DEVELOPMENT BUDGET TAKES CENTER STAGE IN PAPUA NEW GUINEA

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PORT MORESBY, Papua New Guinea (November 30, 2000 - The National/PINA Nius Online)---The central pillar for Prime Minister Sir Mekere Morauta's people friendly Papua New Guinea budget is the Development Budget.

The Development Budget for the first time in the country's 25-year history has been allocated over K 1 billion (US$ 345,000,000).

This represents nearly a third of the 2001 budget and is an increase of 10 percent on the expected level of expenditure in 2000 and an increase of 34 percent on the level of expenditure in 1999.

Moreover, for the period 2001-2005, the value of development projects in the Public Investment Program is estimated at K 2.965 billion (US$ 1,022,925,000).

Dubbed as a "people-friendly" budget, it contains the following prominent features:

* For the first time since Independence, the Development Budget has surpassed the K 1 billion (US$ 345,000,000) mark, comprising one third of the total budget excluding debt servicing;

* Five priority sectors including health, education, law and order, primary industry and infrastructure take up over 50 percent of the development budget;

* Least developed areas have been allocated substantial amounts for aid posts, schools, bridges and agriculture;

* There are no new revenue measures; and

* Tax reprieves have been given to low income earners, to parents paying school fees and to gas, oil and mining companies.

Other important features of the budget include:

* Declining budget deficit as a percentage of GDP from 1.4 percent in 2000 to 1.3 per cent in 2001;

* Continuing the structural reform program; and

* Continuing debt reduction and payment of arrears.

The Development Budget comprises of K 390.8 million (US$ 134,826,000) in Government financing and K 135 million (US$ 46,575,000) and K 525.3 million (US$ 181,228,500) in concessional loans and grants.

Sectoral appropriations include economic K 97.85 million (US$ 33,758250), infrastructure K 526.46 million (US$ 181,628,7009), social services K 192 million (US$ 66,240,000), law and order K 42.37 million (US$ 14,617,650), and administration K 192.37 (US$ 66,367,650) totaling over K 1 billion (US$ 345,000,000).

The Government's key initiative within the 2001 Development Budget is the Development Charter program aimed to deliver commitments reached between the National Government and the provincial governors. These are on increased funding for priority areas of health, education and infrastructure and the development of a special assistance package for less developed districts and increased allocations for maintenance.

"This Government is fulfilling its promise to the people, to do all it can, within its financial capacity, to improve basic services and fund them properly," he said.

The World Bank backed Structural Reform Program is a "crucial building block for the delivery of goods and services," Sir Mekere said.

The reforms, begun in the Supplementary Budget of 1999 and continued through the 2000 budget, have been the Government's guide and will lead the nation through 2001 and over the next decade.

For additional reports from The National, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/The National (Papua New Guinea).

Pacific Islands News Association (PINA) Website: http://www.pinanius.org 

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