2017 PNG budget cut by K1.2 billion

The National Government today handed down its money plan for 2017 with a budget of K12. 9 billion, a cut of K1.2 billion from the 2016 amount of K14.2 billion.
The continued fall in commodity prices on the world market coupled with the effects of El-Nino along with the upcoming 2017 general elections and 2018 APEC meet forms the background of the 2017 budget.

Consequently the theme of the budget is, “Responsible Fiscal Consolidation for Future Growth and Development” as the theme suggests a number of expenditure cuts and structural reforms have been
announced with this, while the 2017 budget will maintain the Governments expenditure strategies as reflected in previous budgets.
“The 2017 Budget is set at K12,965.4 million against a revenue envelope of K11,088.8 million. This comprises of K9, 182.2 million in tax revenue, K1045.3 million in grants and K1,245.7 million in other sources of revenue.” said Treasurer Patrick Pruaitch.
Looking at the budget, the government will move the Government Debt to GDP ratio on a sustainable path while supporting development plan over the medium term, with significant taxation measures to support the
governments efforts towards a gradual fiscal consolidation path to maintain macroeconomic stability and support.
“Were looking at taxing exports of unprocessed logs through a progressive export duty not a flat rate we want to go after the sin taxes alcohol, tobacco and gambling now the idea here is not to change people’s behaviour, we go after them because they are in elastic because people will do them, we anticipate that these new measure will bring us close
to K745 million in extra revenue.”
The highest budget expenditure was Provinces receiving K3,605.7 million or 27.8 percent of the budget major applications included PSIP K220 million, DSIP K890 million, LLGSIP K32.2 million and the newly introduced Ward allocation of K661.8million.
Top also in the priority is the country’s health sector remains as one of the government’s priority and continues to get considerable funding allocation in the budget for 2017 Key expenses include free Health Care with an allocation K20million, and medical supply procurement with an allocation of K160million.
For the moment the government continues to provide free education for school age children throughout PNG with a considerable
allocation of funds in the 2017 budget. the education sector received the fourth largest share of K1, 162.5 million and from this
K602 million goes to funding the TFF despite the total allocation being a cut compared to the 2016 budget allocation for the sector.
“I know critics question our ability to manage our own affairs, make our own choices and live with our reality, but this government has
placed its faith in its own people to manage this economy and I am pleased to say that my colleague Economic Ministers and I and our
good staff have repaid that confidence by structuring a very responsible 2017 National Budget for the house to consider and its framing
of economic and fiscal policies remains committed to steering and independent course that is guided by pragmatism and realistic policies.”Concluded Treasurer Pruaitch.

PNGFM/ PNG Today