Economy to stabilise at four per cent

THE country’s economic growth is expected to stabilise at four per cent to be driven by the non-resource sector, says Treasury Department secretary Andrew Oaeke.
Speaking during the Budget 2023 press lockup yesterday, Oaeke said that is 0.5 per cent lower than what was projected in this year’s Mid-Year Economic Fiscal Outlook (MYEFO).
“We anticipate the growth to stabilise around there (four per cent) particularly driven by sectors such as agriculture, forestry and the fisheries,” Oaeke said.
“The domestic economy was estimated to grow by 4.6 per cent in 2022, down by 0.1 percentage points.
“This is mainly driven by weaker than expected performance in the Oil and Gas and AFF sectors.
“In 2022, the Oil and Gas sector is estimated to grow modestly by 1.4 per cent compared to the 2.7 per cent estimated at the 2022 MYEFO.
“Low growth in the sector was attributed to a 33.0 per cent decline in Condensate production in 2022, although the shortfall is offset by higher LNG production than its nameplate capacity of 8.3 million tonnes per year.”
Mining and Quarrying sector is estimated to grow strongly by 13.5 per cent in 2022, up from 12.9 per cent at 2022 MYEFO.
Increased gold production from Ok Tedi, Hidden Valley, and Kainantu together offset the slight decline in Ok Tedi’s copper and Ramu Nickel’s cobalt productions.
“Overall, the resource sector is estimated to grow by 4.8 per cent, 0.9 percentage point lower than the 2022 MYEFO estimate.
“Growth in the non-resource sector in 2022 is estimated at 4.5 per cent, 0.1 and 1.2 percentage point higher than the 2022 MYEFO and 2022 Budget, respectively.
“The improved growth outcome reflects increased economic activities in the Business Liaison Sectors (BLS) of the economy, aided by stronger than expected recovery in the private sector and increased election related spending.
“In 2023, the economy is expected to remain resilient at 4.0 per cent, 0.5 percentage point lower than 2022 MYEFO estimate.
“The downgrade was attributed to a significant decline in the Oil and Gas sector (-7.2 per cent) as PNG LNG revised its LNG production down to its nameplate capacity for 2023 and outer years,” Oaeke said.

Economist concerned about allocations

INSTITUTE of National Affairs executive director Paul Barker says there are concerns around how the Budget 2023 allocations will be managed and used by various government agencies and arms of Government.
Commenting after its tabling in Parliament yesterday, he said it was quite an uncertain budget “because we are in uncertain times with the global inflation rates and the prices of all commodities.
“The Government is focusing on priority areas of health, law and order, education and agriculture which is good but there are some concerns about some of the mechanisms,” Barker said.
“Just putting money into these Government institution, but how’s that going to be managed and spent?
“Some of these Government institutions are pretty unaccountable so again a real priority.
“I don’t see it reflected in some of the budget allocations.
“It’s absolutely critical to strengthen one implementation like capital budget implementation but particularly enhance the accountability of that expenditure.
“That applies to the recurrent budget and to the capital budget and that includes at the district level because we know that from past audits a lot of the district expenditure has been highly inflated, very much allocated on a personal preference.
“We need to get those annual audits up to date because the PNG public needs to know.”

Govt planning to hire external auditors for checks, balances

THE Government is looking to hire external auditing companies to perform checks and balances on Government departments, Finance and Planning Minister Rainbo Paita says.
“When we’ve allocated funding in the previous years, we’ve had issues of monitoring and auditing projects or being able to monitor the funding we give to provincial and district departments,” he said.
Paita said the Government would be engaging international firms to audit, monitor and evaluate projects so when funding was awarded to projects, there were clear or tangible results.
“Sometimes there are discrepancies and we have issues with our own departments trying to monitor and audit projects so we want to outsource that function to international firms,” he said.
“We want to outsource that function to companies like KPMG, Deloitte, Price Waterhouse Cooper (PWC), so that when you know that international firms will be auditing your projects, you know that someone external is going to come after you and look at your books whether you’re delivering on the programmes and projects being funded.”
Paita acknowledged the Treasurer for increasing the Public Investment Programme (PIP) budget, as last year there was K8.9 billion, with an increase now of 12 per cent to about K9.7 billion.
“The PIP budget is trying to unlock the potential we have in our country while at the same time not forgetting key priority projects such as health, education, law and order and other components that are being funded,” he said.
“We don’t want to blame former governments but as a government we want to be able to see the landmarks in 2025 when we turn 50,” he added.
Institute of National Affairs executive director Paul Barker, in response, questioned why there was no significant increase to the auditor-general instead, and pointed out that the Government was still behind in implementing the current development budget.