2015 Godzilla EL Nino maybe worse - NASA

THEY are calling it the Godzilla.

An El Nino weather pattern so destructive that it will surpass all previous El Ninos.

And while there is still some debate as to how fierce this event will be, there is one thing experts are sure of — it’s already happening.

Since March scientists and meteorologists have been monitoring sea surface temperatures in the central and eastern Pacific Ocean and in May, agreed the world was in the midst of an El Niño.

But this declaration was a little earlier than usual, (El Ninos normally occur between June and November) prompting Australian authorities to predict back then that this would be an intense event.

A few months on, NASA is now saying the 2015 El Niño has the potential to be the most powerful on record.

And the space agency’s climatologists are claiming the disruptive weather pattern will cause so much rain that it will end the severe drought in California.

“This definitely has the potential of being the Godzilla El Niño,” Bill Patzert, a climatologist with NASA’s Jet Propulsion Laboratory in La Cañada Flintridge told The LA Times.

“Everything now is going to the right way for El Niño. If this lives up to its potential, this thing can bring a lot of floods, mudslides and mayhem.”

According to experts, this year’s event is already on track to be stronger than the El Niño from 1997 which brought heavy rainfall to Southern California during its winter and twice as much snow in the Sierra Nevada.

But it also caused widespread flooding in the region.

In early 1998, the heavy rainfall not only led to flooding but deadly mudslides.

17 people died and more than half a billion dollars worth of damage was caused. Downtown LA received almost a year’s worth of rain in a month, The LA Times reported.

A still of NASA data showing the weather patterns indicating El Niño for 1997. Source: Supplied

A still of NASA data showing the weather patterns indicating El Niño for 2015. Source: Supplied

So what is an El Niño?

It’s a warming of sea surface temperatures in the eastern and central Pacific Ocean that disrupts weather patterns across the Pacific and can cause a corresponding cooling of the ocean in the western Pacific and around Northern Australia

Every few years, the winds shift and the water in the Pacific Ocean gets warmer than usual.

The resulting El Niño changes weather worldwide, mostly affecting the US.

But it can also affect Australia.

Australia experienced one of its worst droughts during a weak El Niño in 2006—07, but the strongest event, the El Niño in 1997—98, only had a modest impact on Australian rainfall.

The last El Niño, five years ago, also triggered monsoons in Southeast Asia, droughts in the Philippines and Ecuador, blizzards in the US, heatwaves in Brazil and killer floods in Mexico.

This current pattern is now being blamed for drought conditions in parts of the Philippines, Indonesia and Australia, just like in 1997-98.

The dry banks of La Plata River in Naranjito in central Puerto Rico which is in severe drought. Experts are predicting this year’s El Niño event could cause more widespread drought in Australia. Source: AP

Will the big one hit?

For this year’s El Niño to truly rival its 1997 counterpart, there still needs to be “a major collapse in trade winds from August to November as we saw in 1997,” Mr Patzert said.

“We’re waiting for the big trade wind collapse. If it does, it could be stronger than 1997. There’s always a possibility these trade winds could surprise us and come back.”

However he also concedes it also might not happen.

Mike Halpert, deputy director of the National Oceanic Atmospheric Administration’s Climate Prediction Centre, said a big El Niño “guarantees nothing”.

“At this point there’s no cause for rejoicing that El Niño is here to save the day,” he added.

California’s state climatologist Michael Anderson told AAP that only half the time when there have been big El Ninos has there been meaningfully heavy rains.

Mr Halpert said California would need three time its normal rainfall to balance out the drought, which he believed was unlikely.

Despite that he also believes this El Niño was on track to be a record-setter because of incredible warmth in the key part of the Pacific in the last three months.

He said the current El Niño is likely to rival those from 1997-1998, 1982-83 and 1972-73 and the NOAA, on a blog, has labelled it the “Bruce Lee” of El Ninos.

NASA believes it will be more powerful than previous events according to its satellite measurements.

And Mr Patzert believes because it is likely to cause mudslides and other mayhem, using Godzilla to describe it was more appropriate.

When will it hit?

