PNG Parliament on Tuesday passed a Supplementary Budget of over K1.6 billion aimed at relieving families from rising fuel costs, Goods and Services Tax (GST) on essential food items, and the impacts of emerging El Niño conditions.
The Supplementary Budget provides an additional K1.33 billion in forecast revenue, lifting total 2026 Government expenditure to a record K32.245 billion.
Related news: https://www.nbc.com.pg/post/39287/treasurer-tables-supplementary-budget
Despite the increase in expenditure, Treasurer Ian Ling-Stuckey said the budget deficit would remain at K1.608 billion, equivalent to about one per cent of GDP, while the debt-to-GDP ratio is expected to fall to just under 45 per cent.
Treasury Minister, while presenting the Supplementary Appropriation Bill 2026 in Parliament on Tuesday, said K1.11 billion would be directed towards fuel relief, while another K500 million would be provided for a national response to El Niño.
The fuel assistance package is intended to keep fuel prices frozen at March 2026 levels despite significant increases in international fuel prices linked to the Middle East crisis, he said.
He said the fuel package would cost at least K1 billion in direct subsidy assistance, in addition to about K110 million in reduced GST revenue.
He said the Government would also introduce amendments to GST legislation to remove GST from fuel as part of measures to ease cost-of-living pressures on households.
On El Niño, the Minister said the Government had already seen the effects of the weather conditions, including frost damage in the Highlands, damaged crops, falling water levels, and water tanks running dry in some island communities.
He said the K500 million national allocation would complement about K665 million already allocated at the district and provincial levels, bringing the overall El Niño support package to an estimated K1.165 billion.
The local funding includes K5 million for each of the 89 districts and K10 million for each of the 22 provinces.
The Government is also seeking up to K300 million in financing from the World Bank to support the El Niño response, although the Minister said this would require the declaration of a national emergency.
The Minister said the Government would fund its priority responses through increased revenue collections, higher dividend payments, and expenditure cuts elsewhere in the public sector.
He said strict controls would be introduced on travel and allowances, while some projects would be deferred until 2027.
Related news: https://www.thepngsun.com/supplementary-budget-to-fund-fuel-relief-el-nino-response-and-2027-election-says-pm-marape/
The Minister said the measures were part of the Government’s broader effort to protect households from global economic and weather-related shocks while continuing its programme of budget repair.
He said PNG’s economy was projected to reach K160 billion in 2026, with the Government remaining on track to achieve a budget surplus in 2027.