Budget 2020: Resetting expectations?

A Budget provides an opportunity for a new Government to reset expectations, and make decisions that may be harder to undertake later in the electoral cycle. This is generally what we see in the Treasurer’s handing down of the Supplementary 2019 Budget in October and the current PNG 2020 Budget.

The Budget sets out the National Government’s 2020 Budget and Reform priorities. 

In summary, the document is based on:

• economic growth forecasts (i.e. gross domestic product (GDP) that are far more modest and are now aligned with third party forecasts)

• estimates for revenue and expenditure in the 2020 Budget that show higher expenditures and lower revenues than the 2019 Budget. 

The 2020 Budget introduces a number of new revenue measures with particular emphasis on increasing excise to enable the Government to meet its spending commitments while more closely addressing the policy priorities of the Marape-Steven Government.

This revision of the areas of focus has to a degree been reflected in some of the announced measures, but it is also likely to directly impact more generally on tax developments in the near term.