Official: Rise in debt level manageable

 DEBT is manageable if growth is strong and retained in the country and generating revenue, Institute of National Affairs executive director Paul Barker says.

He said at present, revenue was tight as profitability in the resource sector was well down.

According to Treasury Department: “With no adjustment to budgeted expenditure in 2015, the fiscal position is expected to be a deficit of K4.81 billion or 9.7 per cent of GDP which is an increase of K2.54 billion compared to the initial deficit of K2.27 billion or 4.4 per cent of GDP at the time of the 2015 Budget.” 

Barker said the country’s debt level has gone above the legal level, but the fact that it (debt) is growing so fast is the challenge. 

“Unfortunately, despite good strategies like the Responsible Sustainable Development Strategy which emphasises the need to diversify the economy away from just the extractives major sectors, notably agriculture, remain underperforming, except oil palm and fresh produce and Government continues to undermine important agricultural activities from coffee, to cocoa and betel nut, with ill-considered and sometimes draconian policies and interventions, which cost ordinary people their livelihoods,” he said.

“It can be resolved but requires openness, public engagement and reapplying much of the reforms and expenditure prudence of the early 2000s which brought PNG back from the economic brink.

“Parliament and the public should have some say or information in what is cut and what is protected. 

“Nothing is more useless than public servants being paid while having all operating funds cut, and big cuts to core functions have short and long term consequences. 

“Cutting core health services, for example, which are already so weak, while ring fencing status projects (like APEC 2018) which provide little if any benefit to ordinary Papua New Guineans (and some costs) would clearly be a misdirected choice.”