Department of Treasury PNG 2024 Budget Live Parliament Session

In a highly anticipated event during today's live streaming of the PNG Parliament sitting on the 28th of November 2023, Treasurer Ian Ling-Stuckey presented the 2024 Budget, themed "Securing Our Future." The Treasurer highlighted key aspects of the budget, emphasising the government's commitment to responsible financial management.

Key Budget Figures:

• Total Budget: A substantial K27.3 billion, marking a K2.8 billion increase from the 2023 budget.
• Revenue: A significant boost to K23.3 billion, surpassing the 2023 figure by K3.8 billion.
• Deficit: Despite the substantial budget, a disciplined approach resulted in a deficit of K3.9 billion.
• Capital Budget: Allocating K10.7 billion for crucial infrastructure and development projects.
• Priority Sectors: Noteworthy allocations include K6.67 billion for Health and Education, K1.2 billion for Power and Water supply, and K1 billion for the Connect PNG initiative.
• Household Assistance: A K440 million package to address cost-of-living pressures on families.

Education Investments - Key Points:

• The government is significantly boosting investments in health and education with a substantial budget of K6.67 billion in 2024.

• K4,081.6 million has been allocated for education, representing 14.9% of the total government budget.

• The Government Tuition Fee Subsidy Scheme (GTFS) has witnessed a substantial increase from K764 million to K851 million.

• An extra 3400 teachers will receive support with a 5% increase in funding, contributing significantly to the improvement of education services.

Department of Treasury PNG Treasurer's Vision

During his parliamentary address, Treasurer Ling-Stuckey emphasised the government's dedication to fiscal responsibility. 

He outlined a plan for budget repair with the goal of returning to a surplus by 2027, further aiming to clear all debt by 2034.

Importantly, the government is supporting (and needs to strengthen) the key institutions within the Department of Education and the Department of Higher Education to ensure the effective utilisation of this substantial investment.

Economic Growth and Prosperity

The Treasurer expressed confidence in the nation's economic trajectory, projecting growth from K111 billion in 2023 to an impressive K122 billion in 2024. 

Ling-Stuckey highlighted the remarkable non-resource growth, maintaining levels of:

• 5.2 percent in 2022, 
• 4.5 percent in 2023, and 
• 4.7 percent in 2024. 

This sustained growth, he noted, is historic, occurring for the second time in PNG's post-independence era.

Challenges and Acknowledgments

Ling-Stuckey acknowledged challenges, recognising that not everyone feels the benefits of the economic surge. He acknowledged struggling businesses, job scarcity, and the persistent cost-of-living pressures many families face. 

Despite these challenges, the Treasurer assured the public that the government remains focused on delivering essential services and addressing the needs of the community.

Conclusion:  PNG 2024 Budget 

As the live-streamed parliamentary session came to a close, the Treasurer's speech painted a comprehensive picture of the 2024 Budget, reflecting a commitment to fiscal responsibility, economic growth, and social well-being in Papua New Guinea.

Education Money: 

The allocation of K6.67 billion to both health and education in the 2024 budget is commendable, signalling a commitment to the well-being and education of the people. 

Importantly, it is crucial for the government to strengthen institutions like the Department of Education and the Department of Higher Education. Robust checks and balances, along with regular inspections, monitoring, and transparent reporting, are essential to ensure accountability and effective use of the allocated funds. 

While the significant increase is promising, a thorough system of oversight will help guarantee that the money is utilised efficiently for the benefit of the community.

How to Invest in Stocks and Bonds in PNG: A Beginner's Guide

Papua New Guinea (PNG) is a rapidly growing economy that offers opportunities for investors who are willing to take on some risk. Investing in stocks and bonds in PNG can be a great way to diversify your portfolio and potentially earn high returns. 

In this beginner's guide, we'll cover everything you need to know about how to invest in stocks and bonds in PNG.

Choose a Broker

The first step in investing in stocks and bonds in PNG is to choose a broker. There are several reputable brokers in PNG, including 

• Kina Securities, 
• BSP Capital, and 
• Capital Markets. 

It is important to choose a broker that is licensed and regulated by the Bank of PNG to ensure that your investments are safe and secure.

Understand the Fees

When you invest in stocks and bonds in PNG, you will incur brokerage fees, which are charged by the broker for executing trades on your behalf. 

Brokerage fees vary depending on the broker and the size of the trade, but they typically range from 0.25% to 1% of the trade value.

Know the Stocks Available on POMSoX

The PNG Stock Exchange (POMSoX) is the only stock exchange in PNG, and it lists several companies in various sectors, including banking, telecommunications, and mining. 

Some of the stocks available on POMSoX include:

• Bank South Pacific Limited (BSP), 
• Credit Corporation (PNG) Limited (CCP),
• NGIP Agmark (NGP)
• Kina Securities Limited (KSL),
• Newcrest Mining Limited (NCM) and
• City Pharmacy Limited (CPL).

Check out the complete list of companies on POMSox website. 

If you want to find out how to invest in stocks, check out this article I wrote in 2017.

Differentiate Between Stocks and Bonds

Stocks and bonds are two different types of investments that offer different benefits and risks. 

Stocks represent ownership in a company and offer the potential for high returns but come with high risk due to market volatility. 

Bonds, on the other hand, represent debt and offer a fixed rate of return but come with low risk due to their stability.

Understand Government Bonds

Investing in government bonds is a low-risk investment option that offers a fixed rate of return over a set period. 

The Papua New Guinea government issues several types of bonds, including Treasury Bills, Inscribed Stock, and Inscribed Stock Indexed. 

These bonds can be purchased through a broker, and the minimum investment amount is usually PGK 5,000.

Visit the Central Bank of PNG website for more info on Treasury Bill and Government Bond.

(Screenshot Central Bank of PNG Bills and Bonds Rates)

SWOT Analysis of Stocks and Bonds Investments in PNG

Strengths:

• High potential returns in a growing economy
• Diversification opportunities to spread risk
• Government policies to promote investment

Weaknesses:

• Market volatility with fluctuating prices
• Limited options and lack of reliable information
• Currency risk due to exchange rate fluctuations

Opportunities:

• Growing economy with abundant natural resources
• Infrastructure development priorities
• Emerging markets for new investment opportunities

Threats:

• Political instability and natural disasters
• Currency risk and exchange rate fluctuations

Conclusion

Investing in stocks and bonds in PNG can be a lucrative opportunity for investors who are willing to take on some risk. 

By following the steps above, investors can choose a reputable broker, understand the fees, research available stocks, differentiate between stocks and bonds, and understand government bonds. 

With careful consideration and a long-term investment strategy, investors can potentially earn high returns in a growing economy. 

However, it is important to be aware of the risks and threats associated with investing in PNG and to seek advice from professional brokers before making any investment decisions.