K5.7b Economic Stimulus Package
As a result of the Covid-19 pandemic, the government has announced a direct budget support component of K5.7 billion economic stimulus package, Treasury Minister Ian Ling-Stuckey said.
He said some parts of the packages have been implemented while others have not, and that has frustrated many people.
Mr Ling-Stuckey said that coming into this year, the economy was already extremely subdued, and Covid-19 exacerbated the financial problems that the country is facing.
He said the government’s response to the Covid-19 challenge is the economic stimulus package which is based on five principles:
PNG-owned and driven package;
It has to be broad and comprehensive;
It has to be smart and forward looking;
It has to be responsible;
Rely and lean on friendly support.
The Treasurer said that based on these principles, the government has announced six measures which are:
To raise an additional K2.5b for a Covid-19 treasury bonds exercise;
To extend K600 million in credit line to support business and individuals in coordination with banks and financial institutions. In this, there were two interventions and they were to reduce the kina facility rate from 5-3 percent, and the second to reduce the cash reserves equipment from 10-7 percent;
To raise K1.5 billion in friend foreign support multilateral partners, the IMF, the World Bank and the ADB, and of course, help from the bilateral partners;
K500 million from existing Superannuation savings from superannuation funds to provide employee access to additional savings. This has not been implemented as it requires legislative amendment, but that will be presented on Wednesday this week;
To release K500 million original (raised to K600 million) on direct budget support; and to
Introduce a supplementary budget if required.
“Of the original K500 million that was increased to K600 million, we broke that up into two sections (K280m and 320m).
“The first K280 million was allocated to the health and security sector, and of this, K60 million was allocated for WASH program to be administered by Provincial Health Authorities and DDAs, K37 million to PHA as a 22 per cent increase of 2020 Budget funding.
“K60 million to police, defence and CS, K70 million to build 10 new border posts, K50 to Department of Foreign Affairs for overseas posts and for repatriation exercises,” he said.
Mr Ling-Stuckey said that K5 million was allocated to churches and city administration as support for food programs for those in need.
He said the second part of the K320 million went to the economic sector for agriculture, household and business sector support.
Of this, K130 million went to districts and provinces for agriculture and food security, K50 million for price support program for agriculture (yet to be implemented), K45.5 m to support rural Small and Medium Enterprises to districts and provinces, K45.5m for additional business stimulus packages for job loss, and K70 million has not yet used. He said the guidelines for the use of funds – although a little late – has been endorsed and issued by the Finance Minister.