In bringing down PNG’s national budget for 2021, Treasurer Ian Ling-Stuckey made clear that due to fiscal constraints the document contained no big announcements of new initiatives, with a focus instead on core business.

Already grappling with significant, pre-existing public debt and deficit issues, the PNG economy like others around the world has also felt the brunt of the coronavirus pandemic which is expected to see global growth reduced to -4.4 per cent in 2020.

Mr. Ling-Stuckey said the 2021 budget comes at the most challenging time in the nation’s history. The Asian Development Bank recently approved a US$250 million loan for PNG to help fund the national government’s response to the pandemic which has included health and fiscal stimulus measures. After weathering the storm of COVID-19 the treasurer said the government would be committed to getting deficit under control in future years.

The budget deficit in 2021 is projected to be K6.6 billion with public debt of K48 billion or around 53 per cent of GDP, but the government is optimistic that the economy will grow by more than 10 per cent over each of the next two years and in 2022 the PNG economy would be worth almost K100 billion. This would support government revenue growth of around K18 billion with more than half to come from the non-resources sector, including agriculture, forestry, fishing, construction, retail, food and accommodation. PNG will also continue its reliance on LNG exports.

In terms of core business, the treasurer said the 2021 budget was focused on such areas as health, education, law and justice as well the continued roll out of the Connect PNG Economic Road Transport Infrastructure Development Program.

PNG Connect seeks to deliver a single undivided road network on the PNG mainland and single road highway corridors in the island provinces by 2030, which includes 400 kms of rehabilitation of existing roads in Bougainville and construction of missing links.

The PNG government has committed to provide K100 million annually to support infrastructure spending in Bougainville over the next decade. This includes an allocation of K200 million over the next five years to continue road network upgrade work, with a current focus on the Hagus to Pitono section of the Buka Ring Road as well as the trunk section between Toiminapu, Kieta and Kangu. The roadworks in northern Bougainville are aimed at assisting farmers to transport produce to market and will also enhance access for tourists. In 2021, K12 million has also been earmarked for feeder road and bridge upgrades.

The budget also shows that K4.9 million is to be spent over the next five years on the rehabilitation of the Buka hospital and improvements to lower level health facilities in Bougainville. Existing development funds for Buka hospital are being held in trust and require the establishment of a compliant hospital board for project spending to proceed. Upgrades of the theatre and outpatient areas have been identified as priority needs.

The budget also sees K50 million allocated over five years to strengthen Bougainville governance arrangements and service delivery mechanisms. A priority has been placed on promoting social cohesion, promoting private sector-driven economic growth as well as empowering women and youth through tailored programs. The ABG is also keen to promote the development of SMEs as well as broader innovation. K3 million has been allocated in 2021 for the hosting of the Bougainville Economic and Investment Summit.

Following the independence referendum, Bougainville is also set to benefit from the transfer of revenue-raising powers from PNG in areas, including mining, fisheries, forestry and agriculture. In terms of enhancing law and order on Bougainville there are also imminent plans to recruit up to 100 new police officers