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PNG FISCAL WOES - WHERE IS ALL THE MONEY?

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by STEPHEN HOWES - DEVPOLICY BLOG There are widespread reports these days from Papua New Guinea of budgetary difficulties, from budget cuts to  church health services  to  government salary payment delays . Why? Total expenditure is budgeted in 2016 to be slightly below the 2015 level. But it is still 50 per cent above 2012 levels. (With the change in accounting rules, it is difficult to make comparisons going back before 2012.) That’s massive growth. So what is the problem? There are three. The first is a big shift in allocations. Since 2012, there have been big increases in interest payments (due to increased borrowing), payments to MPs through district and provincial funds, payments to schools (in lieu of school fees), and compensation to employees. Deduct these and there is an 18 per cent increase in spending compared to 2012 to fund everything else, which includes critical things like maintenance and church health spending. That’s the “discretionary spending” shown in Tab