THE National Government’s plans to spend more money infrastructure, particularly in rural areas next year is laudable, according to chartered accountant Deloitte.
Deloitte’s budget alert summarised the 2010 and previous budgets handed down by Government.
“It has themed this budget exactly the same as last year’s, promoting sustained economic growth by empowering and transforming the rural sector.”
Deloitte said, as always in PNG, the test would be whether the rubber gets to the road.
However, it stated that a worrying feature underlying this budget was the state of playing around the trust accounts that were set up to handle previous years’ windfall revenue from resource taxes.
The alert said the objectives of these trust accounts were to smooth out expenditure flows and provide a buffer when those windfall revenues dried up.
“The drawdown of these funds between Jan1 and Sept 30, 2009, has been a staggering K1,747.3 million.
“Apart from being ‘highly stimulatory’ as the Government puts it, this rate of spending cannot be maintained and its continuance will result in the funds being exhausted within a year.”
The alert said a particularly noteworthy aspect of this was the apparent lack of accountability with
significant chunks of the draw downs being noted as “no financial or project report” had been was provided.