appropriation act which is law and any administration of budget, which deviates from the budget, is breaking the law.”

For a number of years, dividends from state enterprises, under the control of IPBC and the ministry of public enterprises, had declared profits but reinvested those revenue to growing those businesses rather than pay dividend to the government.

Some state enterprises under the control of IPBC included Air Niugini, PNG Ports Corporation, PNG Power and Post PNG.


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