Govt on target with budget plans

BY MARK HAIHUIE
THE government is on track with budget projections despite adverse economic impacts from the Highlands earthquake, says Deputy Prime Minister and Treasurer Charles Abel.
He said the earthquake caused the economic growth rate to be adjusted when presenting the mid-year economic and fiscal outlook report on Friday. “Gross Domestic Product growth projections were initially reduced from 2.4 per cent to negative 1 per cent after the earthquake,” Abel said.
“Due to improved production performance from the mining and petroleum sector and commodity prices, the revised forecast for the 2018 GDP growth is 1 per cent.”
The International Monetary Fund also adjusted its forecasted growth rate to negative 1.1 per cent.
Abel said revenue collections were at 44 per cent and expenditure at 40 per cent of budgeted levels by the middle of this year.
“Because of some of the steps that we have taken on the revenue side, our collections are pretty much on track,” he said.
“We are even expecting to collect about K200 million more than budget estimates.”
Abel said the government was expecting K213.2 million in revenue while also projecting to spend the same amount as extra expenditure in the remainder of the year.
“Of course, on the expenditure side we are continuing to have some issues,” he said.
“We are dealing with some legacy issues in relation to the 2017 and 2018 budgets, and unfortunately things like the 3 per cent increase in the payroll — which we are funding but it was not budgeted for.
“Then we have things like the outstanding superannuation issues that affects expenditure.”
Abel said the bulk of revenue was expected at the later part of the year on the back of improved oil and gas prices, a 30 per cent increase in production for PNG LNG and government’s reforms to revenue collections.