Friday, August 20, 2010

2010 budget sees K533.3 million surplus


THE 2010 budget would have a surplus of K533.3 million, 2.1% of the gross domestic product (GDP), according to current estimates released by Secretary for Finance and Treasurer Simon Tosali, The National reports.
Tosali said the estimated surplus was due to the strengthening of global economic recovery and strong domestic economic growth.
“The additional revenue of K533.3 available would be spent through a supplementary budget as government continues to have competing expenditure pressures such as the LNG commitments and legal obligations,” Tosali told participants at the three-day national development forum in Port Moresby organised by Consultative Implementation Monitoring Council (CIMC).
He said total expenditure was expected to be K7.6 billion this year, with K4.2 billion in recurrent budget and just over K2 billion for the development budget.
He explained the higher recurrent budget in 2010 reflected the expected overspends in personal emoluments, by national departments and provincial governments.
“The Department of Treasury has taken action by establishing a payroll project team to investigate the causes of these overruns … it has also written to the heads of those agencies seeking their explanations of their overruns,” Tosali said.
On the development budget, he said the increased development component is for the payment of remaining business development grants related to the PNG LNG project while grants and ITC had also increased this year.
Tosali said total government revenue and grants of K1.8 billion was a lot higher than the outcome last year and this due largely to the higher receipts from the mining and petroleum tax (MPT) collected in the first of the year.
The higher MPT estimate is due to an upward revision to commodity price assumptions.
“PNG’s economy is expected to strengthen this year with the commencement of PNG LNG gas project and other mining-related projects as well as a rebound in a number o sectors following softer conditions last year.
“In addition, growth is also expected to be supported by the improvement in global trade as commodity prices of PNG’s major exports strengthens on the back of growing confidence in the global economic recovery.”

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