PRIME Minister Peter O’Neill has highlighted the possibility of developing a petrochemicals industry in his address to Papua New Guinean and Australian business leaders.

Speaking at the Papua New Guinea-Australia Business Forum in Lae on 18 May, Mr O’Neill said the nation was on the cusp of at least three new major resource sector projects being approved, with work to commence within the next 12 to 18 months.

“At the same time as we undertake these new projects we have to have an eye on future opportunities,” he said.

“In particular, we need to look now at the downstream processing of resources and we have to begin that process now.”

Mr O’Neill said PNG was in a prime position to develop a petrochemicals industry in the region.

“We have the resource input to production – we need to upgrade our workforce skills and engage with experienced partners to advance this industry,” he said.

However, he added that other areas of the economy needed to be strengthened, with a focus on developing tourism facilities and agricultural productivity.

“In Papua New Guinea we must also grow our small and medium enterprises (SMEs) sector – this is across many fields and industries.”

To do this, the government had implemented a program which included access to affordable finance, provision of advisory services, training support and the reduction of red tape on approval processes.

“Papua New Guineans can spot a business opportunity and make it work – but often they have been let down by bureaucracy,” he said.

As a part of this, the government had committed to ensuring that its taxation regime was transparent and understandable, Mr O’Neill said.

“We know ongoing reform is needed in this area – we have heard the concerns of business and we are working on the issues you have raised.”

While he acknowledged that a downturn in energy prices had caused some pressure on the national budget, he insisted that it was able to be managed.

“In our national budget, over the next couple of years we will be running planned deficits – particularly as we invest in national infrastructure,” he said.

“These are reducing to achieve budget surplus in 2017-2018.”

The government was also planning reforms to its state owned enterprises (SOEs), with Mr O’Neill saying he would introduce the long-vaunted Kumul Holdings legislation into the next parliament.

The legislation will see the nation’s mining, oil and gas and other interests spun off into three separate companies – Kumul Mining Holdings, Kumul Petroleum Holdings and Kumul Consolidated Holdings, the latter replacing the Independent Public Business Corporation of PNG.

Mr O’Neill pledged that these companies would be commercial assets –free from political interference.

“In the past these SOEs had no real structure for capacity building, and they were often run by people who did not understand the business that they were in,” he said.

“Under this new structure, Kumul entities will have to present financial statements to parliament so that ensures accountability.”