Of Papua New Guinea


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Director's Message


29 OCTOBER 2013

NRI COMMENTARY by Dr Thomas Webster*

Since the delivery of the 2014 Budget on the floor of Parliament on Tuesday 19 November, there seems to be a consensus emerging of expert opinions from discussions and commentaries on the key aspects of the 2014 Budget. They agree that the 2014 Budget is sound, focuses on continuing reforms and priorities as per the 2013 budget and intended to focus on enabling economic growth and stability. There is also a consensus that the key issue now is in the Implementation of the Budget. This was a concern in 2013 and needs some careful and innovative thinking going forward in implementing the 2014 National Budget.

I want to highlight these key areas of consensus being articulated and whilst agreeing in principle, take a different approach by commenting on some areas to take note of and be cautious about so that the intent of the budget are realized.

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Continuing Structural Reforms and Addressing Budget Implementation Constraints

October 2013

By Charles Yala, Osbourne Sanida and Andrew Mako

From the outset, we support the overall thrust of the budget, for 2014, which was handed down in Parliament by the Treasurer, Hon. Don Polye on Tuesday this week because the budget continues on the key reforms from 2013 and continuing to focus on the key MTDP enablers. As far as the analysis of the budget is concerned, there are different dimensions that commentators and analysts can take. After making some general observations, we focus on the structural impediments to successful budget implementation. This is a chronic problem undermining growth and development in this country which this budget is addressing.

2014 budget overview

PNG’s 2014 national budget is another record budget and this government’s second deficit budget in two years (and until 2018, the government plans deficit budgets in the medium term). Total revenue and grants are estimated to increase by 21% from 2013 to K12.7billion, while total expenditure is forecast to rise by 15% from 2013 to K15billion. The 2014 budget deficit is estimated at K2.3billion, which is 5.9% of Gross Domestic Product (GDP). The debt to GDP ratio is within the fiscal framework set by this government, and it will be 35% in 2014, an increase of 5% to the level set in the last decade (30%).

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PNG's Lost Decade? Budget Forum September 2013
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