As detailed in his ministerial statement to Parliament on the economic stimulus package yesterday (April 2, 2020), Minister for Treasury, Ian Link-Stuckey said 90 percent of the package will be funded through innovative and flexible mechanisms
He stressed, the Marape- Steven government recognises the C19 pandemic health emergency will create an economic emergency, therefore a smart innovative, caring and responsive approach is required to build the country’s economic resilience.
“We are proposing a package of actions to help support business activities during this critical time, to protect jobs and to ensure that needed investments still continue.”
The six key economic stimulus packages include:
- 5 billion issuance of COVID-19 Treasury Bonds. The government will be raising funds through domestic financing over the next four months to support health, security and development in the country.
- 6 billion of support for loan repayment holidays which are available for three months. Households and businesses are assured of an extension of support if the lockdown and covid-19 war continue.
- 5 billion in friendly foreign assistance. International Monetary Fund has provided K1,260 million; K170 million from the Asian Development Bank and K70 million from the World Bank.
- 5 billion in superannuation measures to support jobs, businesses and investment.
- 5 billion as a direct budget response to the critical health, security and economic sectors. K250 million of this funding will be directed at the health and security response. An extra K175 million for health, K50 million extra for police and K25 million extra for the defence force. The health support of K175 million is four times the initial request for health funding of K45.5 million.
The other K250 million of the domestic budget response is to directly support the rural sector, jobs, micro, small and medium sized businesses (SMEs) and households.
- Supplementary budget. The Treasurer has indicated he would find budget cuts to finance the increased needs of the health, security and economic sectors. He raised concern that preparations for a Supplementary Budget is needed and have asked the Central Agencies Coordinating Committee (a committee of the Secretaries of key government departments) to do a thorough review of the national budget.
He added that an additional grant aid support from donors such as the K50 million (AUS$ 20.5 million) recently announced by Australia.
The Treasury Minister pointed out the importance of effective coordination with other C19 security actions as it is a major concern.
He said fear of the coronavirus and inappropriate responses to the lockdown highlight the risks of social disorder leading to widespread looting and other attacks on key economic assets.
He further stated that a key element of the national response is ensuring the safety of businesses, banks and key supply chains such as power, water, telecommunications and transport.
“Excellent Coordination and Communication is a key to success in waging this war against C19.
“We must ensure strong communications between the health, security and economic sectors continue.”
“We want to protect vital activities such as the PNG Connect Initiative and look into advance rapidly in existing projects and consider all activities that can rapidly get support out to our rural communities and settlements”.
“We will be responsive, innovative and caring in our responses,” he said.
Minister Ling- Stucky said the government understands that creating this positive chance through a strong lock down has a significant economic cost where prices for many items are increasing, people have lost jobs, many businesses are struggling to pay bills, and families are worried about loved ones and cannot travel.
He explained that the government understands these pressures and it is responding with an economic stimulus package of K5.6 billion.
“We are a resilient people and we will work our way through this crisis and will not just get through this crisis but we will use it as an opportunity to build a better, more caring and more inclusive PNG,” said MP Ling Stucky.