Delivering services through politicians in PNG Experiments in markets and services panel: 2014 State of the Pacific Conference Colin Wiltshire

Spending though politicians in PNG is high by international standards 2 (Howes & Sofe 2014, PNG Budget Forum)

Development funding for politicians Open electorate MPs have received discretionary and non- discretionary funding, such as: –Electoral Development Funds; –District Support Grants. Claims PNG politicians have misappropriated hundreds of millions of kina of development funding (Ketan 2007) MP directed grants can increase pressure on politicians to reward clan-based support for elected officials (Reilly 1996; Regan 1997; May 1998; Allen 2010) 3

District Services Improvement Program (DSIP) Is DSIP an extension of direct payments to MPs or a genuine development program? The limited research on DSIP shows large variations in how funds have been used across districts (May and Haley 2006). 4

Joint District Planning Budget Priorities Committee (JDPBPC) Funding decisions are determined by majority vote Open MPs can select community representatives on the JDPBPC LLG Presidents within the electorate are represented Open MPs with community representatives can normally determine project allocations 5 Community Rep LLG President Open MP Community Rep Community Rep LLG President Typical membership of JDPBPC

Previous DSIP spending DSIP Remaining BalancesNumber of districtsPercentage Under 100, ,000 – 1 million million – 3 million million – 5 million million – 8 million million – 10 million million plus22.2 (PNG Treasury 2012 – Balances at September 2012) K20 million in total was paid into DSIP Trust Accounts over a five- year period (2007 – 2012). Remaining balances in DSIP trust accounts were close to K315 million after the 2012 election.

In many electorates, previous DSIP funding had not been spent.

Was DSIP funding spent effectively? Perspectives of schools and health facilities

9

Devolved funding allocations in 2013 & 2014 Allocations to Sector Improvement Programs (2013 & 2014 National Budget): District Services Improvement Program: K10m each (K890m) LLG Service Improvement Program: K500,000 each (K156.5m) Provincial Services Improvement Program – K5 million per district (K445m) NEC Decision, No.102/2012: SIP funding to be spent in the following proportions: 30% Infrastructure Services Support; 20% Health Services Improvement; 20% Education Services Support; 10% Law and Justice Services; 10% Economic Sector Support; and 10% Administration Support; 10

Challenges to spending SIP funds Hon. James Marape, PNG Finance Minister: ‘I must be the first to admit that capacity has been and is always is a big, big, big concern for many of our districts. But we may as well have misspending happening at the districts and provinces then it has been happening at Waigani and Vulupindi House where me and my secretary operates.’ (PNG Budget Forum, 2013) Hon. Don Poyle, PNG Treasurer: ‘It is time to empower our sub-national governments. To trust them. To allow them to serve the people.’ (PNG Budget Forum, 2013) 11

12

District Development Authorities 13 PNG’s Prime Minister authored an ANU SSGM discussion paper in 2006 proposing District Authorities. –District Development Authorities Bill passed Parliament 92 – 0 in late ‘Mr. Speaker, as a direct response to the cries of our people in rural areas in the 2013 Budget: Provincial Governments and Local Level Governments received significant amounts of development funding for the districts… ‘ ‘Finally money was being paid directly to where it matters the most – districts and Local Level Governments.’ (Hon. Peter O’Neill 2013, PNG Parliament)

District Development Authorities Bill: October 2013 (Draft) 24: MEETINGS (6) the secretariat of a Board must record and keep minutes of the meetings of the Board, and display any resolution of a meeting of the Board on a Public Notice at the Office of the District Administration. 30: ANNUAL REPORTS (2) A copy of the annual report must be available for inspection by members of the public free of charge at the office of the District Administration. 14 ‘DSIP has allowed the PM to manipulate MPs in parliament’ Hon. Samuel Basil 2014, Facebook Page ‘DSIP has replaced without fear or favour with fear and favour!!!’

Conclusion Are politically driven services and governance arrangements becoming legitimised in PNG? ‘The provincial government system will become a giant electoral development fund’. (Hon. John Momis 1995, PNG Post Courier) 15