Government plans mini budget

PORT MORESBY – The Papua New Guinea Government has indicated that it will bring down a supplementary budget as concerns continued to grow locally and internationally on the true state of the Papua New Guinea economy.

Treasurer Patrick Pruaitch said the government will bring down an Appropriations Reduction Bill, but emphasised that the 2015 National Budget priority areas of education, health, law and order and provincial and district support grants will not be affected.

“In implementing these measures, the government will ensure that the deficit will be lower than the deficit planned in the 2015 Budget, and the debt to GDP ratio will be not greater from that allowed under the Financial Responsibility Act,” he said in a statement Thursday.

“As most observers are aware, the drop in global oil prices has had an effect on gas prices in 2015. This has had an impact on revenues derived from the PNG LNG project. There have also been drops in other commodity prices, including gold and copper, as well as a decrease in taxes collected.”

There have also been drops in other commodity prices including gold and copper as well as a decrease in taxes collected. The partial closure of the Ok Tedi mine in the Western Province, which at one time contributed 5.5 per cent PNG’s GDP, will also add to the country’s fiscal crisis according to observers.

The announcement by Pruaitch comes three days after the Treasury Department-authored 2015 Mid-Year Economic and Fiscal Outlook Report appealed for the need by Government to maintain fiscal discipline though the second half of this year to avoid a budget blowout.

The government will reduce its expenditure Pruaitch said – but it will not be done in a “frivolous manner and detract from the economic growth momentum” achieved under the O’Neill-Dion Government.