National Economic and Fiscal Commission

What's New

Provincial Budget Screening Committee
For the first time in 2007, the NEFC was asked to become a member of the Provincial Budget Screening Committee (BSC). NEFC has been recommending Provincial and LLG Grants to Treasury for the last few years.

Cost-Capacity-Performance
In October 2007, NEFC released a report titled; Cost-Capacity-Performance. The review covered all expenditures in 2005 by Provincial Governments.

More money is a cry from many, if not all provinces. But do we need it? How do we spend the money we already have? And is it spent on basic services that are critical to the wellbeing of our people? The report seeks to answer those questions.

Part of the report was presented by the Chairman, Dr Nao Badu at the recent National Development Forum at the Parliament House in Waigani. (Click for more information)

Least Developed District Grant

The Least Developed District Grant was introduced to assist those with the lowest socio-economic conditions to improve their lives.

It was intended to only assist districts where the provincial government lacks the fiscal capacity (low internal revenue per head) to address under-development through use of its own resources.

The funds available for the LDD Grant, is less compared to the need and it is important that costs are not unnecessarily incurred on administration.

It was recommended that the grant be distributed using the Education Subsidy system. Education remains the foundation for any form of development. A basic education provides opportunity. It helps the adoption of improved health care, it makes it easier for people to pursue income earning opportunities and it provides a person more control over his/her life.

Fiscal decentralisation in PNG

Fiscal decentralisation means that each level of Government has some discretion to make expenditure decisions and raise revenues. The Papua New Guinea Constitution and Organic Law on Provincial Governments and Local-Level Governments (OLGPLLG) mandates the 3 political levels of Government. The table below summarises their structure.

LEVEL OF GOVERNMENT	NUMBER
National	1
Provinces and NCD	20
Local-Level (LLGs)	312
Urban	27
Rural	285

Revenues and expenditures by each level of Government

In 2003, the National Government collected over 90% of the revenues raised by all levels of government. However, it spent only 72% of the revenue, as can be seen from the pie charts below.

The National Government transferred an amount roughly equal to 20% of total revenues to assist Provinces and LLGs to carry out their responsibilities. Click this link for an overview of these transfers in 2005.

News

The NEFC is at an exciting stage in developing reforms to the intergovernmental financing system that will improve basic service delivery to all Papua New Guineans. Legislation is about to be presented in Parliament and implementation with partner agencies and provincial and local-level governments will follow shortly. In anticipation of this, NEFC is putting together a team of enthusiastic and experienced professionals to drive the implementation of these significant and far-reaching reforms. Click here for vacant positions.