by Delly Bagu – EM TV, Port Moresby
In an interview with EM TV today, Director of the National Research Institute, Dr Thomas Webster, explained that the national budget is the government’s revenue and expenditure plan for the year. It needs to be adjusted throughout the year.
“If you say that the revenue you expected to raise [is] not coming in, the expenditure will also be affected,” Dr Webster said.
In a revisit of this year’s massive K15 billion budget, Dr Webster highlighted that when the government presented the 2014 budget, it anticipated a recovery of the global economy.
“That has not happened; it’s struggling and as a result, our commodity prices are not at their expected levels,” Dr Webster explained.
What concerns Dr Webster is that in its mid-year report, the government has indicated a revenue deficit of K372 million.
Dr Webster suspects that the total revenue deficit by the end of this year will be around K400 million if there are no improvements from revenue-generating sources such as state-owned entities and the sale of assets.
“So what I’m saying is we may have shortfalls in revenues, and that revenue shortfalls may increase,” he said.
Dr Webster is also concerned that the government is adamant it will still maintain the current level of expenditure.
“Now that’s a very difficult call. So what they mean is [that] they will still maintain the level of expenditure but they will now try to borrow more in order to meet that shortfall. So the borrowing is going to increase.”
Dr Webster said there is therefore more pressure on the budget than expected. He hopes that the government will be more responsible in the next budget.
“If the government keeps borrowing… It will put the country at risk.”