Walkley Award winning Sydney Morning Herald journalist- John Garnaut, was given an order to leave Papua New Guinea (PNG). The directive was given by the Prime Minister of PNG – Hon. Peter O’Neill, two days ago.

His forced departure comes amidst an International investigation into off-shore ‘money laundering’ involving high level officials from Australia and Papua New Guinea. Coupled with the economic rumours which suggest PNG is on the brink of a crippling financial crisis.

Mr Garnaut, co-wrote an article promoting the SBS episode on Dateline which sparked the inquiry. Dateline was provided secret footage filmed by anti-corruption NGO Global Witness.

John Garnaut’s father Ross Garnaut, was banned from PNG by Mr O’ Neill in 2012. After he voiced his opinion over the BHP – Ok Tedi mine trust.

Today- John Garnaut, told the SMH, “It’s true that my old man has maintained a deep commitment to PNG over forty years,” Mr Garnaut said.

Mr Garnaut, wrote articles uncovering the financial situation PNG now faces, comparing the country with Greece, which has no direct bearing on the current investigations. These articles uncover the truth, and do not have the legal capacity to hamper justice arising from contempt and sub judice, as they fall with-in public interest.

Mr O’Neill, explained beyond any legal proceedings, the allegations on the SBS story feed into an ‘old’ stereotypical view of Papua New Guinea-developed after Independence. For decades Papua New Guinea suffered at the hands of foreign and local people, there are now checks and balances to prevent this practice.

Mr O’ Neill, is confident international law enforcement can harness the needed resources and digital tools to detect the alleged illicit financial activities. “We are part of a global legal and economic system where illegal practices of the past can be identified and dealt with.” He said.

The Dateline episode in question, looked into previous transactions which showed a loop-hole ‘does’ exist. Papua New Guinea lawyer – Harvey Maladina, was covertly taped on the footage he explains, “money remains completely undetected, “we use law firms, produce inflated invoices to conceal the movements of corrupt money. They don’t usually question that because it’s – especially if it’s a firm that I’m based with, it’s a prestigious firm …,” he said.

Mr Maladina’s law firm partner is Mr Greg Sheppard, who was the former 2014 “resident” director of Wilsons Security- for Manus and Nauru island detention centres.

During the show- Mr Sheppard, turns to the camera and emphasises the “only way” to bribe foreign politicians and avoid getting caught is to pay “small dribs and drabs” disguised as commercial transactions, he said.

Despite the footage being leaked and aired on SBS-Mr Maladina said: “These allegations are not true. It is thought to be a last minute scramble to ship funds offshore as PNG hits a massive economic down turn-similar to Greece.

There are also rumours the politicians are buying up the PNG media to gain a foothold and curtail press freedom during a major recession.

PNG law stipulates capital debt must be less than 35 per cent. “Today our debt to GDP ration runs at around 33 per cent of GDP, so is below the Financial Responsibilities Act requirement,” Mr O’Neill said.

Although there are ballpark figures relating to prospective rises of 41.3 per cent of GDP the PNG PM points out, “Around 60 per cent of debt is domestic; PNG is unlike so many countries around the world, that are terribly exposed,” Mr O’Neill said

Mr O’Neill, re-emphasises- PNG are confronting global challenges-education, law and order and infrastructure would be exempt from cuts.

“The facts are that the recent publication by the Bank of PNG indicates that the economy is stable and we are confronting global challenges,” Mr O’Neill said.

However, at a glance below the current PNG economy appears rather differently-

  • Growth forecast: 11 per cent, down from 15.5 per cent in 2015 budget
  • Inflation forecast: 4.9 per cent, down from 5.5 per cent
  • Debt to GDP ratio in June: 33.5 per cent
  • Debt to GDP could rise to 41.3 per cent on current trend
  • Revenue and grants: 11,381 million Papua New Guinean Kinas ($5.5 billion) down from 13,927 million Papua New Guinean Kinas ($6.7 billion)

Source: MYEFO, PNG Department of Treasury

Today Mr Garnaut, told the SMH-“It sounds like Paul Flanagan’s careful economic analysis has touched the rawest of political nerves: How does the PNG patronage system work after the money has run out? At the very least, Mr O’Neill has opened a debate that Australia needs to have.” Mr Garnaut said.

Mr O’Neill, sought information from the Australian Foreign Minister Julie Bishop, regarding the new aid program in April. The program is designed to work closely with the private sector “we need to see the details,” he said.

Nick McKenzie, Richard Baker, John Garnaut Read more:
Follow us: @smh on Twitter | sydneymorningherald on Facebook 28/06/15


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