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Duty on Imported Cars Reduced- What About Building Materials?

One of the main reasons why the Government reduced duty on imported cars was to make vehicles more affordable to Papua New Guineans.  While that gesture is appreciated by some, the majority we feel would

One of the main reasons why the Government reduced duty on imported cars was to make vehicles more affordable to Papua New Guineans.  While that gesture is appreciated by some, the majority we feel would prefer to have received news that duty on building materials had also been reduced by the same percentage or more.  After all, most Papua New Guineans are struggling to have a roof over their had.  Why duty on building materials or other housing related costs were not reduced, we do not know.

 

Here are the main reasons why we think the reduction in duty on imported motor vehicles misses the point:

 

  • Motor vehicles is a luxury not a necessity, housing is.
  • Some roads, particularly in suburbs are in dilapidated conditions that need urgent repair.  This causes greater risk of vehicles breaking down which will result in more visits to the mechanics, more costs.
  • Traffic lights hardly work. Those along Stanley Esplanade haven’t worked for some time now causing or increasing the risks of motor vehicle accidents
  • There is a serious issue on licensing as it is evidently clear based on driver behavior in the city that road rules are either ignored or quite simply drivers do not know the rules at all.
  • More vehicles more pollution.  We’re already dealing with plastic bags and other kinds of pollution.  Expect the air we breathe to be polluted with so many vehicles driving around of which many tend to be unsafe but surprisingly still chug away up the hill.

 

Considering many vehicle owners have a little more money to spend, it does seem that the decision to reduce duty will favor the higher income earners.  As one colleague on twitter mentioned bluntly:

 

We need more affordable housing.  Who is to benefit from less tax on luxury cars

 

There are many more concerns but essentially the above are some of them.

 

Now if we look at housing, this is a very serious issue so it begs disbelief why greater attention was placed on motor vehicles and not housing.

 

Here’s an irony – Papua New Guinea is one of the biggest suppliers of tropical logs to China.  The US and EU, in turn, are China’s largest markets for its plywood and wood furniture exports.  And most of the building materials you see in local hardware stores are imported!

 

Would it not be better to consider setting up a processing plant here.  More jobs and a greater chance of reducing building material prices.

 

There is a misconception held by interested homeowners or renters that real estate agents or landlords charge exorbitantly high.  The prices are certainly high but the truth is, property owners need to cover their costs and a large part of this costs include high costs of building materials and of course high interest rates for those who take out mortgages.

 

To be fair, these are trying time for Papua New Guinea and we can understand that the Government has had to bite the bullet and make tough decisions.  We’re just a little bemused, particularly on the reasoning of affordability of motor vehicles, when the general populous has a far more serious concern on affordability of housing.

 

Hopefully, we can get further insight into why duty on housing or building materials was not treated the same as motor vehicles.

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