According to the experts, they are predicting the El Niño to peak in the late fall (Australian spring) or early winter (Australian summer).

NASA oceanographer Bill Patzert speaks about an El Nino weather system that could strike California. Source: AP

Frost is worst in district, LLG president says

Source: The National,Friday August 14th, 2015

 
By PETER ESOP WARI
THE people of Mendi-Munihu district in Southern Highlands have been severely affected by frost following the long dry weather.
In an emergency meeting yesterday at Mendi town, four Local Level Government presidents led by Upper Mendi LLG president Solomon Timbol, submitted reports of the disaster saying it was the worst in the district.
Lai Valley LLG president Jack Soal, Karintz LLG’s Simon Tolpe, Mendi Urban’s Vincent Manda and Timbol are appealing to the National Disaster and Emergency Centre to help the people.
Vegetables, kaukau tubers, sugar cane, bananas and pandanas have withered. Creeks and rivers have dried up and people are also facing a water shortage.
Timbol said people were calling them from everywhere seeking assistance. “But we (LLG presidents) cannot do anything because we not have funds. It is up to the national, provincial and district disaster and emergency centres to help,” he said.
“It is a real disaster and hundreds of people would soon starve.”
Timbol said it was important that a team from the National Disaster and Emergency Centre visit the area to assess the situation.
Farmer Joe Pila from the Ialibu-Pangia district lost his entire food garden after frost hit the area on Monday night.
He lost 23 hectares of taro and sweet potato plots. He said earnings from his farm had helped him set up a small business including a trade store, kai bar and hire vehicles.
“I have 10 fulltime labourers and I pay them fortnightly,” he said.
“I have a piggery farm, poultry and breed fish apart from the garden crops.”

More health tips

Source:The National, Thursday May 21st, 2015

Making these small changes to your daily life will significantly improve your well-being and put you on the road to better health.
Give up smoking
It is never too late to quit smoking, and there are many benefits to be gained no matter what your age is when you give up.
Using tobacco puts you on a collision course with cancer.
Even if you don’t use tobacco, exposure to secondhand smoke might increase your risk of lung cancer.
Tobacco smoke is made up of thousands of chemicals, and many of them are very harmful.
The poisons in tobacco smoke include:
Carbon monoxide: Fatal in large doses, this poisonous gas, is found in car exhaust fumes. It takes the place of oxygen in your blood, starving your lungs, heart, and other organs of the oxygen they need to function properly.
Tar: This sticky brown substance coats your lungs like soot in a chimney. Tar and smoke irritate your lungs, increasing the amount of mucus in your chest and restricting your breathing.

Long-term smokers are at a higher risk of developing a range of potentially deadly diseases including:
Cancer – Smoking can cause cancer of the lungs, mouth, nose, throat, oesophagus, pancreas, kidney, liver, bladder, bowel, ovary, cervix, bone marrow, and stomach;
Lung diseases – such as chronic obstructive pulmonary disease which includes chronic bronchitis and emphysema;
Heart disease – such as heart attack and stroke; and
Poor blood circulation - in feet and hands, which can lead to pain and, in severe cases, gangrene and amputation.
Quit smoking now and reduce your risk of serious and life-threatening disease.
Tip: If you need help quitting smoking ask your doctor about stop-smoking products and other strategies for quitting.

Reducing stress
Stress is a normal reaction to the ever-increasing demands of life. Unfortunately, long-term stress can cause many complications on your health. Everyone has stress at some point in life. However, if you are stressed often, it puts you at risk for heart disease, depression, and other problems.
Stress that continues without relief can lead to headaches, an upset stomach, high blood pressure, chest pain, problems with sleeping or sex, depression, panic attacks, or other forms of anxiety and worry.
Manage stress with these tips:

• Ask yourself what you can do about the sources of your stress. Think through the pros and cons. Take action where you can;
• keep a positive, realistic attitude. Accept that although you can’t control certain things, you’re in charge of how you respond;
• stand up for yourself in a polite way. Share your feelings, opinions or beliefs, instead of becoming angry, defensive, or passive; and,
• Don’t rely on alcohol, drugs, or food to help against stress.

