Analysis of Anti-corruption Funding Discrepancies in the 2018 PNG Budget

 
Grant Walton 
Research Fellow
Husnia Hushang
, Program Officer
 
Development Policy Centre, 
Crawford School of Public
Policy,
 Australian National University.
grant.walton@anu.edu.au
 
The Wrong Way to Close a Funding Gap:
anti-corruption and the 2018 PNG
budget
 
Introduction
 
Last year we presented 10 years of government
budgets and found a growing gap between
allocations and spending for anti-corruption
organisations
This year we look at :
the 2018 budget to reveal what has changed,
how anti-corruption 
funding
 aligns to government
rhetoric
Reveals how well PNG government supports anti-
corruption
Are AC organisations worse or better off in 2018?
 
Funding for anti-corruption
organisations: an update
 
 
Anti-corruption organisations
 
Ombudsman Commission
National Fraud and Corruption Directorate
Auditor-General
Taskforce Sweep/ICAC
Financial Intelligence Unit/
Financial Analysis
and Supervision Unit
 
FIU/FASU will have less money under
Bank of PNG than it had under RPNGC
 
Massive reductions for Fraud Squad
 
The ICAC’s future is looking dim
 
Auditor general facing further cuts
 
Cuts to Ombudsman Commission to
stop in 2018
 
The Ombudsman Commission is set to
become the best funded AC org.
 
The funding gap is closing, but for the
wrong reasons
 
EITI funding a silver lining
 
EITI better funded than ICAC,
FIU/FASU, Fraud Squad
 
EITI helps close the gap, but funding
still declines
 
Now, AC underspends reflect other
areas of government
 
Less available money will be spent on
anti-corruption organisations
 
That’s still the case when
decentralisation is taken into account
 
AC spending is miniscule c/w broader
Law and Justice Sector
 
Anti-corruption rhetoric: an update
 
With less funding government has
ramped up A/C rhetoric
 
Gov’t continues to promote commitment to address
corruption
Mostly this is being done through legal reform:
 Constitutional and Law Reform Commission
Designing laws for the new ICAC
Reviewing Organic Law on the Duties and Responsibilities of the
OC
2018 Budget:
Government aims to introduce bribery offences
Passing of anti-money laundering and counter terrorism financing
laws
Amendments to Proceeds of Crime, Criminal Code and Mutual
Assistance in Criminal Matters legislations
How do we interpret this rhetoric?
 
Conclusions
 
Conclusions
 
Significant cuts to anti-corruption organisations
undermines the potential for keeping the state
accountable.
The good (OC/EITI) is outweighed by the negative (cuts
to others)
The gap between AC budgets and actual spending
has closed, but for the wrong reason: severe
funding cuts
EITI funding is welcome, shows internal and
external pressure can shape anti-corruption
funding
But, it does not diminish the overall trend of budget
cuts
 
Conclusions
 
Less 
available
 money is spent on anti-corruption
organisations
Are anti-corruption organisations being targeted for
budget cuts?
 There is a gap between anti-corruption rhetoric
and funding
The government is proposing and passing new laws it
can not enforce and introducing institutions it can’t
fund
Need to better fund anti-corruption organisations
before introducing new laws/institutions
Keep your eye on the funding rather than the promise
of laws/institutions.
 
 
Further information
 
 
Blog:
The wrong way to close a funding gap (2018):
http://www.devpolicy.org/anti-corruption-and-the-2018-png-budget-20180214/
 
Discussion Paper:
Walton, GW and Hushang, H (2017) Promises, promises: A decade of allocations for
and spending on Anti-Corruption in Papua New Guinea. (17 July) Development
Policy Centre and Developmental Leadership Program Discussion Paper No. 60.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3009987
 
 
Slide Note

Today I want to share some of the ongoing research my colleague Husnia and myself and I have been conducting over the past two years. This presentation follows on from a presentation we did at last years’ PNG update, where we examined anti-corruption funding between 2008 and 2017; this presentation updates that analysis with new findings gained from the 2018 budget.

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The study examines the funding allocation and actual spending for anti-corruption organizations in the 2018 budget of Papua New Guinea, highlighting decreases in funding for crucial entities like FIU/FASU, Fraud Squad, ICAC, and Auditor General over the years, raising concerns about the government's commitment to combating corruption.


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  1. The Wrong Way to Close a Funding Gap: anti-corruption and the 2018 PNG budget Grant Walton Research Fellow Husnia Hushang, Program Officer Development Policy Centre, Crawford School of Public Policy, Australian National University. grant.walton@anu.edu.au

  2. Introduction Last year we presented 10 years of government budgets and found a growing gap between allocations and spending for anti-corruption organisations This year we look at : the 2018 budget to reveal what has changed, how anti-corruption funding aligns to government rhetoric Reveals how well PNG government supports anti- corruption Are AC organisations worse or better off in 2018?

