K1.5bil cut in spending

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TREASURY Minister Ian Ling-Stuckey, pictured, says the Supplementary Budget to be tabled on Thursday will see K1.5 billion in spending cuts.
And he warns Papua New Guineans to brace for even more or higher cuts in Budget 2020.
“In the Supplementary Budget, the Mid-Year Economic and Fiscal Outlook (MYEFO) cuts will amount to K350 million while K1.1 billion were attributed to the Budget’s due diligence check with the International Monetary Fund.
“The cuts will be shared equitably across the Budget.
“Parliamentarians will be asked to approve significant cuts to the district and provincial service improvement Programmes (DSIPs and PSIPs).
“The cuts are 20 per cent or K2 million of the previous K10 million for the PSIPs and DSIPs. The National Executive Council (NEC) has also directed that the starting point will be K400 million in cuts from the Operating Budget and a further K860 million in cuts from the Capital Budget.
“The exact details of these Operating and Capital budget cuts are being discussed by the Ministerial Economic Committee.
“If no action was taken, Papua New Guinea (PNG)’s budget deficit would reach K4.6 billion which will mean every Papua New Guinea is in debt of K515 or more than billion Kina worse than the previous worst Budget deficit.
“PNG has not been living within its means.
“After eight (Peter) O’Neill years of spending well beyond our income, our debt has jumped by 248 per cent per person, breaching the K33 billion national debt ceiling.
“Some hard decisions must be made to plug and cover the very, very deep economic hole dug by the former prime minister (O’Neill).”
Ling-Stuckey said seven economic ministers, including the National Planning and Finance Ministers met on Thursday.
“We meet again on Monday (today) to finalise the recommended cuts to NEC,” he said.
“The NEC will consider the recommendations on Tuesday (tomorrow) and then present the detailed break-up of cuts to Parliament for the Supplementary Budget.
“The Marape Government is concerned with the impacts on domestic and international confidence in PNG.
“These massive cuts will cause significant economic pain for many.
“But the decision to cut this hard is a tough decision but one that is right for PNG’s current economic crisis. Even higher levels of cuts this late in the budget year are not feasible because they would impose too much pain and cause too much damage.
“However, this means that there will need to be further cuts in the Budget 2020 to take another step towards living within our means.
“The economic hole is so deep that the solution was never possible in 100 days. It will take years of hard work.
“So tough decisions now are a major step towards living within our means.
“We will have to mull the required financing of our still very large budget deficit of K3.5 billion.
“So there is still the need to finance a Budget deficit that is nearly double the fake Budget 2019 deficit estimate (of the O’Neill government).”

12 comments

  • Appreciated that gov’t take immersed action despite the economic crises.
    Dear minister, a simple question I’d like to pause before you: have you cut the salaries, packs and priveledges of of parlimentarians? If not, when will you effectively execute that to fullfil the statement made by PMJM to cut pay for parlimentarians?
    Country would appreciate if this such is taken.
    Thank you

  • Good approach, DPM is to seriously look into public servants and sub nationals manpower and do urgent audit and reconcile with DPM’s record. I believed gosh names in the public services also blowing up the budget.

  • The Government should consider reintroduction of the user fee policy for basic services like Health and Education. This will reduce Governments expenditures in this services and pay back the debt that is owing.
    The Government should also make it a must for people to go into small scale Argriculture with cash crops like spice that can bring in money through export.
    People and clans who are faced with land shortage and other natural resources and cannot contribute to the country’s economy should have strict population control .

  • Great Action!!
    Now with other measures, the priority cut on the LIST must be the cut on the salaries, packs and privileges of all parliamentarians.
    Secondly. Cut must be also at Provincial Administrators across the country and Department Heads of the National Government.

  • PM & Treasurery Minister, that’s the way to go. I think you both are HEADING the RIGHT direction, though it’s too tough. On the same token, divert funds into local micro-businesses & vigorously promote SME, that’s where huge income generated through Tax. Also, ban Fee Free scheme for Tertiary students and promote Students Loan Scheme at all levels in the Tertiary Institutions both abroad and within PNG. We should EARN our living, NOT free gift! Thanks PM, more of its kind for better PNG..

  • Suggest for Districts to hold back funds and cut back 80%, release 20%. The accountability lacking is so deep we can’t afford to give crooks more leverage. A big overall of District Admins is overdue from what I can see.

  • Treasurer is taking a proactive approach which has been lacking in the last decade or so. We will feel the effective of this for short-term only but looking forward to a brighter, healthier and wealthier nation in Papua New Guinea.

  • The bulk of the rural population in most places remain unaffected as they have never seen this money work for them. Only those who benefit from largely it will miss it.

  • 20% Pay cut for the Departmental heads and MPs as told by Prime Minister ”MUST” be effected soon via policy development to further promote such move.

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