Remember: If you feel your stress is not manageable or has continued for some time, talk to your doctor.

Get enough sleep
Healthy sleep habits can make a big difference in your quality of life. Sleep is vital for healthy physical, mental and emotional processing.
When we go without sleep or have insufficient sleep, our bodies struggle to perform to their full potential and, as a consequence, we can expect impairments to our next-day physical and mental performance.
Humans, like all animals, need sleep, food, water and oxygen to survive. For humans, sleep is a vital indicator of overall health and well-being.

How much sleep do I need?
Most adults need seven to eight hours of good quality sleep on a regular schedule each night.
Make changes to your routine if you can’t find enough time to sleep.
Important point: It is important that you go to sleep at around the same time every day.
Try to get good quality sleep so you feel rested when you wake up.
Tip: If you often have trouble sleeping – or if you don’t feel well rested after sleeping – talk to your doctor.

Don’t skip breakfast
Breakfast is the most important meal of the day, especially for weight loss seekers.
If you skip it, you’ll get hungry before lunchtime and will potentially start snacking on foods that are high in fat and sugar and low in vitamins.
Eating breakfast can positively impact your energy level, blood sugar level, weight and even your ability to focus and be productive.
After fasting all night, breakfast fuels your body, so you start the day with energy.
Skipping breakfast affect a person’s effectiveness at work or in school.
Studies have shown that:

• Adults who skip breakfast are not as productive at work, are less effective problem-solvers and have less mental clarity compared to people who regularly eat a healthy breakfast; and,
• Children who eat nutritional breakfast tend to have higher grades in school. They have better concentration, alertness, and more energy, and can retain knowledge faster and think more clearly than non-breakfast eaters.

Tip: While a good breakfast is vital, eating a heavy breakfast, one which is high in carbohydrates and fat, may actually do you more harm than good.

Stay connected
Just like a balanced diet and exercise, an active social life is an important part of healthy living.
Studies suggest that people who have good social networks may live longer and better.
It takes effort to stay connected when your life is busy. Sometimes it may feel like it’s just too hard to stay in touch.
But, having a few close, mutually supportive friends can be a key to staying healthy.
These relationships may help you feel supported, stay mentally sharp, reach your goals, develop a more active lifestyle, reduce stress, have better health outcomes, enhance your sense of well-being and happiness, lengthen your lifespan.

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Suspended

Source: The National,Friday August 14th, 2015

 

By CHARLES MOI 

THE National Court has suspended an eight-year jail term it imposed on former National Provident Fund chairman Jimmy Maladina on fraud charges, and placed him on a two-year good behaviour bond.
Deputy Chief Justice Sir Gibbs Salika convicted Maladina in May on one count of conspiracy to defraud the NPF (now Nasfund) of K2.65 million between November 1, 1998, and October 10, 2000, and one count of misappropriation of the superannuation funds between February 26, 1999 and July 30, 1999.
Sir Gibbs imposed a sentence of six years on the first count and eight years on the second count, to be served concurrently.
Sir Gibbs explained in his 28-page ruling that the suspension of the eight-year jail term was because Maladina had repaid more than the K2.65m taken.
He also took into account the long delay to have the matter tried, which denied Maladina’s “constitutional right to a trial within a reasonable time”.
“The State had a primary role to expedite his trial,” Sir Gibb said.
He also noted that Maladina “will no longer be able to practice law ever again”, and “will suffer in that he will have to find other ways to survive”.
Sir Gibbs said a pre-sentence report by current Nasfund chief executive officer Ian Tauritia stated that the organisation had since flourished from K1.24 million to K3.8 billion “making (Maladina’s court) case look stale and of little consequence”.
Maladina made full restitution on July 24 and had sold his assets in Australia worth AUD$500,000 which was paid to National Superannuation Fund (Nasfund).
Sir Gibbs also pointed out that others involved in the fraud were never charged.
“I think the prisoner (Maladina) has learnt a valuable lesson from this case, is not likely to re-offend and is not a danger to society,” Sir Gibbs said.
Maladina, 49, from Mena’ala village in Esa’ala, Milne Bay, elected to remain silent during the proceeding.
A lawyer by profession, he is married and has four children now living and studying in Australia.
The State accused Maladina of conspiring with others to defraud the fund of K2.65 million by fraudulently increasing the construction costs of the NPF tower in Port Moresby.
It also accused Maladina of dishonestly applying to his own use and to the use of others K2.65m belonging to the fund.
The court found that Maladina and others agreed that construction company Kumagai Gumi, contracted to build a tower, to falsely charge an extra K2.65 million as “further accelerated fees” on top of the agreed construction cost of the tower of K50 million.
Maladina used K400,000 of the K2.65 million, according to the court’s assessment of the evidence.
Sir Gibbs said: “The court must continue to send out a stern message to deter those in positions of trust from abusing and manipulating the systems to benefit themselves and their cronies.
“This case calls for a stern punitive and deterrent sentence to serve as a clear warning to trustees and board chairmen looking after superannuation funds that high standards of integrity and honesty are expected from and of them.”

