Saturday, December 9, 2023

MP slush funds used to keep up energy in PNG

The additional cash, the extra probability of an incumbent ruling social gathering’s success at elections.

After successful a brand new time period because the Papua New Guinean Prime Minister in August, James Marape has busied himself rewarding members of parliament and strengthening his coalition.

One reward was an all-expenses paid journey to Brisbane in September for 72 MPs to attend the annual PM’s 13 rugby league match between PNG and Australia. In opposition to extra urgent improvement wants, the journey price greater than K3 million. The match noticed PNG thrashed by Australia 64 factors to 14.

One other reward has been to improve the province and district providers enchancment program (P/DSIP), or what are sometimes described as MP slush funds, from K8 million to K10 million, the highest quantity ever. This cash has turn into an embedded aspect of PNG’s politics, primarily permitting particular person MPs to dole out money to favoured tasks and preserve a constituency on aspect. The emphasis on these province- and district-level funds has come on the expense of national-level planning.

Excessive petroleum costs growing authorities income has enabled this newest increase to the funds. Authorities has opted to spend the extra income, as a substitute of investing in its legislated sovereign wealth fund (not operational) or decreasing its deficit (presently 5.4 per cent of GDP).

DSIP funds have elevated the significance of district MPs relative to provincial MPs. District MPs (96) outnumber provincial MPs (22) greater than 4 instances and comprise 81 per cent of parliament.

There have been three falls in DSIP fund ranges and these dips partially clarify the adjustments in authorities that adopted.

DSIP funds contained inside the improvement price range rise and fall with authorities income. Adverse financial shocks trigger a fall in authorities income, and DSIP funds are decreased to accommodate the shortfall. As DSIP funds are used to keep up governing coalitions, a dip in DSIP can dissolve the coalition. In some cases, DSIP funding was additionally withheld from the opposition.

Although launched in 1984, DSIP funds first grew to become an efficient political software in 1999, when the quantity elevated above K1 million. Within the chart beneath, I take advantage of DSIP funds at (nominal) present costs as reported DSIP spending fails to account for inflation. The chart additionally reveals general DSIP spending as a share of presidency expenditure. This has

been unstable however has trended carefully with DSIP funds disbursed to particular person MPs.

The spikes in DSIP funds had been attributable to rising log and occasional costs (1994), introducing the worth added tax (VAT) and Financial institution of PNG financing expenditure (1999), excessive log and mineral costs (2006), and a push to decentralise public spending to sub-national governments (2013).

Since 1999, there have been three falls in DSIP fund ranges. These dips partially clarify the adjustments in authorities that adopted.

The primary fall in DSIP ranges occurred in 2002. Dealing with stress from the World Financial institution to discontinue DSIP funding, then PM Sir Mekere Morauta diverted a part of the DSIP funds to schooling. This, together with financial difficulties and unpopular reforms on the time, led to Sir Mekere failing to return as PM following the elections.

The second fall in DSIP funds occurred in 2009 in the course of the international monetary disaster, dragging on with low international mineral costs in 2010 and 2011. By August 2011, Peter O’Neill was elected PM by parliament following incumbent Sir Michael Somare’s sick well being, resulting in a constitutional disaster the place there have been two PMs for seven months.

The third fall in DSIP funds occurred in 2018 when a massive earthquake hit, and spending was diverted to earthquake reduction. In Could the next 12 months, O’Neill was ousted in a profitable vote of no confidence.

Sustaining DSIP funds at K8 million per district MP in 2020 additionally appeared to assist Marape survive a vote of no confidence. This, along with adjourning parliament sitting days, saved his social gathering comparatively intact (23 per cent of parliament) and introduced again coalition members who had defected.


DSIP funds additionally partially clarify how authorities funds allow the incumbent ruling social gathering to succeed at elections. This enhances the speculation put ahead by several commentators on the 2003 amendments to the Natural Regulation on Political Events and Candidates (OLIPPAC) mandating that the social gathering with the best quantity kinds authorities, resulting in the incumbent ruling social gathering returning efficiently within the 4 earlier elections.

The success of the incumbent ruling social gathering at elections would ideally be measured by the speed at which that social gathering’s district MPs had been re-elected. This isn’t attainable as a result of information for events in parliament (given MPs change events) previous to 2017 is missing. Another measure is the incumbent ruling social gathering’s election success price (the ratio of wins to endorsed candidates). This measure is justified because the incumbent ruling social gathering is often the largest social gathering in parliament, and a excessive share of its MPs had been re-elected in current elections.

Within the chart above, a robust, optimistic correlation might be seen between DSIP funds (within the 12 months prior) and the incumbent ruling social gathering’s success price at elections. The incumbent ruling social gathering loved extra electoral success when it doled out extra DSIP funds. Although election social gathering information exists for solely six of PNG’s ten elections, for the reason that 2003 OLIPPAC amendments, the incumbent ruling social gathering loved the best election success price of any social gathering and returned to authorities.

Marape is protected by the grace interval that ends in 2024. By then and within the absence of a adverse financial shock, Marape’s use of DSIP funds will possible see him survive votes of no confidence and full this time period.




Maholopa (Maho) Laveil is the inaugural FDC Pacific Fellow on the Lowy Institute.

Most important picture through Flickr consumer The Commonwealth

This text first appeared in The Interpreter, revealed by the Lowy Institute.  

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