NRI Director Dr Thomas Webster and PNG Treasury Minister the Hon Don Polye after the event.

PNG budget under the microscope

13 February 2013

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The Development Policy Centre is a think tank for aid and development policy based at the Crawford School. The centre researches and promotes discussion of aid effectiveness, the Pacific and PNG, and development policy.

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Papua New Guinea’s 2013 budget was in the spotlight at a special National Budget Forum jointly organised by PNG’s National Research Institute (NRI) and the Development Policy Centre’s Promoting Effective Public Expenditure (PEPE) in PNG Project.

The one-day forum on Thursday 7 February brought together experts from the centre with government representatives, to discuss the country’s 2013 budget which sees a large increase in devolved funding to PNG’s provinces, districts and local governments.

Senior PNG Cabinet Ministers, the Hon Don Polye, Minister for Treasury and the Hon James Marape, Minister for Finance, discussed the significant increase in devolved funding to PNG’s provinces and local governments – up from 5 per cent of the total budget last year to 15 per cent in 2013. The Ministers also detailed plans to monitor spending and ensure accountability.

Professor Stephen Howes, Director of the Development Policy Centre, told the forum that this increase, while welcome, could potentially put delivery of front-line services at risk.

“The huge increase in devolved spending to provinces and lower levels of government will fund more projects, rather than recurrent funding for front-line service delivery,” he said.

“While there have been welcome increases in priority sectors, especially for national roads rehabilitation and maintenance, there are also clear signs of front-line service delivery being squeezed. This will worsen in coming years if the projected slow revenue growth eventuates.

“For example, under reasonable assumptions, the number of teachers per student has already fallen to 80 per cent of its level a decade ago, and will fall to almost 50 per cent of that level by 2017 under current projections,” said Professor Howes.

The forum also heard from Andrew Anton Mako of NRI and PEPE Project Manager Colin Wiltshire of ANU. Mako and Wiltshire discussed progress on the research component of their project that looked at schools and health facililties in remote parts of PNG. Under the project, survey teams visited more than 200 schools and 150 health facilities collecting data to assess the performance of PNG’s new ‘free education’ policy.

Their presentation included some initial impressions from the survey including widespread dilapidation of facilities, the negative impact of poor roads and tribal fighting and some inspiring stories of retired teachers and health workers who continue to serve their communities when no other facilities or worker are available.

The forum attracted more than 120 participants from the private and public sector, civil society and PNG’s development partners.

The next ANU-NRI budget forum will be held on August 29, and will present full results from the PEPE survey.

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