Liklik Toea Blog

21/06/2024

05/06/2023

PNG's 2022 Final Budget Outcome (FBO) Report will be presented to Parliament in this sitting.

Here is what you need to know about the 2022 FBO.

05/06/2023

PNG needs leaders who set a vision for the nation. Treasurer Ian Ling-Stuckey has set a Medium Term Fiscal Strategy that seeks to have a balanced budget (meaning no extra dinau) for PNG by 2027 and give the next government the option to Repay All Debts incurred since independence by 2034

15/07/2020

Treasurer meets with the Head of EU Delegation to PNG

The Treasurer, Ian Ling-Stuckey met with Mr Jernej Videtic, the Head of EU Delegation to Papua New Guinea for the first time on Thursday 9th July 2020. Both the Treasurer and the Head of EU Delegation discussed Development Cooporation in relation to the EU’s assistance to PNG.

Papua New Guinea is party to the Cotonou Partnership Agreement which is the Development Cooporation Framework that EU operates within. It is a Treaty between the Eurpoean Union and the African, Carribean and Pacific Groups of States. The Funding arrangement under this framework is the European Development Fund of the EDF. PNG is currently implementing the 11th EDF ( 2014-2020). The original funding envelope under the 11th EDF was EURO 184 million (K699.7m). This envelope was revised downwards to EUR 154 million, during the mid term review in 2016/2017.

This was an opportune moment for the Treasurer to be briefed on the EU Programs in PNG and to discuss portential areas of engagement, especially in Development Cooporation, Trade and Investment, Rural Development, Water and Sanitation and Good Governance and Policy Reforms.

Much of the discussions was focused on EU’s assistance in the following areas;
• the Public Finance Management Sector and how the Government of PNG can utilise the Technical Assistance modality in Treasury and Finance Department.
• The EU – PNG Business Council
• Foreign Business Investors
• Engagement with EU Member States
• The need and importance of establishing the PNG National Trade Office

The Treasurer will seek to explore the PNG investment window – a modality whereby Grant funding is used to mobilize additional investment monies in cooporation with Investment Banks. Although PNG has traditional multilateral development partners in the likes of the World Bank, the Asian Development Bank, EU has presented the opportunity to look beyond these traditional partners, especially in other partner Banks such as especially, European Investment Bank.

Hon. Ian Ling-Stuckey, CMG. MP
Minister for Treasury
13 July 2020

21/06/2020

Ngavalus Primary School selected as pilot project for infrastructure excellence in Kavieng

“Education is a shared responsibility with Parents & Friends, Boards of Management, Teaching staff and District Development Authorities needing to fully cooperate to provide the best possible learning environment for our children throughout the country” Treasurer Ian Ling-Stuckey and Member for Kavieng provided this advice during the presentation of a K111,000.00 school truck for the Ngavalus Primary School in the Tikana LLG area in Kavieng in May last month.

Mr Ling-Stuckey said the school was recommended as a pilot project to fast track infrastructure development by the Kavieng District Development Authority (KDDA), due to the integrity of the Chairwoman and her board of management, its Headmistress and her teaching staff. “ Gender equality is alive and well in kavieng” said the Treasurer. He encouraged the school to formulate detailed and accurately costed plans for its proposed modern classroom complex, teachers houses and a comprehensive library facility and furnish to the Department of National Planning for consideration in the 2021 Budget.

The Treasurer encouraged the School to manage and maintain the vehicle for the benefit of their school children, who like many others in Kavieng District, can commute up to 5 kilometers a day to attend classes without parental supervision. “ Arriving to school on time without the long distance walked whilst exposed to the sun and rain, will contribute positively to their attention span and hopefully, a more positive attitude to learning and their school experience” said Mr Ling-Stuckey.

“What we witnessed at Ngavalus primary school last month is an example of how the Marape-Steven Government’s K5.7 Billion economic stimulus package and much enhanced, implementation of the District Support Improvement Program (DSIP), can make a difference in the lives of rural Papua New Guineans during this global pandemic.
It reflects the Prime Minister’s vision of leaving no child behind as we collectively Take Back PNG ” said Treasurer Ling-Stuckey.

