A ‘responsible’ 2016 budget

Editorial, Normal
Source:

The National, Wednesday November 4th, 2015

 TREASURER Patrick Pruaitch yesterday handed down a K14.2 billion budget for 2016 that will “continue to build on the foundations of a strong and vibrant economy that will provide improved opportunities and higher living standards for our people”.

It is the O’Neill Government’s fourth budget since taking office in 2012, a reduction of K613 million on the revised 2015 budget. 

The theme of the new money plan is “Supporting Economic Growth through Fiscal Discipline”. 

“The 2016 Budget has been framed amidst a weak global economy, relatively slower economic growth that has been constrained by the current El Nino drought and low commodity prices. 

Despite this, the Government remains committed to ongoing priority expenditure programs that are important for future growth.”

Pruaitch said in his budget speech to Parliament yesterday.

As expected, the treasurer delivered what Prime Minister Peter O’Neill had forecasted on Monday – a budget that would address short-term problems while laying the foundations for a strong economic and social growth.

“Although the 2016 Budget is K613 million lower than the 2015 revised budget, key government priorities are not affected with improved outcomes likely to flow from better management and expenditure controls,” Pruaitch said.

The treasurer revealed that the provinces would get the largest slice of the national cake – K3.66 billion (26 per cent) – followed by Administration sector with K2.54 billion (18 per cent), Health sector with K1.5 billion (11 per cent), Education sector with K1.31 billion (9 per cent), Transport sector with K1.25 billion (8.8 per cent) and Law and Order sector with K1.24 (8.7 per cent).

Major appropriations for the provinces include : DSIP K890 million, PSIP K220 million, LLGSIP K31.4 million, District Support Grants K55.5 million and Special Support Grants K13.3 million.

It is worth noting that the DSIP allocations has been reduced from K15 million to K10 million for each district while LLGs will continue to receive K100,000 next year.

The Administration sector allocations include K80 million for the APEC authority of which K35 million will be for both the national elections and SPEC security preparation. 

Drought/disaster relief programme was allocated K50 million. 

New projects under the Health sector include Angau redevelopment K40.3 million, Port Moresby specialised referral hospital rehabilitation K20 million and PSIP for provincial hospital infrastructure K225 million.

The largest allocation in the Education sector was for tuition fee free education with K602 million.

Allocations for the Transport sector include Highlands Highway K200 million, Lae Nadzab Highway K45 million and National Highways K70 million.

In the Law and Order sector, allocations include Police mobilisation K37.6 million, Defence rebuild programme K22.1 million and Waigani court complex rebilitation K80 million.

There is no doubt the O’Neill Government has made great strides in the past three years through initiatives such as tuition fee free education, investment in quality higher education, free health care, significant infrastructure funding and transfer of funds to sub national governments.

As Pruaitch said: “These appropriations reflect the Government’s commitment for policy priorities and broad-based economic growth. 

“With these appropriations, the onus is on the nation’s political leaders and public servants to ensure efficient service delivery and improved livelihoods for people throughout PNG.”

We agree with the treasurer that the 2016 budget demonstrates the Government’s bold commitment to fiscal discipline amid global and local challenges.

This is reflected through enhanced opportunities for people through an improved investment climate with macroeconomic stability assured with a progressive return to a balanced budget in 2012.

It is also encouraging to note the Government’s complementary policies include the much-anticipated Sovereign Wealth Fund (SWF), which will start receiving revenue in the first quarter of next year.

Pruaitch assured Parliament the SWF had been designed “to provide the highest standards of accountability and good governance”. 

Funding had been allocated for the appointment of an experienced and well-qualified board and secretariat for the SWF.

Interestingly, wage earners have been spared of any new personal tax hikes in the 2016 budget. 

We understand Prime Minister O’Neill made it abundantly clear to the Treasury Department recently that there will be no personal tax increases next year.

Indeed, the O’Neill Government has again put its money where its mouth is and we commend the treasurer for delivering a fiscally responsible 2016 budget.

 

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