PNG aims to balance budget by 2017

PAPUA New Guinea’s national Budget has been tabled by with total government expenditure projected at K16.1991 billion supported by record revenues of K13.9 billion and new borrowings of K2.3 billion.
PNG aims to balance budget by 2017 PNG aims to balance budget by 2017 PNG aims to balance budget by 2017 PNG aims to balance budget by 2017 PNG aims to balance budget by 2017

The government is targeting a reduction in its expenditure in future years to sustainable delivery levels which combined with an increase in revenue, largely driven by the PNG LNG project, is forecast to bring the budget into balance in 2017.

KPMG noted the 2015 revenue increase of K1.3 billion was largely based on mining and petroleum tax increases of K0.9 billion primarily from the PNG LNG project.

Analysing the Budget, KPMG managing partner Troy Stubbings said: "The increase in revenue from the PNG LNG project will need appropriate management to ensure that the economic benefits are realised and fiscal strengthening continues.

"The development of the sovereign wealth fund (SWF) framework incorporating a budget stabilisation fund into which mining and petroleum tax revenues and dividends are to flow remains a critical priority for government.

"It will be important to ensure that the dividend flow from National Petroleum Company PNG (NPCP) as the designated national gas company for PNG LNG and future projects is sufficient to support future budget initiatives. Of course, PNG remains subject to the volatility of world commodity prices," Stubbings said.

Prime Minister Peter O'Neill said of the Budget tabled by Treasurer Patrick Pruaitch: "The outcome of budget decisions have a direct impact on every man, woman and child in Papua New Guinea.

"For this reason the national government must be careful, disciplined and forward-thinking in each budget that we hand down.

"Spending must reach the people and improve their lives, and revenue must be raised in the modern world economy that continues to evolve and offer both increased challenges and opportunities.

"In recent years, the people of our country have experienced an improvement in health, lifestyle and economic opportunity that has never before been experienced in our country.

"Our government will continue to manage the economic affairs of this nation in a way that that will continue to improve the lives of the men, women and children of Papua New Guinea.

"The Treasurer has commended the 2015 national Budget to the Parliament and the people of the nation."

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