O’Neill Warns Parliament of Inflated Projections, Underfunded Services, and Unsustainable Debt

O’Neill Parliamentary Response to 2026 Budget: Service Failures and Spending Risks

By PNG Herald Political Desk

PORT MORESBY: Former Prime Minister Peter O’Neill has delivered a forceful response in Parliament to the 2026 National Budget, warning that the Government is overpromising, overspending, and underdelivering on basic services for Papua New Guineans.

In a wide-ranging address, O’Neill questioned the credibility of revenue projections and criticised the Government for running up debt to finance what he described as “political interpretations of prosperity” while core public services remain underfunded.
“Each year, the budgets are bigger — but our people are getting less,” he said.
O’Neill acknowledged the Treasurer and Treasury officials for presenting the record K30.9 billion budget, but accused the Government of inflating its income expectations and drawing heavily from State-Owned Enterprises and resource companies without clear strategy or long-term benefit.

He warned that massive allocations were being made to pipeline resource projects like Papua LNG and Wafi-Golpu before Final Investment Decisions were confirmed, and said this approach was costing taxpayers “hundreds of millions of kina” while essential sectors like health, law and order, and education continued to deteriorate.

“We are borrowing more and more, not to build, but to consume,” O’Neill said.

Drawing comparisons with past governments, O’Neill reflected on the structural reforms introduced under the late Sir Mekere Morauta in the early 2000s, and defended the use of deficit budgets during his own tenure — arguing that deficits are not inherently bad when used to develop national infrastructure.
He said that while public debt stood at K9 billion when he came into office in 2011, it rose to K26 billion by 2018 under his leadership — which he said was due to deliberate investments in roads, hospitals, schools and connectivity infrastructure. In contrast, he argued, the current rise to over K60 billion in public debt has not translated into visible economic transformation.

“We left it at K26 billion. Today it’s more than K60 billion — and where is it going?”
O’Neill raised concerns about interest repayments now exceeding health spending, stating that PNG is paying over K4 billion annually in loan interest while health services receive only K3.2 billion. He said this imbalance reflects deeper fiscal mismanagement.

The Ialibu-Pangia MP also warned against raiding SOEs and mineral companies for quick revenue, citing the government’s demand for K2 billion in dividends from Kumul Petroleum and K850 million from Ok Tedi Mining.

“When resource prices are high, we should be saving — not stripping them bare,” he said. “These minerals will run out. What will we have left for future generations?”

O’Neill described the projected 4.2% growth figure as artificial, saying it was being driven by record-high gold, oil and gas prices rather than domestic productivity or employment. He called for more job-creating projects, rather than “relying on global prices to do the heavy lifting.”
He also criticised government interference in institutions like the Internal Revenue Commission (IRC), claiming proposed oversight measures would undermine its independence.
“When institutions work, leave them alone,” he said. “We must not politicise our revenue systems.”
Closing his remarks, O’Neill warned that the country must not be lulled into complacency by temporary resource windfalls.
“The price boom won’t last forever. We must save while we can — and prepare for when it ends.”

Background: Presentation of the 2026 Budget

• The 2026 National Budget was officially tabled in Parliament on 25 November 2025. Treasury PNG+2NBC PNG+2
• The decision to present the Budget was confirmed after a cabinet announcement on 19 November 2025, which moved the Budget delivery to the following Tuesday (25 November) to allow time for final fiscal numbers to be prepared. pmnec.gov.pg+1
• At the time of presentation, the Budget totalled K30.9 billion — the largest in PNG’s history. NBC PNG+2Deloitte+2
• The theme given to the 2026 Budget was “Security with Growth” — signalling a focus on both national security (law & order, stability) and economic development. KPMG+1
• According to official Treasury projections, the Budget for 2026 aims to rely heavily on domestic revenue (rather than new taxes) and seeks to reduce the fiscal deficit as part of a broader medium-term fiscal strategy.

About the Author:

Christina Kewa- Swarbrick

Publisher- Christina Kewa-Swarbrick has over 20 years experience in the Media Industry and over 10 Years in Prophetic Engineering. She's a Holistic Life Solutions Coach, who combines her lived knowledge and experiences and her professional industry knowldege to help others. She's the founder of VISION4040 (PNG) and DBUM Bible Technology, a spiritual mapping system unlocking destiny blueprints . To engage her professional services go to this link: cks.vision4040.com