Wednesday, November 19, 2014

Papua New Guinea government releases budget increasing funds for MPs electorates

The Papua New Guinean government has announced its $6.14 billion budget for 2015, with ambitious funding to electorates and a push to reduce deficit.

PNG treasurer Patrick Pruaitch said the budget, an increase by 7 per cent from 2014, identified major revenue sources within the mining, agriculture, and resource sectors.

He said there would be increases in taxes to finance the budget.

Deficit and debt levels including inflation are said to be well under control.

Professor Stephen Howes, the director of ANU's Development Policy Centre, said it was a significant budget for the Pacific nation.

"PNG has been in a very expansionary fiscal mode really for the last decade since the resource boom started," he said.

"But in this budget we see an increase in expenditure but only slightly more than the rate of inflation.

"So it is a very restrained budget."

However, Mr Howes said the one exception were some large increases to "district spending" for building schools and health clinics.

"It sounds good but normally in PNG if funds are allocated to the district that means they are control of the MP," he said.

"PNG has gotten into the practise of putting substantial amounts of funding at the discretion of MPs."

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