Hon.Ian Ling-Stuckey,CMG.MP
Minister for Treasury
22 June 2020

13/06/2020

Kavieng villages recipients of largest water supply program

Treasurer Ian Ling-Stuckey said on Sunday that Papua New Guinea must use the coronavirus pandemic as an opportunity to implement the United Nations Sustainable Development Goals (SDG). He said this following the launching of 199 1000-gallon tuffa tanks purchased at a cost of K500,000.00 from the Kavieng District DSIP funds. The first delivery of eleven 1,000-gallon tuffa tanks each valued at K2,600.00, were delivered to East Coast Nalik in the Tikana LLG area utilizing eight 3.5 ton toyota trucks and volunteer labour.Deliveries to the Lavongai LLG, Murat and Kavieng town areas would take place over coming weeks.

“During my visit to Washington last year for the annual IMF country meetings , I was confronted with the fact that priority goals set by some of the richest nations on this planet including large multilateral financial institutions and readily embraced by some of the poorest nations, relate to improving the most basic livelihoods of ordinary villagers in Papua New Guinea,” Treasurer Ian Ling-Stuckey said.

“Goal No six of the UN SDGs calls for clean water supply and sanitation for all.”
“Kavieng District Development Authority has therefore allocated K1.0 million from its District Improvement Program (DSIP) and Public Investment Program budget, towards achieving this UN SDG in the district, just for 2020.”
“As chairman of the Kavieng District Authority I will ensure that the short term water supply systems we are currently installing in rural villages with installation of Tuffa Tanks complement our Long term water supply program, upgraded with commercial heavy duty 50 mm Poly pipes, connecting water from natural water sources to remote villages.”

The Treasurer said the ordinary villagers of Kavieng District are seeing tangible benefits of the Marape-Steven government’s K5.7 Billion economic stimulus package aimed at protecting Papua New Guineans from the impacts of coronavirus.

“I understand my critics demand for sweat equity to be implemented in the Districts, but isi lo toktok taim yu kisim fortnite (its easy to demand counterpart funds from individuals when you (have a job) and earn a fortnight's pay” the Treasurer said.
“However, for a mother or father living in a typical rural village, being able to walk a few meters, instead of a couple of kilometers, to fetch clean, drinking water, can now be a reality and make a real difference in their lives.”
“I encourage our people to remind themselves of their roots and the basic needs of our rural people and to ensure a sensible balance, is used in the budgeting of development projects.”
“All too often, Papua New Guineans have seen large scale projects benefit only a privileged few people and at urban centers, at great cost to ordinary citizens in remote villages.”

Hon.Ian Ling-Stuckey,CMG.MP
Minister for Treasury
14 June 2020

12/06/2020

Public Health Emergency Bill passed today.
Ayes 70- Nays 14

Parliament adjourned to Tuesday 25 August, 2020.

12/06/2020

On 10th of March 2013 UBS LOAN Consultants were paid AU$14,555,759.00

SOURCE: Ombudsman Commission Report on UBS LOAN, Page xxi

12/06/2020

2019 Final Budget Outcome – Extra capital investment, higher international support and better tax compliance

“I was pleased to provide Parliament with the 2019 Final Budget Outcome (FBO) today. This is an important document of budget accountability on how the Marape-Stevens government is starting the process of budget repair through the October 2019 Supplementary Budget. Overall, there is a some very positive news for the people of PNG:

International donor support was much higher than expected with donor grants being K832 million higher than expected;
Good, cheap concessional project financing was much higher than expected with K495 million extra for capital project expenditures around the country;
This increase in project expenditure was particularly done by the Asian Development Bank which invested K592 million in 2019, well above the original estimate of K287 million, in projects supporting airports and roads throughout the country;
Capital investment spending was K997 million higher than expected in the Supplementary Budget. Compared to 2018, capital investment spending is estimated to have increased by K1,420 million. This is good news for our children’s future, as well as good news for local businesses;
This increased international support lifted total expenditure in the budget from the 2019 Supplementary Budget estimate of K16,525 million up to K17,852 million – an increase of K1,327 million or 8 per cent – this is a massive domestic stimulus to the economy – much more than any resource project would have been able to deliver in its early FEED stages of development;
Domestic expenditure was kept tightly under control after the loss of control and fake figures provided in the initial 2019 O’Neill budget – so the FBO indicates expenditure was K14,765.1 million, actually just below, I repeat below by K0.8 million, the Supplementary Budget estimate; and
Domestic tax collections were K470 million higher than estimated despite no new taxes being introduced. This reflects the positive move back to a 5% growth rate in 2019 after the negative growth of 0.8% in 2018. It also reflects action starting to be taken on tax compliance.

