Transcript
PAUL BARKER: Well it was going to be a tough year anyway. We have had a couple of years when commodity prices have been low and the expectations related to the LNG haven't really been filled yet. So a big cut in revenue from the resource sector and from the wider sector. So at a time when the government really had to come to grips with this, try and restrain the burgeoning deficit - there is still a significant deficit that's envisaged for next year but they are clearly trying to restrain it. Yes it is a tough budget for all sectors, including the priority sectors - health, education, transport, infrastructure, law and order, they have all had big cuts even if some specific components to do with free education and free health have been sustained, but they are only small components of the total health and education budgets.
DON WISEMAN: In all of these areas, law and order, health, education - they have all been under enormous pressure over they last few years. Are they able to absorb even more cuts?
PB: Well as I say these are areas the government has given priority to and tried to build up the capability, but they are really struggling, struggling from the pressure of that free education which has increased the numbers of students going to school, so you have had these classes of 80 or so students facing a poor teacher out in a remote rural location, and who is not on great terms and conditions, and unless you provide the rest of the costs to support that education service, you have what many people have described as getting the kids, the seats and bums, but we are not providing them much in the way of a education. Now we do have the funds for the provinces and districts. That is one of the few areas where there hasn't been a cut.
DW: Why is that?
PB: Well it is a good question.
DW: There is an election next year - is that a factor?
PB: That is certainly a factor. You can certainly argue that provinces, as a sub-national entity, you are not meant to be chopping them around too much and it is a priority area of the government to be putting in funds to the sub-national level, which certainly had been neglected. Infrastructure declined over many, many years and needs to be built up. But it is an election year and obviously the members of parliament are going to be eager to have last minute opportunities to make amends. We were asking the government 'How are you going to manage because obviously the members of parliament are only going to be in the job - unless they win the election - they will be guaranteed to be in the job for only half a year or less than that in effect.' So important that the whole year's funds aren't used in their term and are tightly managed. And the Treasury Secretary did respond in the Budget lock up and said 'no no we will be releasing those funds very judiciously.' So we will see what that actually means.
DW: The critical thing I guess, given that there has been such an economic downturn over the last couple of years, is turning the economy around. Is this Budget going to make any effort in that direction?
PB: Two of the big areas of increased expenditure are of course, one, the election, because that has got to happen and PNG is one of the most expensive places in the world to conduct an election. The other area of increased expenditure is hosting this APEC meeting that they have ostensibly put 300 kina in next year's Budget for, and their argument for that is that it is going to attract tens of thousands of investors, but clearly they are only going to be interested investing if the right investment conditions prevail, including the right rules and welcoming features to be able not only to be viable as an investor but also to have security of tenure - that you are not going to have your business forfeited off you. So those are all going to be challenges, the Minister of Treasury did respond to concerns on that regard to say 'well look we will be reviewing those policies to make sure we are investment friendly, to domestic and international investors.
