Photo credit: Rita Willaert
One of the most important issues that is currently affecting lives of low-income earners in Papua New Guinea is Inflation. This vital issue needs to be seriously addressed and implemented by the new government under the leadership of Prime Minister, James Marape and his Deputy, John Rosso.
Treasurer Ian Ling-Stuckey recently passed the supplementary budget of K610 million to particularly address inflation, this is good as it will ease the burden of workers who are paying tax.
The supplementary budget allowed for the reduction of the current inflation rate from 10 percent to about 6.2 percent which shows a difference of 3.8 percent.
When presenting the budget treasurer Ling-Stuckey said as of June 1, this year (2022) wage earners who are paying tax had received up to an extra K42.30 in their fortnightly pay packets. He highly commended this approach and said it was a significant gain to the household pay-packet of a wage earner.
With the scenario of high-income earners and low-income earners in PNG, this is something that can be seen clearly as a big gap difference between these two groups.
For Instance, when comparing a high earner who earns around K10, 000-K12, 000 per fortnight with a low-income earner who gets about K250-K350, it is quite easy to see that the low earner is really affected by inflation regardless of the incentives put in place by the supplementary budget.
Ling-Stuckey when presenting the budget said the package will cover prices of key household commodities. He added that in April this year the Government announced the arrangement made with the Internal Revenue Commission (IRC) and local companies to lower the cost on key household items and they will be granted an equivalent reduction in tax.
Unfortunately, this measure is waiting to be implemented. IRC however has clarified that the change will require some additional legislation in October to be implemented.
With these measures slowly taking shape, goods and services in stores continue to rise with both basic cost of household food items and fresh produce sold in the local vegetable markets.
Expenses such as Bus fare, rentals, school fees for children and hospital bills are also increasing, putting extra burden on low-income earners in the country.
Ling-Stuckey when presenting the budget said the largest component of the package was removed for taxes on all retail fuel products. Even with these changes, it requires time for Public Motor Vehicles to cut down on additional fees that were charged earlier when fuel prices where high.
Belden Namah recently stressed on the floor of parliament that inflation is real, and he is surprised of the impacts it has on the price of goods and services.
PNG Trade Union Congress when congratulating the newly appointed Minister for Labour and Immigration, Bryan Kramer proposed a full review on the minimum wage board (MWB). Currently the MWB approved rate for a low-income earner is about K3.75 per hour but this rate is yet to be fully implemented by some organizations.
Since the rate is yet to come into effect, the question still lingers on the implementation and the monitoring of this approved minimum wage rate. Are there any penalties charged to those employers who are not implementing these rates?
PNG Trade Union Congress General Secretary, Clemence Kanau during a recent press conference asked if Minister Kramer could seek cabinet approval for the institution and the convention of the Minimum Wage Board to be fully reviewed.
Kanau said the increasing price of goods and services is overpowering the value of a meager kina that a worker earns weekly or fortnightly, it cannot sustain the worker for the next one or two working weeks. As it is now the low-income earners of the country are being greatly affected by this dilemma and left to struggle at will.
Effects of this Inflation is also said to be a global crisis arising from factors such as COVID-19 and the Ukraine-Russian War, but it is not good for PNG as we are struggling economically and have about K160 billion in debts to be repaid.
So, if the Government is serious in taking back PNG and making it the richest black nation, it has to take a bold stance to address inflation and hopefully the reviewing of the Minimum Wage Board (MWB) could also be considered.