“For all of these positive developments, there is also much work to be done to get out of the deep budget and economic hole left by O’Neill. The starting point for the 2019 Supplementary Budget was a deficit now estimated by Treasury at K4,985.8 million, even higher than initially estimated. So the starting point was going to lead to an increase in PNG’s debt levels by this extra K4,985.8 million. Through the 2019 Supplementary Budget, the Marape-Steven government was able to wind this back to K4,172 million. So the process of budget repair in the first year meant that debt was K813.8 million less than if the O’Neill 2019 had stayed in place. Frankly, we had hoped for an even lower budget deficit. We wanted to get it down to K3,503 million. But given that over 80% of the difference was because of the K495 million increase in good, cheap concessional financing directly tied to new capital projects around the country, the outcome was still a good outcome.

“The FBO process also indicates that even more work will be required to bring the operating budget under control (wages and goods and services) so that we can direct more spending to the capital budget. There is also further work required to improve the budget reporting systems to improve their accuracy and timeliness. I regret that the FBO came out later than it should have but issues around COVID-19 and improving the accuracy of the figures added to delays.

“Finally, I would like to thank all those involved in the FBO process. This includes people in Treasury and Finance as well as all those throughout our national, provincial and district administrations that work hard to keep our accounts in order, to collect our revenues, and to ensure that expenditures are effective. The budget and its accountability is in fact a massive team effort across the country so I thank all those involved for a successful 2019 budget outcome! I must also note, however that much more work lies ahead in slowly escaping from years of budget and economic mismanagement.

Hon.Ian Ling-Stuckey,CMG.MP
Minister for Treasury
11 June 2020

12/06/2020

Background information on the K1.2 Billion IMF Loan

IMF Rapid Credit Facility (RCF)

The Rapid Credit Facility (RCF) provides rapid concessional financial assistance with limited conditionality to low-income countries (LICs) facing an urgent balance of payments need. The RCF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund’s financial support more flexible and better tailored to the diverse needs of LICs, including in times of crisis. The RCF places emphasis on the country’s poverty reduction and growth objectives.

Limited conditionality

Fund support under the RCF is provided without ex post program-based conditionality or reviews. Economic policies supported under the RCF should aim at addressing the underlying balance of payments difficulties and support the country's poverty reduction and growth objectives.

Concessional lending terms

Financing under the RCF carries a zero interest rate, has a grace period of 5½ years, and a final maturity of 10 years.
https://www.imf.org/en/About/Factsheets/Sheets/2016/08/02/21/08/Rapid-Credit-Facility

The Rapid Credit Facility (RCF) provides rapid concessional financial assistance with limited conditionality to low-income countries (LICs) facing an urgent balance of payments need. The RCF was created under the Poverty Reduction and Growth Trust (PRGT) as part of a broader reform to make the Fund&...

09/06/2020

IMF BOARD APPROVES K1.2b FOR PAPUA NEW GUINEA

The Government has secured a K1.2b soft loan from the International Monetary Fund.

The IMF board approved the soft loan last Friday in what Prime Minister James Marape describes as a landmark achievement and a strong vote of confidence in the Marape-Steven government and PNG's economy from the international community.

In a statement Tuesday night, Prime Minister Marape says the soft loan was secured on unprecedented terms and will go straight into the Bank of Papua New Guinea with direct foreign exchange benefits for the private sector.

Mr Marape says the loan was secured on unprecedented terms of 0.0% interest rate over 10 years with a 5.5 year grace period and the first principal repayments will start in December 2025.

He says like the Australian bridge financing in 2019, the loan will go straight into the Bank of Papua New Guinea with direct foreign exchange benefits for the private sector.

“I want to assure the people of this country that this loan will be put to good use in supporting our proven policy based programs," said Prime Minister Marape.

"These include support for our COVID-19 response, Connect PNG, Special Economic Zones to promote exports, HELP program, Agriculture and MSME policy, State-Owned Enterprises reforms, and Public Sector reforms."