PNG opposition says LNG money handled corruptly

Updated at 5:31 pm today

The leader of the Papua New Guinea Opposition, Don Polye, has accused the Peter O'Neill Government of corruption over the way it handles LNG project money.

The huge liquified natural gas project is now the biggest earner in PNG and has been touted for several years as the economic saviour of the country.

Mr Polye says a huge UBS Bank loan by the Government to buy a slice of Oil Search was not done through Parliament as it should have been.

And he says the O'Neill Government is not channelling the earnings from the project through the public accounts, but through an entity it has created, called the National Petroleum Company PNG or NPCP.

"And funds are channelled there, repaying the loan, as well as being managed in a very untransparent manner, and that is the cry out by the people of this nation, especially by academia, the professional institutions and other bodies at present in Papua New Guinea."

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Topics:   Papua New Guinea

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Tell like it is, Polye tells PM

Source: The National,Wednesday August 12th, 2015

Opposition leader Don Polye yesterday called on Prime Minister Peter O’Neill to tell the truth about the economy of the country, saying economic growth has contracted dramatically in less than a year

Polye, at a press conference, said O’Neill’s statement last week that PNG was economically safe was “very misleading and vague”.

“I do not believe that we should talk down the economy in any way because that destroys investor confidence and gives a wrong perception. 

“While it’s a duty that we uphold as leaders, we have another duty and that is to tell the truth, actual fact about what is happening so that the people are aware of how the management of the economy is going.”

O’Neill last week said the economy was stable and growing at 10 per cent and was forecast to be between 11 to 15 per cent by the end of 2015.

“In 2014 the economy was projected to grow at 21 per cent because of the LNG proceeds coming in. 

“However, because of the downturn in commodity prices, the GDP growth was reversed down to 15 per cent,” Polye said. 

“When the Treasurer gave the first quarter review, economic growth was reversed down to 11 per cent this year.  

“And Treasury has further reversed that to between 9 and 10 per cent.” 

Polye said the Government had failed to listen to warnings by economic institutions and individuals, including him, when he called on the Government to do a early supplementary budget.

ment’s doing included:

• Building semi-standard infrastructure in Port Moresby at excessive contract prices that boosted foreign businesses at the suffering of the local construction industry;
• deliberately pegging the kina against the US and Australian dollars that led to contracting of the export industry; 
• failure to do micro-economic reforms, especially in the State-owned enterprises and financial sectors;
• dismantling of the PNG Sustainable Development that has now led to the closure of the Ok Tedi Mine; and,
• Loss of fiscal discipline by spending exorbitantly outside the budget. Polye said fiscal and cash flow problems had affected foreign reserves. He said O’Neill needed to come out clear on it’s plan on this

Konga sues paper over ‘selfie’

Source:The National,Wednesday August 12th, 2015

 THE executive chairman of the Border Development Authority has filed a defamation suit against The National, the National Executive Council, the State, a reporter and five persons, over a naked selfie which went viral on social media last month.

In his affidavit, Fred Konga claimed that on July 16, an unknown person uploaded on Facebook “an alleged indecent photograph which resembles myself”.

