Treasurer Ian Ling Stuckey told Parliament that K5.7 billion was spent as part of an economic recovery plan on "the economic battle."
He explained that the money was not solely spending on COVID-19 and that the government had invested K2.5 billion in COVID-19 bonds and K1.5 billion in friendly international assistance.
Mr Ling-Stuckey said K600 million had been set aside, and the government had “built another K600 million on COVID-19 in 2022” into its budget projections.
On COVID-19, he said, there were two wars: a health war and an economic war. Mr Ling-Stuckey claimed that the majority of the K5.7 billion was spent on the global war as a relief package rather than a COVID-19 health program.
The elements and results of the K5.7 billion economic stimulus program, he said, included:
- K2.5 billion COVID-19 bonds – Amid the vulnerable, once-in-a-generation challenge to capital markets, all of these bonds were successfully collected. There was a possibility that the COVID-19 economic impacts may have prevented these bond proposals, which were already included in the 2020 budget, from raising the necessary funds.
- K1.5 billion in friendly international assistance – met. The people of Marape have faith in the government. Budget funding collections totalled K4.4 billion in 2020. Thanks to COVID-19, some of the 2020 budget funds were no longer available, most notably the loss of nearly K1 billion expected for the ADB partial credit guarantee due to poor foreign market conditions. However, we were able to receive K1.26 billion from the IMF, K877 million from the ADB in a revised COVID-19 aid program, an expansion in our ADB health package to K528 million, the completion of SOE reforms for K351 million, and agreements with Australia for a new, low-cost, longer-term loan of K1.383 billion. K1b, a valued Japanese aid, was also present. This is a benefit of more flexible, straightforward, and accountable budgeting. This has aided in the repayment of previous high-cost debts, such as the Credit Suisse loan. More critically, it has backed up existing calls to boost healthcare spending and protect the economy from COVID-19-related shocks. This funding is used to finance the whole budget;
- K6 million credit line from BPNG, which was obtained by lowering the cash balance requirement – was surpassed, with BPNG signaling that much more was given. The declines in cash balance requirements totalled K643 million, according to BPNG.
- K500 million in cash flow for people who lose their work due to regulatory reforms that provide for early access to superannuation. Preliminary estimates indicate that withdrawals have risen by more than 20%, with more funding expected; –
- K5 million real budget spending – later increased to K6 million – preliminary findings show that K508 million was spent.
“In total, of the K5.2b, we exceeded the target by nearly K3b in friendly foreign support and K43m from the BPNG credit line – due to the renewed confidence in the PNG economy by our international partners.”
