Budget to be balanced

National, Normal

THE national budget, to be handed down today, is expected to be balanced with total expenditure matching revenue and grants at about K5,959 million.
Total recurrent expenditure is estimated at K4,050 million while development expenditure K1,908.4 million.
These were the figures that were in the budget strategy paper approved by Cabinet.
Today’s final figures may change.
Sources of revenue are less certain and contingent upon approval of the LNG project next month for construction to begin next year.
While direct contributions in the form of taxes and dividends are not expected from PNG LNG should approval be given and from expanded operations on Lihir gold and from Ramu nickel, indirect benefits from business spin-offs in LNG is expected to contribute K200 million next year.
This compares with Government expenditure commitments for infrastructure alone in the LNG project of about K600 million.
Other priority expenditures which will need to be budgeted in 2010 are:
* Universal basic education;
* The national road network (transport);
* Basic health; and 
* The public sector.
The Government is negotiating presently with the Australian government under the PNG-Australia partnership for development programme to consider funding these critical areas.
As the identified projects are also priorities under the Millennium Development Goal which Australia and PNG are signatories to, Australia is required by goal eight of the MDG to assist as a developed partner.
The Government is also required to negotiate new industrial awards with Public Employees Association and other public sector unions next year which will take a large chunk of the recurrent bill.
It expects to fully pay its K8.4 million State’s superannuation contribution for its employees as well as to repay outstanding commitments.
Goods and services for all provinces and local level governments is K1,538.9 million.
In order to meet these expenditure pressures at a time of falling commodity prices and global financial crisis, the Government is certain to do away with one-off expenditures experienced in the periods of commodity boom such as the district service improvement programme (DSIP), the provincial roads programme, the Waigani Office redevelopment, payments to the Civil Aviation Authority and a capital injection to Air Niugini.
This is aimed at saving the Government K600 million.
In place of the DSIP which gave MPs a pivotal role in the distribution and use of funds in the districts, the Government is redirecting the much abused K100 million rehabilitation of education services infrastructure (RESI) funds from Waigani to the districts as well as the National Agriculture allocation of some K200 million.
It is expected they will be delivered in the same manner to keep MPs happy.