HomeMicrofinanceMP slush funds used to keep up energy in PNG

MP slush funds used to keep up energy in PNG

The extra cash, the extra probability of an incumbent ruling get together’s success at elections.

After profitable 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 growth wants, the journey value 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 companies 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 change into an embedded ingredient of PNG’s politics, basically permitting particular person MPs to dole out money to favoured initiatives and preserve a constituency on facet. The emphasis on these province- and district-level funds has come on the expense of national-level planning.

Excessive petroleum costs rising authorities income has enabled this newest enhance to the funds. Authorities has opted to spend the extra income, as an alternative of investing in its legislated sovereign wealth fund (not operational) or lowering 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 occasions 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 growth 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 situations, 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 exploit DSIP funds at (nominal) present costs as reported DSIP spending fails to account for inflation. The chart additionally exhibits total 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 have been brought on by 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 strain 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 through the world monetary disaster, dragging on with low world mineral costs in 2010 and 2011. By August 2011, Peter O’Neill was elected PM by parliament following incumbent Sir Michael Somare’s unwell 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 giant earthquake hit, and spending was diverted to earthquake aid. In Could the next yr, 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 get together 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 get together 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 get together with the best quantity varieties authorities, resulting in the incumbent ruling get together returning efficiently within the 4 earlier elections.

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

Within the chart above, a robust, constructive correlation might be seen between DSIP funds (within the yr prior) and the incumbent ruling get together’s success fee at elections. The incumbent ruling get together loved extra electoral success when it doled out extra DSIP funds. Although election get together knowledge exists for solely six of PNG’s ten elections, because the 2003 OLIPPAC amendments, the incumbent ruling get together loved the best election success fee of any get together and returned to authorities.

Marape is protected by the grace interval that ends in 2024. By then and within the absence of a unfavorable financial shock, Marape’s use of DSIP funds will doubtless 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.

Major picture by way of Flickr person The Commonwealth

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



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