He said that on July 27, Gibson Kemo published an alleged indecent photograph resembling him (Konga) on Facebook and entitled it “Selfie of the year award”. He further said that on July 29:

• Sonja Barry Ramoi published a photograph “purportedly of myself” on her Facebook page known as “PNG News” and entitled it “Naked selfie goes viral”;
• Bonda Panda published another photograph allegedly resembling him in a post to PNG News;
• Johnny Young published an indecent photograph allegedly of Konga sitting at an unknown location;
• Darius August published a photo of Konga, his wife and daughter which “drew negative comments about my family and my career”;
• Isabella Tauri published an alleged indecent photograph purportedly of him with the following comments – “Fred Konga denied the selfie and said it was photoshopped. See here the star of nudity holding a high PNG government office.”

Kemo, Ramoi, Young, August and Tauri have been named as first defendants.

Konga named Clifford Faiparik of The National as second defendant.

He argued that Faiparik did not consult him before writing his articles which referred to a “head of a government agency”.

The first article appeared on July 29. Three more articles appeared subsequently before Konga called a press conference on Aug 6 where he said that the photographs were “reconstructed” to hurt his character and the Border Development Authority.

In his affidavit, filed on Aug 8, Konga said he believed that the Executive Ministerial Appointment committee and the minister responsible for the Border Development Authority had recommended to Cabinet to suspend or terminate his employment over the matter.

He claimed he was never given any opportunity to defend himself. Konga’s counsel is seeking an interim restraining order against the six persons and The National from publishing “any alleged naked photographs taken by the plaintiff of himself”, any articles and comment in connection with the matter pending the court’s decision.

He wants the National Executive Council and the State, named fourth and fifth defendants, be restrained from making any decision on Konga’s position as executive chairman of the authority.

The motion is to be heard by the Waigani National Court on Friday.

2015 Pacific Games_Opening Ceremony in Pictures

Government finances threatened as drought shuts Ok Tedi mine



August 7, 2015 7:00 pm JST

Papua New Guinea

Government finances threatened as drought shuts Ok Tedi mine

MICHAEL FIELD, Contributing writer

Papua New Guinea's largest copper miner, Ok Tedi, has halted operations for the rest of the year due to a prolonged dry spell.

AUCKLAND, New Zealand -- A harsh dry season and plunging commodity prices have forced Papua New Guinea's biggest copper miner to suspend operations, adding to fears of an impending fiscal crisis for the government. State-owned Ok Tedi Mining produces 25% of the country's export revenue, 5.5% of its gross domestic product and about a quarter of government revenue. "There will be a direct hit on the national budget," mining commentator Martyn Namorong told the Nikkei Asian Review.

Compounding the potential impact of the shutdown, a $19 billion liquefied natural gas complex being constructed by ExxonMobil, the U.S. energy group, is not producing the cash flow Papua New Guinea had expected, because of low energy prices

In its Mid-Year Economic and Fiscal Outlook, released on Aug. 3, the government said its estimated budget deficit for 2015 had risen from 4.4% of GDP to 9.4%, which would be the highest in the country's history. Also, the level of public debt is forecast to rise sharply from an earlier estimate of 27.8% of GDP to 41.3%. Both forecasts are higher than comparable levels in the late 1990s, when the country suffered a severe economic crisis.

The government had already reduced its official forecast for GDP growth to 11.3% from 15% for 2015 to reflect lower global energy and commodity prices. However, the Asian Development Bank said in July, before news of the shutdown of Ok Tedi, that growth was likely to slow dramatically. "[The] consensus forecast sees growth further moderating in 2016 (to 5%)," the ADB said.

Ok Tedi announced in late July that it would close for the rest of the year as a "result of the dry weather event," a reference to the drought caused by El Nino -- an intermittent change in Pacific Ocean currents that can cause weather disruptions. The mine suffered the same fate for six months in 1997 (also an El Nino year) under its former Australian owner BHP, now BHP Billiton.

