Record development budget totals K3.4bil

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THE Government has compiled a “record” K3.4 billion development budget to pursue its ambitious development priorities next year.
This is a 24% increase from this year’s K2.5 billion development allocation.
Finance and Treasury Minister Patrick Pruaitch said that the reason for the concerted increase in development spending was to improve “crucial infrastructure” in the hope that it would enhance future economic growth potential.
“It is envisaged the development budget will transform the rural economy and promote sustained economic growth,” Mr Pruaitch said during the budget lock-up yesterday.
The major piece of the development pie of K220 million was injected to improve national and rural roads infrastructure.
Other major expenditure programmes are national investments (K191 million), umbrella Benefits Sharing Agreement (K180 million), district services improvement programme (K178 million), national agriculture development programme (K109 million), 2010 National Census (K66 million) and the treasury roll-out programme (K40 million).
Also under major expenditure programmes, Air Niugini will get K30 million to procure new aircraft, K30 million will go towards settling former provincial assembly members’ outstanding entitlements, K20 million for the provincial services improvement programme and K20 million for community colleges.
Other high priority development expenditures total K94 million.
The Government has also funded other high priority expenditures programmes.
They include coastal vessels (K50 million), rural electricity (K40 million), rural roads (K40 million), large plantation rehabilitation (K26 million), fight against cocoa pod borer (K20 million), social development initiative (K5 million) and land reform (K5 million).
“These allocations are a substantive increase from previous development budgets,” National Planning secretary Joseph Lelang said.
The increase is highly due to the increase in direct financing from the Government and from concessional loans and donor grants.
In particular, the Government’s direct financing has increased by 21.7% from K1.4 billion this year to K1.7 billion next year.
This implies that the Governments’ direct financing makes up 52.2% of the total development budget.
Donor grants (K1.3 billion), concessional loans (K268 million) and the infrastructure tax credit scheme (K60 million) make up the balance of the development budget.
The Government is mindful that the expenditure will need to be closely monitored in 2010 and, if the need arises, adjustments will be done to reflect economic circumstances.
Minister for National Planning and District Improvement Paul Tiensten reiterated Mr Pruaitch’s and Mr Lelang’s sentiments and said the development budget remained along the same policy direction as 2009.
“This is to promote sustained economic growth by empowering and transforming the rural economy,” he said.
Mr Tiensten said the main target was to achieve high quality investments and programmes that would enhance capacity to improve service delivery.