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| Treasury of Papua New Guinea | |
|---|---|
| Agency name | Treasury of Papua New Guinea |
| Formed | 1975 |
| Jurisdiction | Papua New Guinea |
| Headquarters | Port Moresby |
Treasury of Papua New Guinea is the central fiscal institution in Papua New Guinea responsible for formulating fiscal policy, managing public finances, and advising on macroeconomic strategy. The Treasury interfaces with ministries such as Department of Finance (Papua New Guinea), engages with multilaterals including the International Monetary Fund and the World Bank, and coordinates with national bodies like the Bank of Papua New Guinea and the Independent Public Business Corporation (Papua New Guinea).
The institution traces origins to administrative arrangements established during the Territory of Papua and New Guinea era and institutional transitions surrounding independence in 1975, interacting with colonial administrations such as the Australian administration and post-independence leaders including Michael Somare and Julius Chan. Through events like the Bougainville conflict and resource developments at projects such as the Ok Tedi Mine and the PNG LNG Project, the Treasury adapted policy frameworks in response to commodity shocks, working alongside international missions from the Asian Development Bank and bilateral partners including Australia and Japan. Fiscal crises in the 1990s and early 2000s prompted reforms influenced by frameworks from the International Monetary Fund and comparative models from countries such as New Zealand and Fiji, while legislative milestones involved cooperation with the National Parliament of Papua New Guinea and oversight from the Auditor-General of Papua New Guinea.
The Treasury formulates fiscal strategy, prepares national budgets for submission to the National Parliament of Papua New Guinea, and issues guidance on public expenditure akin to mechanisms used by ministries in Australia and Singapore. It provides macroeconomic forecasting tied to commodity sectors like liquefied natural gas developments at Hides (Papua New Guinea) and mineral operations at Porgera Gold Mine and Lihir Gold Mine, advising ministers such as the Minister for Treasury (Papua New Guinea). The agency manages sovereign liabilities, debt strategy with creditors including the Asian Development Bank and private bondholders, and ensures compliance with statutes such as appropriation acts passed by the National Parliament of Papua New Guinea.
Organizationally, the Treasury is structured into divisions comparable to counterparts in New Zealand Treasury and the United Kingdom HM Treasury, with units responsible for budget policy, debt management, economic analysis, and revenue forecasting. Senior roles interact with central bank counterparts at the Bank of Papua New Guinea and with procurement and state enterprise oversight mechanisms like the Independent Public Business Corporation (Papua New Guinea). The institution coordinates with provincial administrations such as those in Eastern Highlands Province, Morobe Province, and Milne Bay Province to align subnational fiscal frameworks with national priorities.
The Treasury prepares the national budget, revenue estimates, and medium-term fiscal strategy documents presented to the National Parliament of Papua New Guinea, integrating scenarios informed by commodity price indices tied to markets in Hong Kong, Singapore, and Tokyo. It manages fiscal buffers and contingency planning in contexts influenced by projects like PNG LNG Project and revenues from companies such as Oil Search and the Porgera Gold Mine consortium, and interacts with multilateral lenders including the World Bank and the International Monetary Fund on program conditionality and surveillance. The Treasury also administers fiscal rules and austerity measures when required, coordinating with executive offices including those associated with former prime ministers such as Peter O'Neill and James Marape.
While tax administration is operationally conducted by agencies influenced by frameworks from the Australian Taxation Office and regional peers like the Inland Revenue Department (Fiji), the Treasury sets revenue forecasts, tax policy proposals, and customs-related strategies in liaison with bodies such as the Internal Revenue Commission (Papua New Guinea) and the Customs service of Papua New Guinea. Revenue streams from extractive industries—royalties and profit taxes from sites like Ok Tedi Mine, Porgera Gold Mine, and petroleum fields in the Papua New Guinea LNG project area—are central to cash-flow management, requiring coordination with corporate actors including ExxonMobil and regional traders in Singapore. The Treasury administers sovereign accounts and cash management systems similar to practices in the International Monetary Fund guidance and collaborates with banks such as the Bank of South Pacific.
In external engagement, the Treasury negotiates lending arrangements and technical assistance with the World Bank, International Monetary Fund, Asian Development Bank, and bilateral partners such as Australia, Japan, and China. It manages program loans, budget support instruments, and project financing for infrastructure tied to initiatives like the Hydropower projects in Papua New Guinea and engages with investors attracted to minerals at Lihir and hydrocarbons at Hela Province. The Treasury participates in regional forums including the Pacific Islands Forum and coordinates aid flows from entities like the United Nations Development Programme and the European Union.
The Treasury faces challenges from volatile commodity revenues driven by global markets in London and New York, governance issues highlighted in audits by the Auditor-General of Papua New Guinea, and the fiscal pressures of service delivery across provinces such as Western Province and Autonomous Region of Bougainville. Reform priorities have included strengthening public financial management, modernizing debt management systems, and enhancing transparency through initiatives inspired by the Extractive Industries Transparency Initiative and best practices from New Zealand and Australia. Engagements with the International Monetary Fund and the World Bank continue to support policy reforms, while domestic political dynamics involving leaders like Michael Somare and Peter O'Neill shape implementation timelines.
Category:Government agencies of Papua New Guinea