PNG's off-budget spending raises fears for sovereign wealth fund | Pacific Beat

And the ADB has urged the PNG government to deal with the problem before it sets up its new sovereign wealth fund.

The bank's economists say government spending during 2009 resulted in the total value of PNG's trust funds falling from around 3.5 billion Kina, or around 1.4 billion Australian dollars, to just 1.1 billion Kina.

The PNG government said the spending was necessary because of the global financial crisis.

But such big losses in just one year, have raised questions about how well it will manage the much larger revenues expected once new liquid natural gas projects get underway.

Asian Development Bank Economist, Dominic Mellor, told Jemima Garrett the PNG government spent 2.4 billion Kina worth of trust fund money in 2009.

Presenter: Jemima Garrett

Speaker: ADB's Papua New Guinea economist, Dominic Mellor