Photo: Supplied / EMTV
Papua New Guinea's Treasury Minister, Ian Ling-Stuckey, has announced budgetary support for households as well as a significant tax increase for banks.
The country's 2023 Budget is the biggest in its history.
Delivered by Ling-Stuckey on Tuesday at 24.5 billion kina, or $US6.78 billion, it included a deficit of $US1.34 billion, which is lower than last year's budget.
In January, the minimum wage threshold will be raised by more than 50 percent to $US5,586, while all excise on fuel will be suspended from January to June.
The government also expects to collect up to $US100 million in 2023 from a 45 percent tax it will impose on the banking sector.
But this increase is expected to affect dividend payments to superfunds which own shares in the banking sector.
Curbing round log exports
The Treasurer also announced funding support in the budget for a Biodiversity and Climate Change trust fund, created by the United Nations.
The funding will come from revenue generated from a 50 percent tax increase on round log exports.
In his budget speech, Ling-Stuckey said the $US8 million generated by the tax will be used as seed funding for PNG's climate change mitigation efforts.
The tax builds on existing efforts from 2020 to stop round log exports by 2030 and encourage downstream processing.
Round log exports account for nearly all of PNG's revenue generated from its forests.
Other notable points in the Budget
Annual earnings up to $US5,532 will be tax free.
There is a 28 percent increase in funding for law and order, $US111 million, much of which will go towards more recruits, to increase the size of the force by up to 40 percent by 2024.
Funding is being provided for the long demanded Independent Commission Against Corruption (ICAC).
There will be a substantial amount set aside for the district infrastructure programme, the building of roads and bridges and the like, something that is vital in a spread, isolated country, with few major roads.
This fund will be handled by MPs directly, in much the same way they now have discretion in spending of the funds allocated to the District Improvement Fund, a fund that draws criticism and has been widely known as a slush fund.
The Treasurer expressed his confidence the Budget will reach surplus in five years.