26 Sep 2003

PNG cuts spending amid income shortfall

10:32 am on 26 September 2003

The Papua New Guinea government says it will cut spending by 30 million US dollars amid severe budget problems.

The acting finance minister, Sinai Brown, says there has been a shortfall in revenue in part because a planned state asset sale has failed to meet expectations and a 35 million dollar loan from the Asian Development Bank has not been released.

He says cuts will be applied in a judicious manner but will not affect key services such as health, police and the judiciary.

The government has also borrowed on the domestic market which led to an increase in the yield of treasury bills.