By LORRAINE WOHI
A TOTAL grant payment of over K5.2 billion has been made between the years 2009 to 2019 to the sub-national level as a recovery cost for the fiscal gap on provincial revenue and cost of services.
Chairman and CEO of National Economic and Fiscal Commission (NEFC), Patrick Painap in his report to the PNG National Research Institute highlighted that there have been an increased in grant transfer as assessed by the NEFC especially on the core sector areas of education, health and infrastructure.
He however said despite the increased in grant transfer allocated to provinces, no physical improvement were seen on development at the sub-national level.
“The challenge is on how grant funding given to the provincial governments is being managed and used at the sub-national level.
“Most of the provinces want more decision making powers to administer their affairs, control their affairs and develop their economies.
“Provinces want more revenue and taxing powers to be developed to grow their economies.
“Currently there are inefficiencies and fragment in the sub-national financing systems.
“If not address, it is likely to contribute to greater fiscal imbalances leading to greater economic implications,” Painap said.
NEFC has called for a review of Intergovernmental Financing systems as a way forward.
The objective of the review is to “undertake a holistic review” to identify key issues and recommends to government some directions and options for a new reform.
The presentation in general highlights the NEFC’s assessing Impacts on the functional responsibilities; assessing the share of revenue generation responsibilities; and assessing the fiscal capacity in provinces.