Papua New Guinea Parliament Passes $4 Billion Budget

The opposition calls budget 'nothing but a scam'

PORT MORESBY, Papua New Guinea (PNG Post-Courier, ) – The Government has passed the K12.9 billion [US$4 billion] Budget.

This was after the traditional budget reply by the Opposition and debate into late last night and passed 75-0 votes.

Parliament is now adjourned to January 24 next year.

The Opposition has described the 2017 Budget as nothing but a scam.

Opposition Leader Don Polye who stripped the K12.9 billion in the traditional budget reply yesterday said that like the 2015 and 2016 Budget and the corresponding supplementary budgets is a "hoax".

The Bank of PNG reports in the Bank of PNG Monetary Policy Statement that … "PNG continued to experience low export commodity prices during the nine months to September 2016 resulting in low foreign exchange inflows and lower Government revenue, and reduced expenditure on the development budget.

He said the real GDP growth forecast for 2016 by the Treasury Department was revised downwards to 2.2 per cent from its earlier forecast of 4.3 per cent" (Bank of PNG Monetary Statement).

Mr Polye said the Government in its budget books fails to report as to the cause of this receding GDP growth and what it intends to do to fix it, and also failed to report the economic situation in full for better understanding.

He said the Opposition’s calculation therefore is K46.4 billion the GDP size in 2016. The Opposition projects will be K47.328 billion in 2017 at 2 per cent growth.

He said the Government when making serious decisions on commercial loans, borrowings and debt build up on the State or on State Owned Entities try to make some analogy between PNG’s economy and developed economies like US, China and Japan are ridiculous as they have efficient financial systems with larger markets, broader supply bases, more diversified labour skills and employment sectors, and more affluent adaptability to instantaneous changes.

He said the Government states that the debt level will remain at 28.8 per cent to GDP, similar to their 2016 budget, is false.

He said the debt projection in 2016 is K19.745 billion and the BPNG reports in September a K19.784 billion debt and projects a K21.623 billion debt in 2017 without taking into account SOE and off-budget loans (debts).

He said the above figures do not include another most recent expensive commercial loans drawn down from the Credit Suisse first tranche facility of US$200 million.

"Certainly the Debt to GDP ratio is not 28.9 per cent as claimed by the Treasurer and his Government! It stands at over 56 per cent of the country’s economy like reported by the IMF."

Mr Polye also slammed the inflation figures of 6.6 per cent in the budget as deceptive.

He said BPNG revised the 2016 inflation up to around 7 per cent and further projected the 2017 inflation to be 7.5 per cent.

However, Treasury Minister Patrick Pruaitch has condemned the Opposition who sought to twist budget figures as an example of an Opposition that is running on empty.

"There were no substantive points that the Opposition could make to criticise the budget, so they resorted to distraction tactics," the Treasurer said.

"The figures they were attacking are easily explained because the same formula was used in the 2016 budget and budgets before that.

"The figure of K21 billion they cited is comprised of our 2017 expenditure envelope of K13 billion, and standing debt of K8 billion that is comprised of Treasury Bills, Inscribed Stocks and other debt instruments.

"This is the total amount of debt that will be maturing and that we turn over during the 2017 year. It is not an expenditure item that we need to fund.

"This is the way that all Budgets have been put together since we have been in Government and since the time that the Opposition Leader was also Treasurer.

"This separate from sovereign debt and will reach maturity at varying times in the future.

"It would have been very good if the Opposition had come into the Parliament with the intention to debate policy based on fact, instead of using cheap tactics to try and distract the important budget debate."

PNG Post-Courier
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