High in the normally rain-soaked Star Mountains, 15km east of the border with Indonesia that bisects the island of New Guinea, Ok Tedi depends on the 1,050km Fly River to move ore out and bring in supplies. Declining water levels in the river were "creating uncertainty with regard to cash inflows necessary to sustain operation," Ok Tedi said.

The company said there was a 20% chance that rainfall would return to normal within the next six months. But Namorong said Ok Tedi has insufficient credit to remain operating while unable to export its concentrate. "If it is not making cash, it cannot operate," he said.

The miner has begun cutting its workforce of 2,245 employees. Work being carried out by thousands of contractors has also been halted, and more than 2,000 children of employees have had to find new schooling. Small landowners and 50,000 people in 120 settlements along the Fly who receive compensation for mine pollution are also affected. Prime Minister Paul O'Neill said in January that a permanent closure would have "horrendous" economic consequences.

Ok Tedi's first-quarter results, published May 4, show that copper and gold production decreased 18% and 26%, respectively, on the year, while the price of copper fell 16% and gold 8%. Gross revenue fell 58% to 291 million kina ($105 million), and the mine posted a loss of 38 million kina, compared with a profit of 280 million kina a year earlier.

Namorong said the plunge in copper prices, which are at a nearly six-year low, has pushed Ok Tedi's revenues below the break-even point. At the end of July, the global market price of copper was $2.40 a pound. Namorong said the company needs a price of between $3 a pound and $3.50 a pound to be viable.

Always controversial Ok Tedi is Papua New Guinea's oldest operating mine and has always been controversial. In the 1980s, BHP attracted substantial international environmental criticism after mine tailings were found to be damaging the Fly River system.

In 2002, BHP Billiton abandoned the site after years of controversy. In return for indemnity against lawsuits for environmental damage, the company handed over its shares, now worth $1.4 billion, to a trust dedicated to local development.

Sean Dorney, an expert on Papua New Guinea at Australia's Lowy Institute for International Policy, a think tank, said the country's then-Prime Minister Mekere Morauta believed that BHP wanted to close the mine. "Ok Tedi kept operating and has been significantly profitable," Dorney said.

When he came to power in 2012, O'Neill claimed the trust was secretly controlled by BHP. The following year, Ok Tedi was nationalized. A legal battle is under way for control of the trust, which is registered in Singapore. In May, the International Center for the Settlement of Investment Disputes declined to hear the trust's claims against the government. A similar legal case is before the High Court of Singapore, which has yet to issue a judgment.

In March, the government appointed Peter Graham, the former head of ExxonMobil's PNG gas project, as Ok Tedi's chief executive, with a brief to refocus the mine on profitable operations in a world of lower-price commodities.

However, this has been stymied by the rainfall problem. "Even Peter Graham can't control the weather," said Dorney. "The O'Neill government has spent up big anticipating huge revenue flows from LNG, but that is not happening, so the Ok Tedi temporary closure is a real problem."

Mining dominates the economic life of Papua New Guinea's 7.3 million people. In July, Enga Province, home to the country's richest resource project, the Porgera gold mine, was declared a tribal fighting zone, affecting mining operations. Porgera is 95% owned by Barrack Gold of Canada, with the Papua New Guinea government owning the rest.

The Lihir gold mine in New Ireland, 900km northeast of Port Moresby, the capital, is struggling. UBS analysts told the Australian Financial Review in July that the mine's owners, Melbourne-based Newcrest Mining, could be gearing up for a write-down of 2.5 billion Australian dollars ($1.8 billion) following lower returns.

China Metallurgical Group, a Chinese state-owned company, is building the Ramu nickel and cobalt mine on the northern coast at Madang. However, the project is opposed by locals due to pollution fears and anger about the use of workers sent in from China.

Trouble abroad, too Indonesia, the Solomon Islands, New Caledonia and Fiji are also suffering mining headaches as a result of the decline in commodities prices, which has tracked falling demand in China's slowing economy.

In Indonesia, the Grasberg copper and gold mine, 500km west of Ok Tedi's mine, is in a dispute with Jakarta over plans by its owner, U.S.-based Freeport McMoRan, to export 575,000 tons of copper concentrate. Indonesia has banned raw copper exports and demands the construction of local smelting facilities instead.

