Papua New Guinea Budget 2020

Our view

We acknowledge that the Marape-Steven Government has been in power for a short period of time and has taken a significant exercise in restating and reforecasting the Budget numbers. We commend the Government for undertaking that difficult work and having buy-in from multilateral partners, including the Australian Government and the IMF.

In that context, the 2020 Budget takes a dual path to growing the PNG economy, through both a non-resource sector focus and short term stimulus:

• Non-resource sector growth – charting a path towards industrialisation (through electricity, internet & road infrastructure and SOE reform), funding for improved health & education outcomes and creating enhanced conditions for SME growth (new tax regime).
• Short term stimulus – boosting economic activity through capital investment (funded by cheap multilateral partner loans) and injecting additional foreign exchange through increased Bank of PNG market intervention. The Budget also takes important steps to correcting mistakes of the past, such as payment of arrears across retired public servants and construction contracts, providing further stimulus to the economy.

We see these initiatives as worthwhile, valuable and additive both economically and socially to the people of Papua New Guinea.

Published: November, 2019