Consciousness must be raised to alert the nation to the possible dark side of SIPA’s heightened tariffs. At least by highlighting the likely other side of SIPA’s reforms and be offered truthful, rational and factually information, scepticism will be put to rest.
The analysis of the recent increased tariff figures is meeting with apprehensions, even fear.
They fall horrendously far beyond the limit of elasticity of the economy of this country. In the article headed ‘the Downside of SIPA’s Reforms’ (published in edition No. 6080 Monday 18th January 2016), I referred to the difficulty consumers of imported goods will be facing with the newly introduced SIPA’s Tariffs. I also stated that the prices of our exports will be more expensive and may lose their markets overseas.
In SIPA’s web site, CEO claims that he had made comparisons with other pacific ports and found that SI is the lowest tariff base. Yes this may indeed be so but this is relative to the in country economic environment, a mere sub set of the larger Australasia wide business environment.
The good man made the grand entry his time last year hitting the ground running. He may have neglected as trivia the necessity to be grounded thoroughly on the trends, the status quo, and the programmed policy for future advancement that are in place for the country as laid down by her leaders.
He came, he saw and he intends to conquer. In his haste he would not careless to follow the laws of the land and he has gotten away with a lot that others would have been penalised for. He had raised the tariffs in the short twelve months; on the 30th March 2015, on the 20th July 2015 and again on the 1st October 2015. Goodness knows when the next one will be. This is nothing less than atrocious. It is an act of terror against the economy of Solomon Islands. All this, he is doing with an equally outrageously high salary package (higher than the salary Australian pay their Prime Minister).
Along with this he enjoys tax free salary, he lives in a serviced apartment at Heritage Park Hotel, he moves around with Security Guards in tow, he has a chauffeur driven vehicle; he takes overseas trips almost on a monthly bases, etc. It will not be too far off to assume that a major chunk of the takings of one month’s revenue of SIPA are burnt up paying for these employment entitlements.
It would appear that by approving these new tariffs after the CEO’s urging, cabinet had legally ushered this country out of economic viability; deceived and innocently ignorant of the implications. I questioned the competence of the proposers of these increases and the advice. Were the ripple effects properly analysed for affordability of businesses and the masses given serious consideration? There are questions, questions and more questions.
The simple truth could be that Solomon Islands is definitely headed for economic turmoil. A comparative table of Solomon Islands Tariff with Fiji, Melbourne, Auckland and PNG appears below. In the table FIJI is Fiji, MEL is Melbourne in Australia, AKL Auckland in New Zealand and PNG is Papua New Guinea with her 22 International ports. Information in the table is but a partial representation of the proportion of the costs. A detail intricate collection of all the other associated costs will place the figures some magnitude higher.
These countries of comparisons have by far greater and broader base economic environment. Solomon Islands is small, weak and fragile. Citizens of Solomon Islands must not be fooled. There are no secret formulas to explain these madness’s. The new tariffs are simply outrageous. All that these tariffs will do is to polarise earnings to a monopoly SOE called SIPA, which in reality will lead to self-destruction and make come true the law of diminishing return.
Our country must urgently move to rectify the nonsense. Our export commodities are already suffering decline. Copra and cocoa have dwindled their export tonnages in recent years. Palm Oil had suffered expensive demur-rages of up to a quarter million dollars recently. This gnawed at their turn over and will potentially frustrate augmentative development prospects, even kill them.
Bulk fuel had already suffered 25% loss of the price advantage Oil Companies enjoyed in the brief period of eighteen months previously. It was the cumulative effects of these that had manifested themselves in the construction boom we have been enjoying in recent times. Fuel was the raw material energising these endeavours.
We have been taken down the path of uncertainty but also possible doom. This is not the proverbial ‘darkest before the dawn’. It is simply all murky and grey, bleak!
By William Barile
Former CEO SIPA