Parliament recently passed its 2021 budget again, following the Supreme Court’s rule that the sitting previously passed was not proper.
According to Treasurer Ian Ling-Stuckey who tabled the budget, working on the budget was a challenge.
“Since 1975, there has never been a global crisis such as the one we are now facing,” he said. “The latest world economic outlook talks of a long and difficult ascent recovering from the Covid-19 pandemic. The global growth rate is expected to be minus 4.4 per cent in 2020.”
Ling-Stuckey added that the economy went in a downward spiral mode for only two years.
“In 2009, following the global financial crisis and the current year,” he said. “And this year’s focus economic drop is minus 4.4 per cent, is more than twice as bad as the minus 1.7 per cent of 2009. While we are slowly recovering from the debt, the deficit, the growth holes PNG is hit with is by far the worst global crisis since our nation’s birth. We need a steady hand on the ship’s rudder to navigate through these extraordinary times.”
Ling-Stuckey noted that for the new initiative in the budget, there would be no huge announcements. “Rather a wise and steady hand consolidating our growth path to begin rebuilding the living standards of our people,” he said.
As for the expenditure, Ling-Stuckey said it is anticipated to arrive at K19.6 billion.
“This is a substantial increase of 9 per cent from the K17 billion 2020 supplementary budget,” he said. “The main sources of expenditure increase are first to fund K600 million in round two of the Covid-19 activities and second to fund increased repayments of arrears. Although there is a large increase in expenditure, it must be seen in the context of responsible policies. We are responding to the Covid-19 pandemic and we are repaying arrears which PNG businesses are saying is the best way to support the economy.”
Arrears payment, meanwhile, is expected total of K1.2 billion in 2021.
“The simplest way to reduce the deficit is not to pay our businesses money that the Government owes,” he said. “Within the expenditure budget, the Government will continue to give priority to health, education, law and justice. We are supporting activities that will build growth through substantial increases in capital investment.”
