Reports by CHARLES MOI, HELEN TARAWA, CLIFFORD FAIPARIK and MIRIAM ZARRIGA
THE Government has allocated K1.2 billion to pay off what it owes businesses as a way to support the economy, Treasurer Ian Ling-Stuckey says.
“We are paying off arrears which businesses are saying is the best way to support the economy,” he said.
“The arrears payments in 2021 are expected to be K1.2 billion. The simplest way to reduce the deficit is to pay businesses money that the Government owes.”
He said the 2021 budget would focus on continued funding for the Covid-19 pandemic.
He told Parliament yesterday that the people and health service work must be assured that funding was forthcoming.
Total expenditure is forecast to be K19.6 billion which is an increase of 9 per cent from the K17.9 million in the 2020 supplementary budget.
“Although there is a large increase in expenditure, this must be seen in the context of very responsible policies. We are responding to the Covid-19 pandemic,” he said.
“Within the expenditure budget we continue to give priority to health, education law and justice.
“In the 2021 budget, this will grow by K1 billion from the 2020 supplementary budget.
“This provides enormous possibilities to fund our Connect PNG initiative which has been allocated K300 million.”
Total revenue is around K13 billion – an increase of K1 billion or 14.4 per cent from the 2020 Supplementary Budget.
The deficit therefore is K6.6bil.
“This is substantially smaller by K750 million relative to our budget situation once our revenues collapsed due to the Covid-19.
“This budget deficit will continue to decline, with a reduction in the deficit of another K1.3bil in 2022.
“PNG’s debt to GDP level is expected to fall in 2021 from the peak of 53.2 per cent in 2020 down to 53.1 per cent,” Ling-Stuckey said.