17 Nov 2010

PNG presents largest budget ever

4:09 pm on 17 November 2010

The Papua New Guinea government has presented a 2011 budget of nearly four billion US dollars - its largest ever.

The treasurer Peter O'Neill says it represents the biggest ever spending announcement in PNG and provides a great opportunity to build up the nation.

The budget has increased funding to the education and health sectors, while more has been allocated to road building.

Mr O'Neill says the outlook for next year is very positive, with the PNG economy forecast to grow by eight per cent, marking ten years of uninterrupted growth.

PNG's strong economic positions stem from the prolonged mineral boom and the ExxonMobil-led liquefied natural gas project that's expected to inject billions into the economy over the next 30 years.

The growth threatens inflation with it forecast to reach about 8.2 percent.

The Sydney Morning Herald reports that PNG has so far failed to translate its numerous mineral-related revenue streams into real development for its population.

It says chronic underfunding for police, the courts and jails has fuelled a law and order problem and has led to a heavy reliance on aid, including nearly half a billion dollars annually from Australia.