TREASURER, Ian Ling-Stuckey today released the 2020 Final Budget Outcome, which details the Marape government’s fiscal performance for the year.
“The 2020 FBO is a record of the most difficult budget year in our history,” he said.
“It tracks our fight to rebuild the nation from the wreckage of the O’Neill years, and then counter the devastating effects of the coronavirus pandemic.
“It reflects the total commitment of the Marape government to winning the war on Covid-19 – saving the lives of citizens and protecting business, employment and communities by stimulating economic activity.
“It also reflects our fight to keep essential services flowing and the machinery of government working in unprecedented circumstances.
“The 2020 FBO shows that the Marape Government has largely succeeded in its aims and fought off an economic and health catastrophe.”
The FBO records a deficit of K7.3 billion, or 8.9 percent of GDP but still well within the limits set by the Fiscal Responsibility Act and the Government’s medium-term plan. Key expenditures like goods and services were controlled (and brought down from an original budget of K3,885.6 to just K3,103); and the government’s salaries budget while K376.6m over the plan, saw nothing like the blowouts of previous years, like 2018’s K1,044.7m and 2019’s K975.3m.
FBO confirms that initial predictions of a K2.7 billion revenue loss caused by the pandemic were correct, but that emergency measures taken by the government reduced the fall. Revenue of K12.1 billion was achieved, a very creditable increase of 3.6 percent over the latest 2020 estimate.
Compared to 2019, total capital investment increased by K813.5 million, or 13.4 percent, and government capital investment increased by K908.2 million, or 30.3 percent. This meant the government could implement a range of projects to rapidly stimulate the economy, especially in rural areas.
It also meant the Marape government could start repaying huge bills from its suppliers – many of them small PNG businesses –which the O’Neill regime simply refused to pay. K97.6 million was spent on these arrears, which helped soften the impact of the pandemic on the sector.
A feature of 2020 is the rapidity with which the Marape government was able to put together a fighting fund for the country, largely through the generosity of friendly nations such as Australia, New Zealand and Japan, and international partners including the IMF, World Bank and ADB.
Income from cheap external financing from development partners totalled K4.4 billion, with a further K1.4 billion in donor grants. In addition, the Marape Government raised K2.5 billion from a COVID-19 Treasury bond issue, and drew down K1.6 billion in cheap, project loans.
“This financing was instrumental in preserving lives, maintaining economic activity, protecting businesses and livelihoods, and sustaining essential government activities and services,” Mr Ling-Stuckey said. “What the 2020 FBO shows is that Papua New Guinea can overcome the worst of times through responsible planning and implementation and unity and cooperation rather than the divisive and counter-productive policies and politics of the past”.
“The Marape Government is proud to put people first.”
This 2020 FBO report is the joke of the century and coming from by far the lowest performing Treasurer of the poorest preforming government in this country.
1. It’s a tough call when he keeps trying to talk down the past 10 years or so when this country moved fast and he continuous to keep his lips flip flop up and down with the old blame game rhetoric. Alas he cannot for honesty accept some responsibility for mismanaging the economy. Always want to blame somebody, that’s what he is good at!!
2. Mr. Treasurer, how much is your GDP forecast for 2020 to 2021? Obviously not even reaching K10billion because you have no major investment activities, no robust tax and domestic income above the projected budget expenditure, which at face value is around K13.5billion.
3. Mr. Treasurer, how much more loan are looking at borrowing if those foreign friends are kind enough to see you and your government through to 2022? And what have done so far with the loans this government has borrowed offshore? Is not that your government has used up everything under consumption expenditure, a disgraceful and bad leadership in the making.
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