The National Economic and Fiscal Commission has revealed an increase in the 2024 Function Grants allocation to the Provincial and Local Level Governments.
NEFC through its 2024 Budget Fiscal Report determined the Function Grants for the Provincial and Local Level Governments is at K771.3 million. An increase of K129.3 million from K642.1 million in 2023.
According to the NEFC’s 2024 Budget Fiscal Report, Provincial Government Function Grants for 2024 stands at K655.6million, an increase of K84.2million kina from K571.4million in 2023, while Local Level Government Function Grants at K115.7million an increase of K45.1million from K70.6million in 2023.
Major sectors like Health, Education, Transport, and infrastructure have seen an increase in funding respectively.
For 2024, Function Grant for Health stands at K133.3million an increase of K16.6million from K116.7million, Education at K155.1million an increase of K20.2million from K134.9million in 2023 while Transport Infrastructure is at K194.6million an increase of K24.3 million from K170.3million in 2023 fiscal year.
The National Economic and Fiscal Commission as mandated by law for every year, must present a report on its operations and the determination of function grants for Provincial and Local Level Government to the Parliament through the Minister for Treasury.
The 2024 Budget Fiscal Report is in accordance with section 69 of the Intergovernmental Relations (functions and funding) Act 2009 and section 117(9) of the Organic Law on Provincial and Local Level Governments and is obliged to be submitted to the Parliament by the Minister for Treasury.
The 2024 Budget Fiscal Report was passed by the Parliament on Tuesday 28th November 2023 presented by Minister for Treasury Ian Ling Stucky.
National Economic & Fiscal Commission Chairman and Chief Executive Officer Patrick Kennedy Painap said the primary aim of the annual budget fiscal report is to establish a robust foundation for well-informed public policy.
“It centers on the fundamental objectives of fiscal decentralization, aligning with the government’s development goals and the aspirational vision 2050,” he said.
Painap said a significant highlight for NEFC this year 2023 has been the Intergovernmental Financing Arrangement Review Regional Consultations undertaken by the NEFC, the Department of Treasury, and eleven other key agencies under the PLLSMA Sub-Committee on IGFAR.
He said the progress in 2023 has been promising, with impactful consultative workshops held in the four regions of Papua New Guinea, concluding in the Southern Region in October 2023.
NEFC CEO Painap explained, that the story of the reforms of intergovernmental financing arrangements spans over a decade.
“It is a story of how the intergovernmental financing system was built upon the principle of equalization and the fundamental belief that funding must always follow functions” he added.
Mr. Painap said, that since 2009, over K7.8billion has been given in function grants with an additional K7billion in GST adding that these are just two fiscal transfers alone, but if the SIP, PIP, and donor grants to the sub-national governments are considered the total envelope of fiscal transfers has been enormous.
He said the increased funding over the years has provided a vital lifeline for the service delivery mechanism.
“However, with this increased funding, it becomes our collective responsibility to ensure that these resources are not just financial injections but catalysts for service delivery,” said Mr. Painap.