The Papua New Guinea Government is planning to cut income taxes by up to 400 kina, or 146 US dollars, a month.
It also intends giving public servants a cash handout in time for Christmas and will buy a new VIP aircraft.
The Treasurer, Patrick Pruaitch, who presented the Budget on Tuesday, also outlined plans for a National Infrastructure Development Programme to which one point eight billion kina, or 650 million US dollars, has been allocated.
Our correspondent Alex Rheeney says the government gave few details about its replacement for the Kumul, its present VIP plane, but have confirmed it will be a jet.
"It will cost the government 40 million kina and they have budgetted for it in the 2008 budget. When we asked about specifics what the aircraft will be, they didn't want to reveal the details. But it will definitely be a jet aircraft to replace the one that they currently have."