DURING the course of last week, Papua New Guinea’s opposition leader Don Polye warned that the country’s 2017 budget “must not become another hoax”.
The budget for 2017 – which prime minister Peter O’Neill has said will be “measured and cautious” - is to be tabled when parliament resumes on Tuesday.
One thing we can be sure about in this budget is that there will be further cuts.
Treasury Secretary Dairi Vele as good as confirmed this when he admitted that “over the last four years we've been borrowing money and we've been spending more than we earn.
"We are not earning as much as we thought would be earning.
"What we are trying to do is to make sure that we don't keep borrowing beyond our means.”
Vele did say that there would not be cuts to key priority areas including health, education and law and order but it’s hard to see that these high spending areas can be set aside if there is to be a realistic attempt to get the budget back into shape.
For his part Peter O’Neill says, despite the financial situation PNG faces, the government remains focused in its budgeting.
"We are not as bad as many other countries in the world,” he told a Port Moresby conference. “There's some things that we cannot control like commodity prices but we can manage our budget. We can manage our spending.
"So we have a huge deficit in 2012 when we came into government but it has been a deliberate strategy where we are trying to reduce the deficit levels. We are now on target. Our GDP has gradually doubled over for the last five to six years".
He told another gathering during the week that there was strong and sustained economic growth, “7.5% on average and steady growth in employment which was 7% on average under PNG’s positive economic outlook”.
It all seemed that, if you average out the statistics over a selected number of years, you can present even seriously troubling data in a much rosier light.
“Peter O’Neill is not afraid to tell lie after lie even when our people know very well he is lying,” said opposition leader Polye.
“According to a World Bank report and other think tanks, our debt level stands at more than 40% while under the Fiscal Responsibility Act our legal ceiling is 30%.”
Like his prime minister, central bank governor Loi Bakani prefers to focus on the future, saying that while there are challenges in the short term, the medium to long term outlook for the economy is positive and strong.
“The PNG economy will continue to grow in real terms but at a slower pace, 2% to 3%,” Bakani said. “Inflation is projected to be in the range of 6% to 7%.”
Economists, less prone to adopt a self-interested position - should be able to provide a clearer and spin-free analysis later this week when they have had time to absorb the implications of a budget purportedly designed to dig PNG out of a fiscal hole.