By BARNABAS ORERE PONDROS
THE National Economic and Fiscal Commission (NEFC) has identified that provincial spending in health and infrastructure was poor.
NEFC chairman Dr Nao Badu warned that if the trend continued, Papua New Guinea was heading for a major disaster.
This was for most provinces in PNG for the period 2005-08, from their own budgets.
Dr Badu said this at the launch of its provincial expenditure review 2008 at Morauta House, Waigani, on Tuesday.
“PNG is heading for a major health disaster if nothing is done,” he said.
According to the review, provinces only spent 25% of what they needed to on rural health services while in 2007 it was 21%.
“There is a trend of generally low spending relative to the provinces ability to spend in health, which is very concerning,” the review noted.
For infrastructure, in 2005-08 provinces spent only 14% on what was required.
Dr Badu also noted that spending on administration was a real concern.
These spendings were from provincial budgets and expenditure and were based on a cost of service estimate against spending.
The only areas that showed a positive trend was agriculture that showed improvement and education growing strong.
In the review the NEFC had urged provinces to:
* Increase the amount on budget on recurrent goods and services in MTDS sectors, particularly health and infrastructure;
* Ensure that the minimum priority areas are adequately funded in the next budget and that proper monitoring and reports are done; and
* Consider whether they are fairly allocating funding across sectors.
“For instance, are we funding education very well yet funding health poorly,” Dr Badu said.
The NEFC also called reduction in administration spending; reduction in poor budget and spending practices; and the consideration of implications on capital spending.
The review, titled “walking the talk”, is the fourth in the NEFC’s series of provincial expenditure reviews, providing an opportunity to spotlight emerging trends in spending patterns of provincial administrations
Mr Badu said the study was a continuation of a similar analysts that was carried out for fiscal
“Walking the talk is about spending money on essential service delivery activities,” Mr Badu said.
Such activities included medical supplies distribution, provision of basic education materials, maintaining of roads and conducting agriculture extension.
“It looks at the implementation of the reforms where addition funding is being provided to provinces and the distribution of these funds based on need”.
NEFC envisaged that the report would stimulate discussion around these issues by considering costs, fiscal capacity and provincial expenditure patterns.
“We are painting a picture of how we are doing and where we need change,” Mr Badu said.
Chief Secretary Manasupe Zurenouc, who launched the review, said: “We must get our act together and put our money where our mouth is funding must be directed to priority areas”.