“This loan forms the core of the 2020 budget and is within our five-year fiscal consolidation strategy that aims to bring debt-to-GDP ratio to below 40 per cent in 2024 in order to restore commitment to the limits set out in the Fiscal Responsibility Act," said Mr Marape.

The Prime Minister made it clear that the current support of the IMF reinforces his Government’s home-grown policy based programs and reforms.

He says this is unlike the previous IMF program of the 1990s characterized by strict trade and capital markets liberalization and currency devaluation policy conditions.

"This new lending program for PNG is part of a reconfigured relationship between the IMF and Papua New Guinea. The earlier work under the Staff Monitored Program established a track record to allow access to the new emergency funding. The IMF and the international community will continue playing a key supporting role as partners in PNG’s own growth and development reform program."

Prime Minister Marape is delighted that Treasurer Ian Ling-Stuckey and his dedicated team had worked closely with the IMF over many months to secure this landmark financing agreement.

“I want to congratulate Treasurer Ian Ling-Stuckey for working tirelessly to repair the country’s budget. He has put a stop to reckless borrowings for poorly conceived capital projects that mostly benefited foreign firms and SOEs."

"He has stopped expensive commercial borrowings where the financial benefits flowed to foreign bankers. He has instead delivered a major reform agenda that has reshaped our debt management strategy to focus on securing good, cheap, transparent financing from the international community and our priority strategic partners such as Australia."

Mr Marape also thanked the IMF Board for recognizing his government’s sincerity and transparency in setting a new direction for the economy.

"We are a more open, transparent and accountable government working to reduce corruption. We are working diligently to adjust from recurrent expenditure towards increased investment in growth through the capital budget while focusing on improving efficiencies and productivity for export growth," said Prime Minister Marape.

NBC News

07/06/2020

Treasurer solves transport woes for Kavieng island wards

Ten wards in the Lavongai, Tikana and Murat local level government areas of Kavieng are beneficiaries of an annual K500,000 transport service improvement program initiated by Treasurer Ian Ling-Stuckey, the Member for Kavieng.

He presented a 23 ft banana boat and 40hp yamaha outboard motor to each of the wards during a launching event held last Thursday at the Kavieng Beach Front Market.

“The recipient villages in the Lavongai, Tikana and Murat LLG areas are heavily dependent on sea transport to access goods and services in Kavieng.Infact, it is their only mode of transport and without it, vital economic transactions and health services, are rendered non existent” Mr Ling-Stuckey said.

“Many of these communities have suffered as a result of disruptions caused by the coronavirus pandemic, and the critical timing of the boat launch will steer them out of their recent difficulties.”

Mr Ling-Stuckey said the boats and outboard motors presented to rural villagers was one of his 7 point policy platforms unanimously mandated by the people of kavieng at the 2017 general elections.

He added that the national government has provided additional assistance of K500 000 per district to enable better market access and stimulate SME activities amongst rural communities.

Mr Ling-Stuckey reminded critics, especially on social media, of the vital and beneficial needs of his sea transport program – for example having a banana boat to take pregnant mothers and other patients to health centres saves lives. Having a banana boat is critical to take goods to market to sell and earn incomes. They are practical solutions to my people’s basic needs.

He also reassured the people of Kavieng that they will soon see the benefits of the K5.7 billion Economic Stimulus Package that the Marape-Stevens Government has initiated to protect PNG from the health and socio-economic impacts of COVID-19.

The Economic Stimulus Package reflects and builds upon the Marape Government’s Take Back PNG agenda – it has a strong focus on practical, effective and people-oriented initiatives, particularly in rural and remote areas.

“We are concentrating all our efforts on things that really count to ordinary Papua New Guineans, we have rejected the historical emphasis that governments have placed on large, one-off projects that favor foreign multinationals more than Papua New Guineans.

Hon. Ian Ling-Stuckey, CMG. MP
Minister for Treasury
8 June 2020

05/06/2020

Parliamentary Statement – Economic and COVID-19 Update

Treasurer Ian Ling-Stuckey tabled a Ministerial Statement to Parliament on Friday 5 June to provide an update on the economy and implementation of the COVID-19 Economic Stimulus package. This was his third economic update statement this year. There will be another statement next week on the 2019 Final Budget Outcome (FBO). This reflects the Marape-Steven government’s emphasis on honesty and transparency.

