Cuts likely in PNG budget review

7:35 pm on 21 May 2015

Papua New Guinea's Treasury has indicated that a budget review is underway, and some cuts to departmental budgets are likely.

The Post Courier reports the review will be the basis of a Supplementary Budget that will be presented to Parliament for approval.

The Treasury secretary, Dairi Vele, says the review comes after dramatic falls in world commodity prices that have affected government revenue and PNG's international rating.

The ratings agency, Moody's, recently reaffirmed PNG's B1 rating, but downgraded the outlook to negative from stable.

Mr Vele says the whole world is undergoing a rebalancing with the fall in commodity prices and the government is looking at what it can amend in order to achieve growth, stability and prosperity, while ensuring essential services and infrastructure commitments remain.

Up until now, the government has insisted its budget assumptions were safe and that mineral and commodity prices would pick up, despite vocal calls from the opposition leader, and former Treasurer, Don Polye, for the budget to be reviewed.

Get the new RNZ app

for ad-free news and current affairs