K12.96b deficit Budget handed down
BY JEFFREY ELAPA
Treasurer Patrick Pruaitch yesterday handed down a deficit Budget of K12.96 billion budget.
The budget outlay totaling K12,965.4 million against a revenue envelope of K11,088.8 million. This comprises K9182.2 million in tax revenue, K1045.3 million in grants and K1245.7 million from other sources.
The provinces received the highest budget allocation with the service improvement funds and for the first time budget allocations have been made to the council wards.
The K1 billion less revenue budget will be mainly financed through several taxation measures including alcohol, smoke, fuel, departure tax, unprocessed logs, increased tax components of employer provider provided housing benefits.
Other Minor tax policies to come in effect will be redistributing gross profits of gaming machines to increase government share from 46 percent to 55 percent, the book makers stamp duty tax increase to 55 per cent, departure tax from K30 to K114 and taxes on corporate income tax and dividends and interests.
The Budget is less K1 billion from the supplementary Budget of 2016 at around K13 billion.
Treasury Minister Patrick Pruaitch said the Budget has been framed against a relatively weak global economic environment and effects of El Nino and persistent low commodity prices.
He said the Budget, themed “responsible fiscal consolidation for future growth and development”, was fitting as Papua New Guinea goes into an election year.
He said since taking office the Government borrowed to deliver key transformative infrastructural developments, such as Port Moresby city roads, Lae wharf and the upgrade of airports.
“However, the collapse in mineral prices in 2012 and the plunge in crude oil price at the end of 2014 were both totally unforeseen circumstances. These are challenging times for PNG, but as a responsible Government we have taken tough decisions, and we have made decisions in this Budget to safeguard our economy but also to better position our economy to respond to positive improvements in the global economy,” he said.
The Budget demonstrates the Government decisiveness to move the Government Debt to GDP ratio onto a sustainable path while supporting development over the medium term.
This is reflected through:
- Building the foundation for the future development next year and the need for macroeconomic stability and returning to a balanced budget by 2021
- Continuing to support policy priorities in the education, health, infrastructure, agriculture, tourism and Small and Medium-sized Enterprise sector.
- Facilitating the 2017 General Election and hosting the APEC Leaders’ Summit in 2018.
- Further promoting the efficient and effective implementation of major projects through improved design, scoping, and implementation processes
- Placing more emphasis on monitoring, evaluation and compliance so as to achieve improved development outcomes
- Strengthen efficiency in the public sector
- Focus on strengthening and improving quality of spending particularly a clear handle on escalating public sector wage bill.