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Pacific Islands Development Program, East-West Center

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PNG Opposition Leader To Question 2013 Budget’s Viability
Belden Namah expected to criticize ‘unrealistic’ allocations

By Isaac Nicholas

PORT MORESBY, Papua New Guinea (PNG Post-Courier, Nov. 27, 2012) – Opposition Leader Belden Namah will take the O’Neill-Dion Government to task tomorrow over the K13 billion [US$6.2 billion] money plan for next year that was handed down by Treasurer Don Polye last Tuesday.

The Opposition is tight-lipped about which areas they will be targeting, but a spokesman said the Opposition is ready to tell the Government and the people that the appropriation is unrealistic and will drive the country into further debt.

A spokesman who requested his name be withheld until the formal reply, said there is more appropriation to the provinces, districts and Local Level Governments, but the revenue to support the government agenda is not there except for a K2.7 billion [US$1.3 billion] deficit which will drive the country into a huge hole by 2017.

He said the Government has all its eggs in the LNG basket, but revenue from that project through corporate tax will start flowing in 2018.

He said the LNG project in 2016 and 2017 will only pay dividends and that is not enough to fill the budget hole and sustain the huge expenditure.

Mr. Namah will pin the Government on the debt to Gross Domestic Product ratio that will simply add to further inflation and the simple people will be digging deeper into their pockets to pay for a packet of rice and tinned fish to make ends meet. Mr. Polye during the handing down of the Budget last Tuesday said the Government debt is expected to increase by 74 percent by 2017. He said the majority of the increase occurs in 2013 and 2014. He said debt to GDP peaks at 34.6 percent in 2014 and then falls to 25.5 percent of GDP by 2017 due to growth in GDP whilst new debt issuance slows from 2015.

Mr. Polye said amendments to the 30 percent debt to GDP limit contained in the Fiscal Responsibility Act 2006 are required to allow for this temporary increase in debt.

Although most critics, business houses and academics have heaped praise on the Budget, Namah will make a detailed statement in his Budget reply today.

Mr. Namah is expected to grill the Government on the US$3 billion blow-out on the LNG cost that will create another hole in the budget.

Shadow Minister for Public Enterprise Tobias Kulang said the silence by the Government is deafening.

"These are major financial burdens we need to deal with and why is the Government so quiet? We need to know where the additional funding is going to be generated from and which sector is going to suffer as a result of this," Mr. Kulang said. Meanwhile, Leader of Government Business and Minister for Finance James Marape said after the Opposition’s reply, Parliament will proceed with debate on the 2012 money plan and pass the Budget.

The Government will also introduce amendments to section 145 of the Constitution proposing extension of the grace period before a vote-of-no- confidence in the Government from 18 months to 30 months, Mr. Marape said.

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