PNG PM and IMF at odds over district grants

1:00 pm on 21 September 2017

The Papua New Guinea Prime Minister says he is confident a supplementary budget will balance the books.

PNG PM Peter O'Neill

PNG PM Peter O'Neill Photo: AFP / Peter Parks

The additional budget is to tabled in the parliamentary session starting next week.

Peter O'Neill said PNG was still in a challenging global economic environment with a slow rebound in commodity prices, and he says this places pressure on spending.

He said his government would continue to adjust and reprioritise spending.

Mr O'Neill also said his government would not be cutting the District Service and Provincial Service Improvement Programs.

He said in the supplementary budget the Government will provide 2 million Kina for each district and province, with the balance to be paid later in the term of the current parliament.

Earlier, the IMF said it would take until 2020 to achieve a balanced budget.

It said higher taxes and cuts in spending would be needed to overcome the country's deficit.

The IMF also said it endorsed plans to substantially scale back the regional and district grant programs, which it says were ramped up on the expectation of much higher LNG revenues than eventuated.

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