“The context is a tough one. COVID-19 is a dangerous, hidden enemy. Under the strong leadership of the Marape-Steven government, PNG has avoided the worst impacts faced by countries such as Brazil, the UK, the US and Italy as well as smaller states such as Palau which was so dependent on international tourism. Nearly 400,000 dead across the globe. The heroes in this fight have been national unity and front line workers, who have been preparing our country for the dangers posed by COVID-19. We can be very proud of this national effort and the people involved deserve our praise and thanks” said Ling-Stuckey.

“On the economic front, PNG is not immune from the adverse impacts from COVID-19. Latest estimates indicate that the GDP growth rate is expected to fall by 3.7 percentage points, down from the 2 per cent growth forecast at the time of 2020 Budget down to minus 1.7 per cent currently. This is actually a smaller reduction than almost all other countries in the Pacific region - demonstrating the global scale of the adverse economic falls caused by COVID-19. Most economists consider this is the worst global economic downturn for nearly one hundred years.

“This fall in growth will lead to an estimated fall in revenues of K2,222 million, up from the K2,000 million estimate provided two months ago. This loss of revenues means our budget deficit will increase by the same amount – so from K4,631 million to K6,853 million. Just as PNG was beginning to repair the budget after years of wasted spending on foolish APEC and grandiose Port Moresby focused projects by the former Prime Minister, COVID-19 comes and hits us hard. The Treasurer indicated that major budget cuts are being planned – but these will likely only be sufficient to fund the extra expenditure required for COVID-19.

The K5.7 billion Economic Stimulus Package is being implemented. More than K2 billion has been raised in COVID-19 Bonds. Former Prime Minister O’Neill has criticised the high cost of some of these borrowings. But he is a hypocrite as much of this borrowing for ten year bonds was simply a loan to repay the loans he incurred as Treasurer 10 years ago. At least K1.5 billion in additional concessional financing is well advanced with a big announcement expected by Monday or Tuesday morning of K1.26 billion in financing with a zero per cent interest rate. The early access to superannuation legislation is due for Parliamentary consideration shortly – although I had hoped it could have progressed more quickly. Support has been provided to our banking sector to provide debt repayment deferrals and lower interest rates. However, I am still waiting for reports on how that has actually been put into practice by our commercial banks which the government does not directly control. We have worked hard to contain price increases and the fall in petrol prices is welcome. The deferral of tax payments until later this year should also have provided good support for the cash flow situation of our local businesses, and this should have helped them support jobs. Overall, pretty good progress.

Only K0.6 billion of the K5.7 billion Economic Stimulus Package was for direct budget expenditure. Frankly, this has gone more slowly than I had planned for and wished for. The first reason was revenue shortfalls. The second is our rigid budgeting systems not designed for an emergency response.

The good news is that our work on the COVID-19 Bonds and the credibility of our reform program gaining international support means that the cash is starting to flow. Warrants have been released for the entire K600 million in financing. Cash for this funding has been sourced from the net proceeds of the COVID-19 Bonds and international assistance. Some key agencies have been directly funded already include:
K45 million already allocated to the Department of Health with another K30 million set aside waiting for a detailed budget.
K30 million to the police of the K60 million for the security services to strengthen law and order and to defend our borders.
K35 million of K73 million to the Defence Force to construct 10 border posts, including facilities for Immigration, NAQIA and Customs activities as appropriate, to future-proof the border.
K15 million to the Department of Foreign Affairs, Immigration and Trade for capacity building and strengthening of PNG’s foreign missions to respond to the needs of PNG citizens living overseas, as well as the repatriation of those who need to return home.

In addition, disbursement of the following amounts has begun and should be fully disbursed over the coming week:
K111 million to support agricultural development and food security such as the purchase of seedlings and gardening tools - K1,000,000 has been allocated to each district and Province. Full warrants have been released and funding set aside from the second COVID-19 Bond.
K44.5 million to support rural MSMEs and households, enabling districts to undertake responsive MSME activities such as market improvements and small business training – K500,000 has been allocated to each district. Full warrants have been released and funding set aside from the first COVID-19 Treasury Bond raising with disbursement already taking place;
K33.3 million for Water, Sanitation and Hygiene (WASH) programs to upgrade clean water and soap/sanitiser facilities at markets, schools, universities, technical colleges, churches, aid posts and other potential hotspots - K300,000 is initially being distributed then a further K200,000 with full warrants being released and funding set aside from the first COVID-19 Bond for each Province and District.

