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New financial system expected to make economy more transparent

Paul Barker
Paul Barker


PORT MORESBY - The introduction of a new financial system should make Papua New Guinea’s economy more effective and transparent, a prominent commentator has told Radio New Zealand.

Paul Barker, head of PNG's Institute of National Affairs, told journalist Jenny Meyer that it had taken “a very long time” for the government to roll out a new system that will make financial management more effective and transparent.

The PNG Finance Minister has previously stated that there could be up to a billion kina missing in the government system.

“I know that there are a lot of concerns,” Mr Barker said. “Certainly the government [are] trying to get their hands on a lot of money that may be sitting around the system in bank accounts and trust accounts and so on.

“They're desperately short of revenue, desperately short of funds, and expenditure is running well ahead of revenues.”

Mr Barker told Jenny Meyer that the government has had three different financial management systems: the provinces have one system; the Works Department another system; and the new integrated system is being rolled out now in central agencies and at sub national level.

“The lack of an integrated financial management system has really meant that the Finance Department has not been in a position to assess at any one stage [to assess] exactly the state of the government's overall financial status,” he said.

“And because of slow reporting back under these different systems, and also [because] we don't have really a very effective public accounts and public auditing system, the public accounts are usually in a pretty poor state.”

Mr Barker said the new financial legislation will help the national government access funds from statutory authorities and other bodies.

He said it is illogical for some agencies to accumulate large amounts of revenue that should go to the state but expressed the view that many agencies do not have a lot of money sitting around.

“Most of those funds are just being collected for statutory authorities to perform their functions, so one would be surprised if the amounts are as large as the Minister is suggesting.

“But certainly some of those agencies, like the Fisheries Authority, have put [aside] a substantial amount of money.”

Source: Dateline Pacific, Radio New Zealand


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Will Self

The duplicity and double speak make it appear that this is public money secreted away and misused.

The fact is that many of these accounts are true Trust Accounts holding private beneficiary monies - they are not government trust accounts holding public money.

In 2014 the government emptied some private trust accounts holding resource owners money that the agencies held on trust.

The government then misused the cash for its own purposes. Notably millions were paid straight to the Department of Prime Minister.

Now, by the simple expedient of passing a statute without public consultation, the State can empty any account it wishes under the guise of responsible fiscal management. Not borrow, but take.

There was no stashing of money - just responsible trust management which left a pot of cash to be taken. Of 40 odd million taken from Forestry Trust Accounts approximately half went to the slush fund known as DSIP. This was not and could never be public money.

If you are going to steal it, at least have the decency to tell the people you are doing so.

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