The 2026 Budget totals K30.9 billion (approximately NZ$12.4 million) in expenditure. Photo: 123RF
The Papua New Guinea government has tabled its 2026 National Budget - a money plan that reinforces the country's medium-term repair path and sets another record in scale.
But before diving into the numbers, Treasurer Ian Ling-Stuckey could not resist setting the political scene.
In a speech peppered with pointed jabs, he repeatedly referred to former Prime Minister Peter O'Neill only as "the other guy," blaming him for past mismanagement, inflated deficits and what he described as "fake budgets".
"We must learn some painful lessons from our past, and with wisdom from those lessons, ensure our budgets provide the targeted resources that can inspire our future security," he said, shifting to the serious business of charting PNG's fiscal recovery.
The 2026 Budget totals K30.9 billion (approximately NZ$12.4 million) in expenditure, up from K28.3b this year, framed as a continuation of the country's long-term repair plan.
It comes with a backdrop of cautious optimism: domestic revenues are expected to fund 88 percent of the budget, borrowing is easing, and the deficit is projected to fall sharply - signalling what the treasurer wants seen as a steady return to credibility, stability and discipline.
"We must learn some painful lessons from our past, and with wisdom from those lessons, ensure our budgets provide the targeted resources that can inspire our future security."
Ian Ling-Stuckey Photo: Department of National Planning & Monitoring
Domestic revenues are expected to provide about 88 of the budget's funding, signalling a focus on strengthening revenue mobilisation rather than relying on higher taxes. This means the government plans to fund most of the 2026 budget using money generated inside Papua New Guinea - through existing taxes, resource revenues and dividends from state entities - rather than relying on foreign loans or new taxes.
Ling-Stuckey has stated that the budget deficit is projected to fall to about 1.1 percent of GDP in 2026, down from much higher levels during previous years of economic shock.
Meanwhile, gross debt-to-GDP is forecast to decline from around 48.4 percent in 2025 to 45.5 percent in 2026 - with a further projected drop to around 42 percent in 2027. Ling-Stuckey said these figures reflect the government's ongoing commitment to its 13-year Budget Repair Plan and a return to more sustainable fiscal settings.
"This high deficit was imposed on our people despite the expected boom of the PNG LNG Project coming on stream in 2014. The other guy wasted and misused the expected benefits of the largest resource project in our history."
Key features and priorities
The 2026 budget emphasises several areas. Infrastructure investment remains central, particularly under the Connect PNG Program - roads, highways, bridges and rural access - as well as health and education infrastructure.
Law and justice, agriculture and economic-enabler agencies receive elevated attention. Recurrent funding for frontline agencies such as schools, hospitals and police will be maintained, and no new tax increases are planned.
One of the budget's strengths is its credible trajectory: by setting realistic targets rather than grand promises, it signals a maturing of fiscal discipline. Relying more on domestic revenues without raising tax rates strengthens fiscal sovereignty and reduces exposure to external shocks. The emphasis on infrastructure is well suited to PNG's challenges, where connectivity and institutional capacity remain the main bottlenecks to inclusive growth.
However, implementing a record budget places heavy pressure on government systems that already struggle with capacity constraints and corruption risks.
External vulnerabilities also loom: falling commodity prices or tighter global financing conditions could undermine revenue and borrowing assumptions. Non-resource growth projections are encouraging but must be sustained.
"These increases show that the Marape-Rosso Government stands with our police, defence forces, judges, magistrates, prosecutors, and anti-corruption bodies-because better security strengthens growth."
Pressing issues
Papua New Guinea faces several urgent issues that must be addressed for the 2026 budget to translate into real improvements in people's lives. Health services remain under severe strain, with medicine shortages, aging equipment and uneven provincial funding.
Law and order challenges continue to escalate, stretching police capacity and affecting business confidence. Education is struggling with overcrowded classrooms, inconsistent teacher deployment and outdated infrastructure.
Urban centres face mounting pressure from settlement growth, water shortages and unreliable waste systems. Meanwhile, rural roads deteriorate faster than they can be repaired, inflation squeezes households and climate-related disasters intensify while adaptation funding lags.
"PNG remains on track for a K200 billion economy by 2030, K300 billion by 2035, and K1 trillion by 2048."
The real test now is implementation.
If projected revenues materialise, expenditure is kept disciplined and investments reach rural and underserved communities, PNG may edge closer to its fiscal and development goals. But the margin for error remains narrow - and delivery will determine success.