“This innovative and carefully targeted funding puts people first and reflects the Marape Government’s Take Back PNG agenda,” Mr Ling-Stuckey said. “It is a fair and balanced package that entrenches our vision for a stronger, more independent and more sustainable Papua New Guinea. We have decentralised the decision-making on these funds – we believe local level administrations can make better decisions on providing the best agriculture, MSME and public hygiene for their people.”

Mr Ling-Stuckey said the Marape Government would have been able to spend much more on family and business support if not for the mountain of debt run up by former Prime Minister Peter O’Neill. This debt includes having to repay his K2.5 billion in arrears to PNG businesses, which he refused to pay them whilst in office for 7 years, on top of his expensive commercial loans from merchant banker cronies.

“Mr O’Neill’s destruction of the economy and government finances has severely hampered the war on COVID-19, the deadliest enemy the nation has ever faced.” Mr Ling-Stuckey said.

“His reckless waste and mismanagement means that Papua New Guinea is weaker financially than ever before, at the very time it must deal with the world’s most severe economic crisis since the Great Depression nearly 100 years ago.

“Nevertheless, and despite the depredations of Mr O’Neill, the Marape Government’s Economic Stimulus Package is now being fully implemented and the benefits will flow across the nation.”

Hon. Ian Ling-Stuckey, CMG. MP
Minister for Treasury
5 June 2020

01/06/2020

COVID-19 –K44.5 million to support Micro, Small and Medium Sized Enterprises (MSMEs)

The Marape-Stevens Government is releasing K44.5 million from its coronavirus Economic Stimulus Package to support micro, small and medium enterprises (MSMEs).

“This targeted, decentralised support will get to those who need it most as quickly as possible. The money, K500,000 for each district, has already begun to flow to district COVID-19 accounts.

“The informal sector and MSMEs are the backbone of the rural economy and provide livelihoods for over 80 percent of the population. By supporting MSMEs, we support the rural and subsistence economy throughout the nation, which has been hard hit by the State of Emergency lockdown.”

The MSME stimulus will support families and communities in remote locations as well as those living around the major towns and cities. The funds must be used for activities that support MSMEs and be in addition to those already planned through the District Services Improvement Program.

The funds can be used for activities such as:

lowering market fees for vendors;
spending on small-scale infrastructure that provides both health and economic benefits such as market upgrades;
spending that boosts local employment through MSMEs;
support for farmers to get goods to urban markets through produce aggregation and transportation;
financial literacy and small business training, and
similar activities that help women and men alike.

The funds should be spent locally rather than directed to businesses outside the district wherever possible.

“These funds are deliberately provided at the local level to help ensure local MSME needs are best met. There is a larger national program of MSME assistance worth K200 million which is being organised through the major banks to provide low-cost, long-term finance to MSMEs.

“MSMEs are also receiving support through other COVID-19 support programs. For example, the K111 million support package for agriculture and food security will also benefit small, local businesses. The K60 million WASH program will include support for better public hygiene facilities in local markets. Every district will receive K2 million in total through these programs – K1 million for agriculture, K0.5 million for WASH and K0.5 million for MSMEs. We are confident that all three of these programs, being implemented at local level, will be properly coordinated” stated Treasurer Ling-Stuckey.

Provinces and districts are to report on all spending, in accordance with Finance Instruction 5-2020 on COVID 19 procurement and reporting requirements which is available on the government’s procurement website http://www.procurement.gov.pg/wp-content/uploads/2020/05/FI-05-2020-Expenditure-Control-of-Funds-for-COVID-19-Emergency-Response_signed.pdf ). All local communities are encouraged to share on social media such as posting photographs and progress reports on their pages on the ways they have been using these funds to MSMEs in their local communities.

Hon. Ian Ling-Stuckey, CMG. MP
Minister for Treasury
1 June 2020