Acid test time for Prime Minister James Marape dealing with the national economic downturn- SMEs are feeling the pinch of Covid-19 pandemic


State of Emergency (SoE) controller David Manning issued a press statement late Wednesday evening this week urging private sector organizations not to lay off staff during the SoE which was triggered by the Covid-19 pandemic.

Prime Minister James Marape providing an update to the media with David Manning on his right

His statement headlined “Business houses urged to maintain workers’ terms and conditions” appeared to have been plainly thrust to the mass media subjectively, responding to reactions by concerned staff  and noted by the officials from the Department of Labour and Industrial Relations.

Manning said a report to him from the department on behalf of tripartite parties stated that increasing number of workers are “raising concerns or are being laid off or having their pay cuts.”

“The report stated that some companies have complied but others are yet to comply with State of Emergency directives. The Department of Labour & Industrial Relations is now investigating and advising the companies to comply,” he said in the statement.

“Under the State of Emergency businesses and companies must not lay off or terminate workers because of the COVID-19 situation.”

There must be a rationale exception.

This is a lose statement that fell short to justify sensibly that employers “must not lay off or terminate workers because of the COVID-19 situation.”

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Is there something that the SoE controller and the tripartite parties know that we do not know?

We can only speculate that they know there are reserves somewhere that companies can keep paying staff and remain afloat during these very difficult times when companies are not operating at optimum business pace.

Manning and the officials at the department of labour have to sensibly and thoroughly monitor and evaluate the predicament companies and affected employees are in and possibly treat each one on a case by case basis rather than barking a blanket order.

It is not as easy as their statements.

We got this response from a General Manager of a Resort in Madang reacting to the statement issued by Manning: “How? When there is no business coming in, no money. How can you keep them on when you can’t afford to pay them.”

That in a lay man’s understanding is suffice to infer that the statement is plainly unacceptable to employers, defying the logic of business operations.

This week Business Advantage PNG reported nearly a month into lockdown  and businesses are feeling the pinch of it with many SME’s not having the capital to ride out a sustained loss of turnover.

We know bigger companies are in the same predicament. There are ripple effects in business.

Essentially, companies cannot pay employees without keeping their revenue streams flowing so there is no logic for the controller and labour department to bark like that.

It is a difficult time for businesses, employees and their families.

The government through the SoE controller should approach this sensibly, being sensitive to all concerned parties and be fair to the employer and employee.

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Ultimately we are dealing with people’s lives.

A good start to look at the situation is to discuss with private sector organizations like the chamber of commerce and report to government.

The chamber may give them an insight to the situation and real number crunching to crystalise the severity of business challenges and how the government can assist.

This leads us to the much proclaimed stimulus package of K5.6 billion as announced by Treasurer Ian Ling-Stuckey on  April 2, 2020.

How is that coming so far so that an average affected employee would know.

The stimulus package was to support households, business and the health system.

How can businesses and affected employees benefit from this and that businesses are not barked at insanely to pay and pay but logically they could not.

Papua New Guinea Bankers and Financial Institution Workers Union this week asked the government to explain how this stimulus package will cushion off the very challenging economic times.

President Vere Raga said they have identified that there is no wage subsidy for the private sector unlike the public sector.

He also queried the government to explain if the K250 million to support rural sector and SME and jobs will also cover those employees who were forced to reduce their leave entitlements following the pandemic and SoE.

Briefly there are many questions that the government needs to answer to employers and employees and it is insanity, ordering companies to pay employees for doing nothing over a period without generating any revenue.

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Prime Minister James Marape has to speak clearly to his people explaining how this stimulus package will benefit people and practically operationalise it.

Chamber of Commerce Presidents for Port Moresby Rio Fiocco and Lae’s John Byrne have told Business Advantage that there was more the government could do.

‘We need relief to businesses from some form of taxes like land tax and a reduction in some of the tarriffs for electricity and even water. We would like to see some form of assistance package even it is a waiver of some of the salary and wages taxes or tarrifs, even if it is just for this year or the last three quarters of the year,” said Fiocco.

Byrne had thought the stimulus packages was very Moresby-centric and for Lae, they had to put a business and budget case for what they need in Lae.

There appears to be more than what the controller and the department of labour and industrial relations would consider rationale and this is acid test for Prime Minister James Marape handling the affairs during the Covid-19 pandemic.

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