Economist: PNG 2017 Expenditures Must Be Responsible, Focus On Core Infrastructure Development

Advises against borrowing or diversion of public funds away from core functions of the State to speculative commercial ventures

By Rosalyn Albaniel

PORT MORESBY, Papua New Guinea (PNG Post-Courier, October 28, 2016) – Effective oversight of the 2017 Budget is critical, both at the national and local levels to ensuring that public funds are ultilised effectively in the best interest of the community.

This is the word of counsel from economist and director of the Institute of National Affairs (INA), Paul Barker, as government prepares to deliver the 2017 National Budget.

Mr Barker had reminded that while PNG is relatively resource rich , these resources can be a curse if PNG continues to bank on them in advance with exorbitant expenditure, which would need to be paid through costly international and local borrowings.

“As we should have learnt from the 1990’s commodity prices and revenue derived from them can be volatile and at times very modest, especially when prices are low and concessional investment granted as has been the case with recent projects,” he said.

In the just concluded CIMC National Development Forum in Port Moresby, both the Treasury secretary Dairi Vele and governor of the Bank of PNG Loi Bakani had stated declining government revenues.

They had also stated that this would pose a challenge on Budget financing.

Mr Barker had said borrowing would be inevitable but stressed that this must be for core infrastructure development but that long term concessional loans should be utilised for genuine priority areas that would service the public’s needs, without entailing tied-uncompetitive-overseas contract, with substantial requirements that undermine valued use of PNG employees.

He urged that government also avoid further borrowing or diversion of public funds or quasi public funds away from core functions of the State to speculative commercial ventures.

He had also urged that government work in coordination but not controlling the independent, central bank to facilitate fiscal and monetary stability but also adequate responsiveness to market fundamentals which he said provides signals to agriculture producers when kina prices rise, encourage remittance, foreign exchange and investment flow back into the country.

PNG Post-Courier
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