Besides creating “a transparent, robust legislative framework”, the Australian government has also agreed to co-opt a team of international economists to carry out economic modeling on the impact of the PNG LNG project.
The specially created econometric model would provide the PNG government with a clear picture of the likely development impacts from sectoral spending generated from LNG revenues.
PNG Public Enterprises Minister Arthur Somare said studies by the Department of State Enterprises supported a proposal to place dividends from the National government’s 16.6% equity stake in the PNG LNG Project in an offshore infrastructure fund.
Somare said government equity in the PNG LNG Project, held by Kroton 2, will be used as a purpose-built vehicle to underwrite future infrastructure development programs.
“By creating a significant funding source for infrastructure – LNG dividends to the state could total $US15 billion over 25 years – we will go a long way towards ensuring that the nation’s development goals are met and living standards raised for most people in this country,” he said.
The DSE is proposing that a single governing body, or board of guardians, be set up for the management of sovereign wealth funds.
Somare said the PNG government planned to have revenue from sovereign wealth funds flowing through the national government’s budget and was spent in line with national development plans and the government’s fiscal framework.
Mr Somare told the meeting it was the PNG Government’s intention that revenue from the Sovereign Wealth Funds flowed through the National Government budget and was spent in line with national development plans and the government’s fiscal framework.
“We need a disciplined approach for accountability and transparency. Working with the Australian Government gives us credibility and confidence,” he said.