National Budget 2012

Education and Transport infrastructure take up the biggest chunk of the 2012 10-point-five billion Kina National Budget, which was brought down in Parliament, yesterday.

This is 720-million Kina more, than last year's allocation, which the National Government says, was designed to share wealth and empower people.

The National Government expects to fund the budget, mostly from taxes on income and profit, as well as grants.

Its spending will also be 632-million Kina more, than last year's, taken up by Free Education, Transport infrastructure, the 2012 National Elections, Health and Law and Order.

The Development Budget exceeds four-billion Kina for the first time, with major expenditure items being the 2015 Pacific Games, Umbrella Benefits Sharing Agreement and support for small to medium enterprise.

The National Government described the budget, as fiscally responsible and does not add to the risk of overheating the economy and increasing inflation.


GOVERNMENT REVENUE

A significant amount of the Government's 2012 revenue, will be made up of monies collected from taxes.

Revenue and Grants to fund the budget, will consist of total tax revenue of eight-point-five-billion Kina, non-tax revenue of 520-million Kina and Grants of one-point-four-billion Kina.

This is an increase of over 622-million Kina, from the 2011 revised budget of nine-point-eight-billion Kina in total. .

The National Government aims to source most of its revenue, from taxes income and profits, driven mainly by the strong growth in general economy.

The PNG Liquefied Natural Gas project and favorable global commodity prices, are also anticipated to contribute to the revenue intake.

2012 EXPENDITURES

Recurrent Expenditure, will take a bigger slice of the total Government spending in 2012, at six-point-one-billion Kina, a difference of 785-million Kina from 2011.

Development Expenditure follows, with four-point-four-billion Kina.

The key new funding priorities for 2012 are, Free Education, 2012 National Elections, and the 2015 Pacific Games.

Free Education takes up one-point-two-billion Kina, 2012 National Elections is appropriated 330-point-five-million Kina and Pacific Games is given 180-million Kina.

There is also increased funding to the key Medium Term Development Plan priorities such as, Education, Transport, Law and Order and Health.

2012 ECONOMIC OUTLOOK

The National Government, has projected the economy to grow by seven-point-eight percent in 2012, down from the ambitious nine-point-three percent, in 2011.

It attributes this to the P-N-G Liquefied Natural Gas project, passing its construction peak.

The Government however thinks, this is still strong, especially when it will be underpinned by growth in other sectors.

It also projected inflation for 2012 at seven-point-six percent, down from eight-point-seven percent in 2011, due largely to a moderation in real gross domestic product, including moderation in the construction phase of the L-N-G project.

NATIONAL ELECTION BUDGET

The National Government has allocated 330-point-five-million-Kina, for the 2012 National Elections.

The Electoral Commission gets 180-million-Kina, Police, 105-million-Kina, Defense, 35-million-Kina and Correction Services, nine-point-six-million Kina.

The National Government, says the funding is substantial because it wants the elections to be free, fair and safe.

This funding, is estimated to be four times over the cost of the 2007 National Election

TRAWEN ON EC BUDGET

Despite having not received the amount it requested for, the Electoral Commission says, this will not affect what is all set, for the 2012 National Elections.

Electoral Commissioner Andrew Trawen, says the Commission had request for 240-million Kina in the 2012 Budget for the elections, but was allocated only 180-million Kina.

TAXATION MEASURES

The National Government is to provide a major tax relief to ordinary Papua New Guineans, who earn 10-thousand kina and below, per annum.

The 10-thousand Kina tax-free threshold means, those who earn that amount and below per annum, will not be subjected to income tax.

The previous threshold was seven-thousand Kina.

The National Government says, those who earn above 10-thousand Kina, will receive an increase in their take-home pay of up to 660 Kina.

That law comes into effect, on July 1st, 2012.

This was among a number of tax measures the National Government introduced, under the 2012 National Budget.

PACIFIC GAMES

The National Government has allocated a total of 200-million Kina towards P-N-G staging the Pacific Games in 2015.

Finance and Treasury Minister Don Polye says, this is to show the Government's support toward the sporting event, as well as portray a positive image of the country within the region and on world stage.

20-million Kina of the total funding, will come from the 2011 Supplementary Budget, while the 2012 Budget will make available 180-million kina.

This is the third time P-N-G will host the regional sporting event and Mr. Polye says, the National Government is committed, to making it the best ever.

NBC NEWS

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