In the Solomon Islands, the Gold Ridge mine on Guadalcanal closed two years ago after flooding. The mine's Australian owners sold it for A$100 to a local group. But the government last month declared Gold Ridge a disaster area, saying that a toxic tailings dam could burst and pollute the area's palm oil-rich plains and lagoon.

Slumping demand has seen investments in bauxite mining in Fiji come largely to an end. Tens of thousands of metric tons of the mineral are being stockpiled, promoting a parliamentary investigation in the wake of landowner complaints.

Prospects are improving in French-run New Caledonia, where nickel mining has been plagued by environmental concerns and land protests. The Brazilian-owned Vale New Caledonia mine is moving into profit, although it continues to suffer extensive vandalism linked to a local independence movement.

Related stories

Praying for rain: Grappling with a bigger, badder El Nino

Peter O'Neill interview: Papua New Guinea leader keen to keep building LNG industry

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Papua New Guinea, hurt by commodities drop, on brink of Greek-style crisis

Date: August 6, 2015 - 12:23AM

 

 

John Garnaut

Asia Pacific editor for Fairfax Media

View more articles from John Garnaut

 

 

 

 

 

 

Prime Minister of Papua New Guinea, Peter O'Neill. Photo: Joosep Martinson

Australia's nearest neighbour could be on the brink of a Greek-style fiscal crisis following one of the most spectacular budget blow-outs in regional history.

The projected budget deficit in Papua New Guinea's has been revised up, hitting 9.4 per cent, which is more than double last year's deficit and getting close to the 12.3 per cent figure which helped tip Greece into meltdown last year.

The commodities price downturn, worsened by poor oversight of the nation's mining industry, has been brutal to Papua New Guinea's budget. Photo: Jon Reid

 

 

 

 

 

 

The budget implosion will come as a shock to leaders in PNG and also Australia, who have consistently played down the impact of corruption and sliding commodity prices.

In December the top adviser to PNG Prime Minister Peter O'Neill accused a former Australian Treasury officer, Paul Flanagan, of "political interference" when he warned that such a crisis could be coming.

Foreign Minister Julie Bishop assured reporters at the time that PNG was about to become the fastest growing economy in Asia, with GDP growth as high as 20 per cent.

"Huge revenues are going to be coming into PNG," she said on December 14.

And PNG has since become Australia's largest aid recipient, overtaking Indonesia, with budget outlays expected to reach $554 million this financial year.

But this week's mid-year budget estimate in PNG admits that the huge rivers of resource revenue have failed to materialise.

Instead, economic indicators have all turned south, with overall government revenue expected to shrink by a whopping 20.7 per cent this calendar year.

"This is a frightening document," said Mr Flanagan, in a fresh analysis which he released on Wednesday, showing that the looming crisis had exceeded even his pessimistic expectations.

The resulting budget deficit "would be the highest in PNG's history", he said, surpassing the figures that pushed PNG into balance of payments and economic crises in the late 1990s.

"In Australia, such a rapid change in the estimated fiscal position would go well beyond being termed 'a budget crisis'," he said.

Economists say PNG could either slash spending on crucial services, risking a humanitarian crisis, or seek a bail-out from international partners.

PNG, like Australia, has been struck by collapsing commodity prices. But the impact of falling prices has been compounded by management problems at major resource projects, particularly the recently-nationalised Ok Tedi copper and gold mine.

And it has been compounded by a series of huge corruption scandals. Many of those scandals are closely connected with Australia, which has been accused of sheltering corrupt officials and turning a blind eye to laundered funds.

Last month Fairfax revealed video footage which showed Australian lawyers coaching clients on how to pay bribes "in dribs and drabs" and launder the proceeds in Australia.

A warrant was issued but not executed for the arrest of the Treasury Secretary Diari Vele on corruption charges recently.

Anti-corruption activists in PNG have claimed that Canberra has been compromised by its reliance on Prime Minister Peter O'Neill and the Manus Island asylum seeker detention centre.

Ms Bishop told Fairfax she would not let Australia become a safe haven for proceeds of corruption in PNG