A TOTAL cost of K501 million (K0.5 billion) so far was used for the COVID-19 Direct Action Plan from the K5.7 billion COVID-19 stimulus package, says Treasury Minister Ian Ling-Stuckey.
The treasurer and Member for Kavieng when presenting the COVID-19 budget in Parliament on Friday, August 13 highlighted three main areas where the K5.7 billion was used stating: the money went on protecting the people; protecting the budget; and protecting the economy.
He first spoke on the K501 million direct spending providing a list of payments that have been made as part of the COVID-19 Action Plan.
He said a totalled amount of K214.8 million which makes the largest component of the K501 million expenditure was the direct transfers to the Provincial and District COVID-19 Trust Accounts which was established under the special Finance Instructions No.5 & 8 in 2020.
Of that total cost of K214.8 million: K1 million was spend to every province and district to support Agriculture; K0.5 million (K500,000) was allocate to all provinces and districts in support of the WASH project; K0.5 million (K500,000) for all districts to support SME programs.
The treasurer clarified that the direct budget financing is less than 10% of the total economic stimulus response package and over 90% of this is funded through innovative , flexible mechanism and not just a big government spending of K5.7 billion COVID-19 direct spending as claimed by the Opposition.
He then spoke on the government’s effort in protecting the economy given the trying times and impacts COVID-19 had on the country’s economy.
The treasurer pointed out two largest parts of the government response that were designed to protect the budget.
He said given the trying times of lower exports receipts due to the declining oil prices which resulted in a huge fall in PNG’s national Income from the 2020 budget figure of K92.2 billion down to K81.6 billion. And a sharp drop in revenue intimately estimated at K2.7 billion.
The treasurer in April, 2020 has announced that as part of the government’s stimulus package, they were looking to raise a domestic debt of K2.5 billion and international borrowing of K1.5 billion to make up revenue short falls to support existing expenditure commitments and to fund an additional K0.5 billion of additional expenditure.
He said the K2.5 billion for the bond placement was used as a result stopped the bleeding and had a positive impact on the local finance and superannuation industries and also having the people benefited from the interest rates that has being paid on the financing.
He further highlighted that from the K1.5 billion concessional loans, an amount of K2.8 billion was raised at an interest rate of zero precent (0%).
He concludes his COVID-19 reports stating that the remaining K5.3 billion in total went on to support all programs that was part of the 2020 budget.
“It went to the people. If we had not stopped the bleeding, there would have been massive cuts in expenditure,” the treasurer said.
He explained that the cuts in expenditure would have been lead to pay cuts of K185 million fortnightly wages to the public services which by now that would have caused a collapsed in our health system, education , the Police and to the businesses and infrastructural support that paves way for business to continue operate.
Meanwhile, with the new Delta strain of COVID-19, a total amount of K600 million has been set aside this year as part of an emergency response. A further K60 million has been set aside for 2022.