PAPUA New Guinea's cash flow crisis is so bad that politicians and public servants are not being paid on time, vital services are not receiving funding and government cheques are bouncing.
Latest figures from the International Monetary Fund show the country's debt is worse than officially acknowledged and government spending commitments have been significantly underestimated.
The new revelations come as PNG seeks to refinance its controversial $US1 billion UBS loan for its 10% stake in PNG-focused company Oil Search. The existing loan is set to expire at the end of the month.
Like many other resource-rich countries, PNG has seen its tax revenue plummet as mining and petroleum companies try to deal with low commodity prices.
PNG's Opposition Leader and former treasurer Don Polye told the ABC's Pacific Beat program that opposition and government MPs as well as at least four government ministers are suffering shortfalls in their wages.
"One of these is a senior minister who actually told me he had not been paid in full since September last year," Mr Polye said.
Shortfalls in funding for government and church-run schools and government health clinics also started to bite in September.
In December, teachers were not paid expected holiday fares to go home to visit family.
The latest public servants to be hit are staff of the PNG's National Broadcasting Corporation.
Popular Oro province Governor Gary Juffa told online news service PNG Loop that NBC workers have now been waiting one week for their fortnightly wage, the first time delays have exceeded two days.
Many of the workers pay high rents and support extended family.
"This is alarming ... what is the reason for the delay?" Mr Juffa asked. "The Government must explain the delay and assure the country of its finances."
As PNG struggles to pay its bills, a new analysis of the latest IMF figures shows the country's debt is worse than officially acknowledged.
The 2016 budget expects public debt to reach 35% of GDP in 2015-2016, but that does not include debt owed by state-owned enterprises, superannuation arrears or loans from investment bank UBS for PNG's Oil Search shares.
When these are taken into account total public debt is much higher — 56% of GDP — according to Lowy Institute Research Fellow Jonathan Pryke.
The cost of servicing PNG's acknowledged debt is set to treble from 2012 to 2016 and is already more than 10% of government expenditure.
"So much money has now been funnelled straight into debt-servicing and debt repayments that the Government actually has far less money to focus on the key components of governance which is delivering services [and] paying wages," Mr Pryke said
"It has really exacerbated this cash flow crisis."
More nasty surprises could be in store
The cost of PNG's plans to host an expected 10,000 delegates for 180 meetings at the APEC leaders' summit in 2018 is raising questions.
The IMF estimates K3 billion (nearly $A1.4 billion) will be needed for infrastructure, security and entertainment — almost as much as the K3.5 billion budget for health over the next three years.
So far PNG has budgeted K80 million for APEC.
To cope with the cash flow crisis the government has announced cuts to health and education.
"Education expenditure is being slashed by 20% this year and 20% next year, health is being slashed by 1% this year but in 2017 it will be slashed by 40%," Mr Pryke said.
"None of these numbers stack up as being credible in terms of ... spending so much money on APEC."
More questions are being asked about the PNG government's plans to raise hundreds of millions of dollars to fund its deficit through a sovereign bond issue and about its planned refinancing of the UBS loan.
With domestic liquidity almost non-existent and overseas interest subdued, the bond issue due last November was delayed.
Its future is unclear but it is expected to go to market mid-year.
The UBS loan could be decided within days. PNG is keen to push ahead with refinancing and keep its Oil Search shares but economists are doubtful.
"Many people would argue that the state really should concentrate on its core functions of providing law and order, health, education, infrastructure maintenance and so on," Paul Barker, executive director of the PNG Institute of National Affairs, said.
The original UBS loan cost PNG dearly and a new one is likely to, too.
But, if PNG exits Oil Search now, it will take a big loss.
The Oil Search share price has rebounded strongly in the last week but at $7.33 it is still a long way off the $8.20 the PNG Government paid just over a year ago.
PNG's Prime Minister Peter O'Neill and Treasury Secretary Diari Vele are expected to address a leaders' summit in Port Moresby today.