By REBECCA KUKU
THE Government plans to review the 2020 Budget as an immediate measure towards the Covid-19 strain on world economies, including Papua New Guinea.
Prime Minister James Marape, in a press statement released last week, said the Government was putting in immediate fiscal measures that would include; a review of all tax and non-tax revenue projections, reprioritisation of expenditure for key and essential functions including health, education, law and order and the public investment programme (PIP) and immediate cessation of all non-essential expenditure (conferences, vehicle purchases, overseas travel, etc).
Marape said that they would also review PIP to consolidate funding for existing contract-based projects along with counterpart funding support and defer some projects, including the continued rollout of the NID (national identification) and the National Census until 2021.
“We are rescheduling loan repayments, including the conversion of Government Treasury Bills to inscribed bonds and will reach out to our key bilateral and multilateral partners, including other friendly private sector firms to source new value-based financing, to enable retirement of expensive debt and financing of the budget,” he said.
Marape said the Government was also looking into monetary policies that would include a review of cash reserve requirements to increase total liquidity and also a review of the kina facility rate (KFR) to cushion upward pressure on interest rates.
“We will also review foreign exchange regulations to shorten the holding exports receipts off shore to no more than three months, and for surpluses to be brought into the country immediately and apply stringent foreign exchange controls over currency trading by banks to prevent overpricing of currencies.”
Marape said the Government was aware of the economic impact of the pandemic and would do all it could to help citizens through sound policies and incentives.
“Through policies and incentives, your Government will give a helping hand to our citizens, our small to medium enterprises as well as corporate businesses and our State-owned enterprises,” he said.
“For instance, we are looking at working with the Central Bank and commercial banks as well as non-banking lenders to defer loan repayments by three months or more for those citizens and businesses with loans.
“We are also working to put to use our business stimulus fund, budgeted in the 2020 Budget.
“It will be used as security in our partnership with commercial banks to lower interest rates of business borrowings.
“Further, we will be asking our two superfunds to look at advancing contributors some funds to employees who have been laid off or given leave of absence as a result of the Covid-19 state of emergency 14-day lockdown.”
Marape acknowledged all multilateral and bilateral partners who were coming in to help PNG during the health and economic crisis.