PNG LAWMAKER CALLS PRICE HIKES ‘SCANDALOUS’

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By Baeau Tai

PORT MORESBY, Papua New Guinea (The National, Jan. 20) – Papua New Guinea opposition leader Mekere Morauta said yesterday that the "scandalous" price increases announced by the Independent Consumer and Competition Commission are directly related to the government’s high tax policies.

He said prices in supermarkets should be decreasing because the kina has grown stronger.

"Why is the Somare government not passing this benefit onto the consumers?" he asked.

The latest price rises expected soon on some of the common household food items like meat, fish, poultry, rice and flour are a direct result of the two percent import levy announced by the government in the 2004 budget in November last year.

"The government tax policies are unfair and anti-Papua New Guinean. They hit everyone, including the poorest of the poor at a time when people could least afford it," said Sir Mekere in a statement.

"The new taxes, like the Bank Accounts Debit Tax, and increases in existing taxes, showed that the government was uncaring towards ordinary Papua New Guineans and determined to raise revenue because it was incompetent to consider other solutions to public sector financing.

"The full effect of the government’s attack on family incomes has not yet been felt," he said. 

Sir Mekere pointed out that in his budgets for 2001 and 2002 he did not introduce new taxes. 

"For 2001, I exempted about 10,000 of the lowest paid workers from paying any tax at all by increasing the income tax threshold. For 2002, I exempted a further 5,000 by increasing the threshold again," said Sir Mekere.

The Opposition Leader’s attack on the government comes after ICCC’s acting General Manager Thomas Abe announced over the weekend that prices of most basic food items would go up as a result of the two per cent import levy imposed in the 2004 budget.

Mr Abe said most wholesale and retail outlets would have "no choice" but to increase the prices of their products.

He warned that local industries involved in the processing of meat, fish, poultry, rice and flour will soon be seeking ICCC’s approval for price rises.

He said the price hikes are expected soon on some of the most common household food items such as meat, fish, poultry, rice and flour. Prices of Ox & Palm corned beef products manufactured and distributed by Hugo Canning Company Limited increased by 2 per cent effective yesterday.

"At least 90% of raw materials used in the manufacturing of the canned meat are imported from overseas. Prices of local procurements will also increase as some portions of the locally processed products are imported," Mr Abe said. 

Choulai Trading in Badili said last Saturday it had to "put on hold" its order for Ox & Palm corned beef products because they were only made aware of a notice from Hugo Canning to wholesalers about increasing the price of its products by 2 per cent.

The company said: "We cannot avoid it (2% import levy) and will be adjusting the prices, but not just yet." 

Woo Textile Corporation Limited said it would follow the trend and increase its prices because it is in line with the imposition of the 2 per cent import levy. 

However, sales manager Sammy Cheng expressed "disappointment" that every year price of goods and services continue to increase hitting hard the grassroots people, while their salaries remain the same.

Mr Cheng said companies like Woo Textile who employ 99 percent of Papua New Guineans and who imports raw fabric materials should be given consideration by being exempted from paying the 2 per cent import levy because it provides job opportunities for PNG citizens.

January 21, 2004

The National: www.thenational.com.pg/

 

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