The people of Papua New Guinea should be confident and optimistic about the nation's future, despite the current difficulties, the Prime Minister, Peter O’Neill said. Mr O'Neill said the 2016 budget is a responsible, fair and balanced response by the government to difficult times that would address short term problems while laying the foundations for strong economic and social growth in the future.
"Just last week the independent Bank of Papua New Guinea outlined changes to economic and business conditions that were largely beyond the influence or control of the national government," the Prime Minister said.
"In the June quarter the weighted average kina price for the nation's exports declined by 13.7 per cent when compared with the corresponding quarter of 2014. The price for mineral exports declined by 13.3 per cent, while agricultural exports were 16.8 per cent lower. We are a mining and agricultural export nation - dependent on world prices and world demand.
"When export prices decline by around 14 per cent in a quarter, the economic and social impact is massive.”
“But it is largely beyond our control - the more we export, the more international factors have an impact on our domestic economy, on government revenues, and on the income of our farmers and the community generally.”
PM O'Neill said the budget would make sound, balanced and fair adjustments to government spending in particular, and it would also impact on revenue projections.
The Prime Minister said inflation had declined, lending to the private sector had grown, and employment had risen even though there had been significant job losses resulting from the end of the construction phase of the nation's first LNG project.
"We are resource rich - and the prices of the minerals, oil and gas, and agricultural and forestry exports while generally low now will improve."
Mr O'Neill said Papua New Guinea is very well placed to take advantage first when commodity prices rise - and even better placed to meet the rising demand for energy and food from the nations of Asia with whom Papua New Guinea enjoys outstanding relations.
"I believe we can and must be confident about our future. The basics of our economy are strong - and we will benefit when commodity prices recover and the export environment grows," Mr O'Neill said.
"The national budget is aimed fairly and squarely at addressing current challenges - and laying the foundations for a stronger future in which the whole nation will enjoy the benefits," the Prime Minister said.
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