Abel explains 2017 budget


Below are excerpts of a summary on the 2017 national budget by CHARLES ABEL, the Minister for National Planning and Implementation

THE 2017 National Budget focuses on the Government’s ongoing priorities and commitments – with the intention to responsibly react to the global fiscal challenges.
The deterioration in the global economic outlook has posed fiscal risks for all countries including PNG.
The fall in global oil prices has forced the Government to adapt a responsible fiscal strategy to accommodate and absorb the downturn in economic activities. Subsequently, this has resulted in revenue decline in PNG’s economy which is heavily reliant on the extractive industry.
The Government through the 2017 budget demonstrates with confidence its responsibility to prudently manage the economy.
The budget is guided by the Debt Management Strategy, Fiscal Responsibility Act 2015 and the PNG Planning and Monitoring Responsibility Act 2016 which aims to rationalise and streamline the planning, budgeting, monitoring and reporting processes in the country.
The Department of National Planning and Monitoring is instrumental in establishing and coordinating the implementation of development plans to strategically guide national development.
The implementation of the national strategy for responsible sustainable development (StaRS) introduces a new paradigm shift to development planning that embraces the Sustainable Development Agenda.
The Government during its formation in 2012 identified development priorities to guide the development of government policies and formulation of national budgets.
The priorities are aimed towards growing the economy and nation building including infrastructure, education, health, law and order, the StaRS related programmes of sustainable forestry, sustainable fishing of tuna, managing the population and preserving the environment.
The overall 2017 capital investment component is retained as in the 2016 budget.
The challenge is to maintain funding within the budget framework that guides investment decisions and complete funding the key priorities of the current Government.
The Department of National Planning and Monitoring administers the capital investment programme to implement the policies, plans and priorities of the Government.
Hence, the Government through the development cooperation policy guides the development partners to align their country strategies and programmes to address the development agendas of PNG.
The capital investment component has nine priority sectors: administration, provinces, transport, utilities, health, education, economic, law and justice and community and culture.
Among the budget priorities, the 2018 Asia Pacific Economic Cooperation (Apec) summit preparation remains a key commitment of the Government.
It includes lead-up meetings in 2016, 2017 and 2018. This will provide opportunities for PNG to showcase its potential for trade and investments and guide policy discussions in areas of development and economic cooperation.
The Government provided K70 million to the Apec authority in 2016 to commence preparations and lead-up meetings. In 2017, Apec related activities cost K250 million.
The 2017 national election is another priority expenditure with an allocation of K400 million.
The Service Improvement Programme continues to be the main intervention programme of Government to empower sub-national governments to deliver reliable goods and services through the national service delivery framework.
In 2017, K1,174.42 million was allocated:
l Provincial Service Improvement Programme (PSIP) – K10 million for each province;
l District Service Improvement Programme (DSIP) – K10 million for each district; and,
l Ward Service Improvement Programme – K10,000 for each ward.
The Government is committed to maintaining its obligations to provinces in LNG-related regions by providing K43 million for the high impact projects.
To restore and invest in the economy of the Autonomous Region of Bougainville, the Government provides K70 million through the Special Intervention Fund and K10 million through the Restoration and Development Grant in 2017.
Major road infrastructure investment increased by 30.5 per cent between 2013 and 2016. The target is to reach 9500km of roads by 2017.
In the 2017 national budget, the sector remains the biggest spender and focuses on ensuring that national priority roads are sealed and in good condition, opening up of missing link roads and building and maintaining bridge infrastructures in key regional centres.
The transport sector is allocated K653.05 million in the 2017 national budget, which comprises K230.70 million in loans, K65.85 million in grants and K346.50 million in direct government financing.
The highlands highway receives an investment funding of K157.0 million which includes the Lae-Nadzab road of K25 million.
Major coastal roads upgrading and sealing are allocated K60               million while missing link roads are allocated K27.5 million.
Allocation for town roads upgrading and sealing is K45m in 2017.
The air and maritime infrastructure and safety standards are also critical areas.
The 2017 capital budget funds allocates K125.80 million to improve national airports and rural airstrips while K24.20 million is allocated to maritime infrastructure and waterways safety programmes.
In the utility sector, K192.60 million has been earmarked to fund capital programmes for electricity/energy and telecommunication.
The Government with support from development partners are working to strengthen and improve the basic services to households and businesses in each service sector.
The ongoing development of electricity grids throughout the country is enhanced through the investments of K101.89 million.
The utility sector has had some achievements between 2012 and 2016 and remains one of the key priority sectors for the Government.
The Government with support from development partners continues to fund the rural telecommunication project with K12 million and the National Broadband Network with K6.5 million in 2017.
The water, sanitation and hygiene sector is also a Government priority.
And as such, with assistance from development partners, has allocated K102.2 million in 2017 to implement and roll out the WASH programmes.
It aims to achieve the indicators outlined in MTDP 2 that relate to the percentage of the population using improved drinking water source, using improved sanitation facilities, health and education institutions having access to safe water and hand washing facilities.
The health sector is a key priority of the Government. Major priorities include the expansion of health service at the community level through the National Service Delivery Framework, expanding regional and specialist hospitals, recruitment and training of medical personnel and making family planning services available and affordable.
The health sector has also had some key achievements between 2012 and 2016 which  include rolling out free primary health and subsidised specialised health care throughout the country, rehabilitation and upgrading of the Port Moresby General Hospital, Angau Memorial Hospital and provincial hospitals throughout the country.
The Government allocated K350.64 million in the 2017 budget.
The education sector is also a key priority of the Government.
The MTDP 2 indicators include improving the net enrolment ratio in primary education from 74 per cent in 2013 to 82 per cent in 2017, number of girls per 100 boys in primary basic education and number of graduates in higher education.
This sector made progress between 2013 and 2017 whereby the tuition fee-free education has been rolled out to all school-aged children in government and semi-government schools, rehabilitation and establishment of university infrastructures in the six universities and the establishment of three new universities. The Government – with assistance from development partners – in the budget allocated K182.52 million to the education sector including the rehabilitation and development of major teachers colleges, nursing, technical and business colleges in the country.
An investment of K61.0 million is allocated to the Higher Education for upgrading of infrastructure in universities across the country.
The economic sector is the key driver of the economy and as such Government with assistance from development partners is investing in the sector to grow the economy by empowering people through agriculture and SME activities.
Government focuses on the StaRS related programmes of sustainable forestry, sustainable fishing of tuna, strengthening production across all major agricultural export commodities, sustaining food security and preserving the environment.
The Government with support from development partners allocated K202.24 million for the sector with SME receiving K30 million, K17.90 million for enhancing tourism development, and K121.49 million for agriculture.
The law and justice sector is a critical enabler for socio-economic and political development.
As per the MTDP 2, the indicator crime rate is expected to decrease from 91 per 1000 population in 2010 to 65 per 1000 population in 2017.
Furthermore, the number of well-trained police officers is expected to increase from 5116 officers in 2014 to 7500 in 2017.
The Government – with the help of development partners – in the budget allocated K172.50 million addressing crime and security issues associated with 2018 Apec meeting and the 2017 national election.
The Government continues its commitment for infrastructure development under this sector with an investment of K123 million of which K80.0 million is allocated to the Waigani Courthouse.
The budget also captures the community and culture sector with an allocation of K170.5 million towards gender, youth, social protection, sports and cultural events.
In conclusion, the budget maintains Government’s commitment to implement its core priorities, while maintaining its fiscal discipline and cushion out the external shocks.
The government is committed to fulfil its development agendas and create better environment for economic empowerment and improve the quality of lives of our people.

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