This follows the National Executive Council approval of two major elements of the Government’s K5.7 billion coronavirus Economic Stimulus Package.
“This is K100 million more than initially planned to ensure the Marape-Steven Government can respond flexibly in this war against this hidden virus,” stated the Treasurer.
K280 million will go towards health and security measures, and K320 million will be spent on supporting the economic sector - agriculture, households and business.
“The K600 million is a significant and timely boost to front-line support for our fight against coronavirus,” he said.
“The spending is carefully targeted to have the biggest impact possible across all geographic regions and economic sectors, and builds on initiatives that we have already taken. This will not be a Port Moresby centred, big business response – the needs are across our country, including for our households, our farmers, our MSMEs.”
Treasurer Ling-Stuckey said the support for the COVID-19 Bond has been vital for immediately moving the approved funding through to extra cash for the front-line agencies fighting the COVID-19 war.
The funding for the initial COVID-19 Bond issuance will allow the release of the first tranche of COVID-19 direct funding, backed up by allowing key parts of the 2020 Development Budget to commence. This will include K100 million of the K200 million allocated in the 2020 Budget for MSMEs, an amount on top of the K45.5m allocated to MSMEs as part of the COVID-19 package.
“We now have the funding necessary to accelerate innovative, forward-looking measures to help contain the spread of the virus and to provide relief to all sections of society from the financial and economic problems we are suffering. A second COVID-19 Bond is being released this week.”
The Treasurer said of the K600 million, K280 million will go to health, the security services, Customs and Foreign Affairs and Trade:
HEALTH AND SECURITY – K280 MILLION
- K60 million for upgrading hygiene at potential coronavirus hotspots such as markets, schools, churches and aidposts, to be administered by Provincial Health Authorities and District Development Authorities;
- K37 million to be distributed directly to front-line Provincial Health Authorities as a 22 percent increase in each of their 2020 Budget funding allocations;
- K30 million for the Department of Health for the purchase of Personal Protective Equipment and other vital health support using international procurement practices as established by the World Bank;
- K60 million to the Royal Papua New Guinea Constabulary, the Defence Force and Correctional Services to strengthen law and order aspects of the war on the pandemic, and to defend our borders against potential disease carriers;
- K73 million to the Defence Force to build 10 border posts as soon as possible, including covering the functions of immigration, customs, quarantine and defence;
- K15 million to the Department of Foreign Affairs and Trade to build capacity at overseas posts and to help repatriate Papua New Citizens trapped abroad; and
- K5 million of administrative support for churches and city/urban authorities to provide food for those most in need.
“These funding initiatives will also be supported by other elements of the Economic Stimulus Package, including low-cost foreign funding such as the K70 million being provided by the World Bank for Personal Protective Equipment and increased health funding from bilateral partnerships.”
AGRICULTURE, HOUSEHOLD AND BUSINESS SUPPORT – K320 MILLION
- K113 million for districts and provinces to promote agriculture development and food security through an outreach campaign and grants for improved crop production;
- K50 million as a price support program for agriculture export crop production directed at small cash crop producers especially in the coffee, cocoa and copra industries initially;
- K45.5 million to support rural MSMEs and households, enabling districts and provinces to undertake responsive MSME activities such as market improvements and small business training;
- K41.5 million as an additional Business Stimulus Package to protect jobs, focused on removing fees and charges to cheapen logistics and freight, while also retargeting actions without additional cost to prioritise paying outstanding government debt to small business, introducing more friendly tax measures and simplifying the application of corporate law;
- K70 million for additional economic stimulus activities to be determined by the Treasurer in consultation with other agencies and business.
“These are very practical, effective, responsible and affordable ways of helping Papua New Guinea get through this crisis,” Ling-Stuckey said. “They help people and businesses of all shapes and sizes and in all parts of the country without putting our future financial stability at risk.
“As outlined in my Ministerial Statement to Parliament, this is the direct budget funding elements of the package. There are many other elements of the pandemic support package.
“NEC has approved the Emergency Controller authorising members’ early access to their own superannuation contributions and we expect that order will be released shortly – injecting an estimated K500 million of economic support.
“We are continuing to monitor how banks are providing the loan repayment deferrals for businesses – estimated at K600 million of economic support – and we will do more in that area working with the MSME Council and relevant government agencies.
“We are working very closely with Independent Consumer and Competition Commission to control price increases. Indeed, we are working with them to lower prices in areas such as the announcement last week of massive reductions in fuel prices. There will be targetted support for lowering freight costs as part of the package, but this massive drop in fuel prices through the ICCC will be worth much more.
“I would like to thank my Ministerial Economic Committee member colleagues for the hard work they have put into helping design the package, and the support of the wider Marape-Steven ministerial team. We have taken a sensible approach. We have been responsive, listening carefully.
“The approach is responsible – we have had to rely primarily on other policy actions such as monetary policy given the economic mismanagement of previous years. How much more we could do if we hadn’t been left with such huge economic and budget holes!”
“This cleverly targeted direct budget funding as part of the wider Economic Stimulus Package will not only protect Papua New Guinea now, it will serve as the foundation for future growth when we win the war on coronavirus. I will be releasing more details on each element of the direct funding package over coming days,” added Treasurer Ling-Stuckey.