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Can our budget help PNG in its crisis?

By Jeffrey Wall - posted Friday, 14 April 2023

It came as little surprise that the IMF has prescribed some tough medicine for Papua New Guinea.

The IMF has been very patient when it comes to economic and fiscal reform. The day of reckoning was inevitable though.

The toughest condition of the IMF's K3 billion loan to PNG is devaluation. Successive governments have long put that off.


The main consequence of a devaluation would be dearer imports. That would erode already low living standards.

Another is that taxes must be raised. That would be tough on business and a disincentive to investors.

Jim Chalmers is in the US meeting top officials, including the world bank and the IMF.

He might seek a briefing on the challenges PNG faces.

It will contain grim news. A weak economy, falling employment and ongoing forex problems.

The Foreign Minister is reviewing our aid program with PNG being the largest recipient.


I doubt there will be major changes in the federal budget in under four weeks. Reform will take time.

What the 2023-24 Budget should do is scale back the dozens of projects we fund with few questions asked about effectiveness or relevance.

The priorities in the $500 plus aid funding should be encouraging agriculture, helping resource the under-funded police force and implementing the defence force upgrade program.

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About the Author

Jeffrey Wall CSM CBE is a Brisbane Political Consultant and has served as Advisor to the PNG Foreign Minister, Sir Rabbie Namaliu – Prime Minister 1988-1992 and Speaker 1994-1997.

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