Implement the budget

THE Government has presented a “whooping” K7.5 billion budget but the significant challenge ahead is implementation and staying within the budget. The absence or inadequate implementation or spending over the budget can quickly put PNG in serious financial difficulties.The budget document is a plan. It forces the Government to plan and allocate its resources. It identifies any shortfall in revenue and provides some lead-time to develop strategies and solve problems before they evolve into a financial crisis. Budgets also prove to be excellent communication devices as they incorporate financial and operating goals, thereby communicating expectations and priorities to the Government agencies. Not only does the budgeting process monitor the performances, it communicates expectations and priorities and provides a tangible parameter from which to base financial decisions. PNG’s think tank, the National Research Institute, has described the budget as "well focused on priority service areas" but reiterates our sentiments that effective implementation is crucial. However, Director Dr Thomas Webster says whether its going to be a balanced budget is yet to be been seen. "By the books it's balanced but in the implementation if it goes over then that's a surplus budget," he said. "But if we don't collect enough then it would be a deficit budget." He pointed out that the Recurrent Budget has salaries and operational costs for most national and provincial government agencies. There are existing problems with their performance in the delivery of goods and services. The development budget proposes additional programs with funding for various programs of activities. Our concern is that, an already overburdened and weak government machinery is put under more pressure to implement the budget and realize the expected outcomes. To ensure effective implementation the Government must address several issues relentlessly. There are problems with a weak public service (human resources) that needs improvement in training, in orientation and in motivation. The budget proposes various activities to improve human resources in proposals under the “Public Sector Workforce Development” program initiatives and in other areas like housing etc. Training and Recruitment of Cadets amongst others will try to improve the quality of the performance of the public service. Will these be enough to get the public service to perform effectively in delivering goods and services in 2010? The second area is in the area of institutional linkages. At the moment, most government agencies work in silos. The budget proposes projects where national agencies are doing some things under both recurrent and the development budgets, Provincial Government Departments doing some things mostly under the recurrent budget and District administrations responsible for a large share of the Development Budget. The intended beneficiaries are the rural populations of PNG. “This is not likely to happen and I suspect that most expenditure will serve organisational and individual interests rather then that of the wider public,” Dr Webster raised. But there is room for better coordination of programs and activities between agencies and between different levels of governments to get better outcomes from the efforts and financial expenditures. Dr Webster said effective linkages need to be created by the Central Agencies pushing the Line Agencies to link their activities more constructively and effectively with Provincial and District Administrations. Key national agencies have responsibilities for some activities but how do these activities link up with similar program activities at provincial and district levels. We strongly believe there needs to be a synchronization of activities so that maximum benefits can be gained from these efforts and financial inputs. Also central agencies need to play a coordinating and monitoring role rather then taking responsibility for program implementation. The quarterly review exercise needs to be taken seriously by central agencies and by ministers to require progressive reports on Budget Implementation. This is so corrective measures can be undertaken, as well as to ensure implementation is happening as desired and on track. Ministers whose portfolios have been allocated large amounts of money, K100m or more should be expected to make regular progress reports to Parliament. And of course to the people of PNG, as to how these funds are being spent. The Treasurer presented a 2008 Budget Outcomes Report. This was an excellent move and we hope that he will do the same for the 2009 budget. Ministers should also make detailed reports on expenditures following the Treasurers Report. This will ensure transparency and accountability as well as to push agencies to implement better the budgets that are allocated and citizens can expect maximum benefits. For any plan to be effective it must be implemented. This is true with the budget. The goal of budget implementation is to become astute at assessing the impact of variances and to know when to implement steps to correct any deviation from the plan.The budget and its implementation are of significant value to the Government and to the people of Papua New Guinea who want change to come.