BY GORETHY KENNETH
National Planning Minister Richard Maru is more than convinced that the 2018 Budget will enhance the preconditions for sustainable economic growth in the short to medium term.
Mr Maru said that for the first time in many years, the Government has increased the economic sector funding from 6 percent in 2017 to 15 percent in the 2018.
He said this confirmed to the Alotau Accord 2 to make economic growth the number one priority.
He said the aggregate 2018 Capital Investment Budget is K4,643.92 million. This shows an increase of 15.7 percent compared to the 2017 original budget appropriation. He said the Budget was strategically focused to invest in enhancing the preconditions for economic growth and prosperity, which will build on the remaining few years of O’Neill Government.
“This Government will mobilise necessary resources within the tight fiscal envelope to provide growth conditions to set the pace for future growth and development. The 2018 Capital investment Budget consolidate key interventions that will encourage business activities, generate employment, increase both export and tax revenues, replace import, and broaden and diversify our economic base strengthening renewable sectors and manufacturing.
“The commodity price fluctuations in the global market have had an adverse effect in our economy in the last three years and in my view we as Government have done very little in addressing the declining trend. If the global commodity price remains suppressed over the medium term with no new projects in the mining and petroleum sectors coming on stream over the same period, our country will continue to face fiscal constraints, prolonged current foreign exchange problems, which will affect the Government’s ability to effectively deliver public goods and services to our people.
“The 2018 National Budget provides the appropriate response of this Government to the current domestic and global economic challenges, focusing on the new measures to stimulate the broad-based economic growth while maintaining fiscal and macroeconomic stability.
“To arrest the declining trend in economic growth, some deliberate attempts were made by this Government particularly to ease the current cash-flow problem with the 100 Day Plan and also the proposed Bill on the Public Money Management arrangement. While these revenue raising measures are important, this Government is looking at sustainable growth measures.”