A balanced, responsible money plan

 TREASURER Don Polye yesterday handed down what he termed as the “most modern and most transparent” budget that Papua New Guinea has ever produced.

It is the first PNG budget to reach over K15 billion, up by K1.8 billion or 13.8 per cent from the K13.2 billion in the 2013 revised budget.

And for the first time, the expenditure and development components have been combined into a single fully integrated multi-year budget.

The theme of the 2014 money plan is “Consolidate gains for sustained growth through prudent investments”. This means the Government will continue to strive for a stronger economy through diversification by translating the past, present and anticipated future gains from the mining and resources sector into prudent and sustainable investments in other sectors such as education, health, law and order, energy, transport, tourism, and agriculture.

Polye believes that to achieve this outcome a culture of fiscal discipline must be developed, entrenched and enhanced. 

“We cannot allow the hard earned macroeconomic stability and discipline from the past to be eroded. We are making historic investment decisions from a position of economic strength,” he said in his Budget speech to Parliament yesterday. 

We could not agree more with the treasurer that fiscal discipline is an essential ingredient of economic growth and prosperity. With­out fiscal discipline, the Government’s best efforts and initiatives will be a waste of time and public money.

There is little or no doubt that the O’Neill Government has made great strides in the past two years, particularly through initiatives such as tuition fee free education, investment in quality higher education, free health care, significant infrastructure fun­ding and transfer of funds to sub national governments.

While its “year of implementation” has not been fully realised, the Government should nonetheless be commended for kick-starting a process that should be on-going and not be limited or judged by the time factor.

Indeed, it is encouraging to note that the Government will continue to focus its efforts and maintain the level of funding for provinces, districts and local level governments.

As Polye assured Parliament yesterday, the direct funding for provinces, districts and LLGs of K1.5 billion will be maintained. 

These direct funds provide each province with K5 million per district under the Provincial Services Improvement Programme (PSIP); each district will receive K10 million under the District Services Improvement Programme (DSIP) and K500,000 for each LLG to be administered at the district level. 

These funds are to be used for the priorities identified in the relevant provincial and district five-year development plan. 

“During 2014, the functions of all three tiers of go­vernment will be defined appropriately for efficient per­formance and to ensure that the duplication of functions is avoided.” 

Another commendable in­itiative is the District Authority, which will strengthen the LLG system by enabling funds to be directly provided to districts and LLGs rather than the current system where provincial governments have a transfer and oversight function.

This will not only cut unnecessary red tape but reduce the chances of project funds being siphoned along the way to the districts and LLGs.  

Papua New Guinea’s future is in the hands of our children and the O’Neill Government’s focus on education is its greatest achievement so far.

We note that funding for the education sector in 2014 will be K1.5 billion, an increase of K160 million from 2013. The Education Department will receive K1,082 million, which demonstrates the Government’s commitment to education. 

Students from more than 18,000 schools will benefit from the Government’s free tuition education for elementary level to national high schools, which will cost K605 million with a further K43 million in trust. 

That is indeed good news for parents and guardians throughout the country.

The O’Neill Government has indeed put its money where its mouth is and we commend Treasurer Polye for delivering a balanced and fiscally responsible budget.