Treasurer highlights Covid-19 economic response in Parliament

Thursday 12  August 2021

The Minister for Treasury, Mr  Ian Ling- Stuckey, presented  a   COVID-19 economic response by   the Marape Government, during this morning’s session of Parliament, which he said ,was for protecting the budget as well as the economy.

He explained that over 90 percent of the economic response or K5.3 billion,  was protecting the 2020 Budget, due to the global pandemic .

“K5.3 million supported education, health, infrastructure and other programs that were already in the 2020 budget.”

Mr Ling -Stuckey has   further set out   how the  K400 million direct budget expenditure  was allocated.

“The  majority of the  expenditure was through local action programs of which K214.8 million was  spent.”

The  other expenditures include:

  • K1 million to all Districts and Provinces for agriculture programs to ensure food security;
  • K0.5million   to all Districts and Provinces for Water Sanitation Hygiene  (WASH) programs to help prevent the spread of coronavirus into communities; and
  • K0.5 million for all Districts  for MSMEs to keep small PNG businesses operating .

Mr Ling-Stuckey further  outlined the remaining direct action funding, which included:

  • K19 million – Personal Protective Equipment
  • K16.4 million – Isolation Ward set up costs
  • K30.7 million  –  Provincial Health Authorities
  • K71.8 million – Police  (to cover additional costs associated with COVID-19 compliance)
  • K5.8 million – Department  of Defence ( to help strengthen the PNG Borders)
  • K2 million – Customs and K2 million NAQIA (to further strengthen the borders)
  • K11.1 million – to help cover costs of bringing stranded PNG citizens abroad back home
  • K3 million – Port Moresby General Hospital
  • K3 million – National Operations Centre to help coordinate the national coronavirus response.

“The remaining K5.3 billion consisted of two parts. First, there was K2.8 billion in additional concessional financing. These funds replaced the tax measure  that was lost because of the impacts of COVID-19 on the world, such as lower oil prices as well as impacts due to lockdowns driven by health concerns.

“A further K2.5 billion was raised through a COVID-19 Bonds to finance budget expenditure. Such bond financing had been built into the original 2020 Budget.”

Mr Ling-Stuckey stressed that the K5.3 billion supported the 2020 Budget,, adding, he supported people by  paying for  doctors, nurses and teachers and police wages and avoiding cuts to contracts of infrastructure projects.

“By stopping the  bleeding of budget finance caused by COVID-19, we protect our economy. If we had cut K5.3 billion from our budget, this would have reduced our real growth rate by over six percent, making COVID-19 created recession of 2020 so much worse.”

He added that  the impacts of COVID-19 is now built into future budgets, with  an expected  ongoing revenue shortfalls of  a further K4 billion built into the 2021 to 2025 budget framework.

“We have built in on-going financing of up to K600 million for 2021 and 2022, while reducing the  size of budget deficits,” Mr Ling-Stuckey added.

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