By ISAAC NICHOLAS
THE National Government has started a major reform by putting in place new financial arrangements for fair service delivery in the provinces next year.
Treasurer and Finance Minister Patrick Pruaitch had started the ball rolling when he introduced amendments to the Organic Law on provincial and Local Level Government Bill in parliament yesterday.
The amendment provides the principles and framework for a new system that would ensure that each provincial government and local level government had a similar financial capacity to deliver a similar level of service.
The amendment went through the first reading with parliament voting 82 to 0 votes and since it was a constitutional amendment would go through the second phase in April.
“The new system will be in accordance with our second constitutional goal – for the equalisation of services in all parts of the country and for all citizens to have equal access to services,” Mr Pruaitch said.
He said the government had agreed to contribute extra funding for the recurrent costs of delivering services.
He said the extra money would be added into the new system to run over five years and directed to provinces that need it most.
“This means no province will be worse off in the new system. We are not robbing Peter to pay to Paul.
“However, we are looking after those provinces that need more,” he said.
He said six years ago, the Government realised that the organic law grants to provincial governments and local level governments were unaffordable and the formula was more than the Government could afford.
Mr Pruaitch said the most important of the findings was the huge disparity between provinces in terms of cost.
He said some provinces receive large amounts of revenue from mining and petroleum developments and others receive none.
He said some provincial capitals serve large commercial centres for neighboring provinces and receive large amounts of GST with remote provinces missing out.
“The remote provinces are usually the very ones that need most of the money, because their costs are higher,” he said.
Mr Pruaitch said the NEFC also found there was confusion about who was responsible for providing, which service, which means that sometimes services are not provided at all.
“This is not just a bit of housekeeping. This is one of the most fundamental and far-reaching reform measures undertaken in PNG,” Mr Pruaitch said.