  3. Funding for anti-corruption organisations: an update

  4. Anti-corruption organisations Ombudsman Commission National Fraud and Corruption Directorate Auditor-General Taskforce Sweep/ICAC Financial Intelligence Unit/Financial Analysis and Supervision Unit

  5. FIU/FASU will have less money under Bank of PNG than it had under RPNGC 0.90 0.80 0.70 0.60 Millions of Kina 0.48 0.50 0.40 0.28 0.30 0.20 0.10 0.00 2014 2015 2016 2017 2018 Budgeted Actual

  6. Massive reductions for Fraud Squad Budgeted and actual, 2017 prices 2.00 1.80 1.60 1.40 1.40 Millions of Kina 1.20 1.00 0.80 0.66 0.60 0.40 0.20 0.00 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Budgeted Actual

  7. The ICACs future is looking dim Budgeted and actual, Taskforce Sweep and ICAC 2017 prices 30 25 Millions of Kina 20 15 10 5 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Budgeted Actual

  8. Auditor general facing further cuts Budgeted and actual, 2017 prices 35.0 30.0 25.0 Millions of Kina 20.0 16.9 15.0 10.0 5.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Budgeted Actual

  9. Cuts to Ombudsman Commission to stop in 2018 Budgeted and actual, 2017 prices 30.0 25.0 Millions of Kina 20.0 15.0 10.0 5.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Budgeted Actual

  10. The Ombudsman Commission is set to become the best funded AC org. Actual Spending (budgeted in dashed), 2017 prices 30.0 25.0 Millions of Kina 20.0 15.0 10.0 5.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Ombudsman Commission Actual Fraud and Corruption Actual Auditor General Actual ITFS/ICAC Actual FIU

  11. The funding gap is closing, but for the wrong reasons Total Anti-corruption Budget and Spending, 2017 prices 80 70 60 50 Millions of Kina 40 30 20 10 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Budgeted Actual

  12. EITI funding a silver lining EITI Budget vs actual, 2017 prices 4.00 3.50 3.00 Millions of Kina 2.50 2.00 1.50 1.00 0.50 0.00 2016 2017 2018 Budgeted Actual

  13. EITI better funded than ICAC, FIU/FASU, Fraud Squad 30.0 25.0 20.0 15.0 10.0 5.0 0.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Ombudsman Commission Fraud and AC Directorate Auditor General ITFS/ICAC FIU/FASU EITI

  14. EITI helps close the gap, but funding still declines Total Anti-corruption Spending with EITI included, 2017 prices 80 70 60 50 Millions of Kina 40 30 20 10 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Budgeted Actual

  15. Now, AC underspends reflect other areas of government Actual Spending vs Budgeted for Whole Budget and A/C Organisations 140% 120% 100% 85% 80% 69% 60% 40% 20% 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total budget Anti-corruption

  16. Less available money will be spent on anti-corruption organisations Anti-corruption Spending as Proportion of National Budget 0.8% 0.7% 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 -0.1% Budgeted Actual

  17. Thats still the case when decentralisation is taken into account Anti-corruption Spending as Proportion of National Budget minus provincial expenses 0.6% 0.5% 0.4% 0.3% 0.2% 0.1% 0.0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Budgeted Actual

  18. AC spending is miniscule c/w broader Law and Justice Sector Anti-corruption vs Law and Justice Sector, 2017 prices 1,800 1,600 1,400 Millions of Kina 1,200 1,000 800 600 400 200 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Law and Justice (Budgeted) Law and Justice (Actual) Total AC Spending (Budgeted) Total AC Spending (Actual)

  19. Anti-corruption rhetoric: an update

  20. With less funding government has ramped up A/C rhetoric Gov t continues to promote commitment to address corruption Mostly this is being done through legal reform: Constitutional and Law Reform Commission Designing laws for the new ICAC Reviewing Organic Law on the Duties and Responsibilities of the OC 2018 Budget: Government aims to introduce bribery offences Passing of anti-money laundering and counter terrorism financing laws Amendments to Proceeds of Crime, Criminal Code and Mutual Assistance in Criminal Matters legislations How do we interpret this rhetoric?

  21. Conclusions

  22. Conclusions Significant cuts to anti-corruption organisations undermines the potential for keeping the state accountable. The good (OC/EITI) is outweighed by the negative (cuts to others) The gap between AC budgets and actual spending has closed, but for the wrong reason: severe funding cuts EITI funding is welcome, shows internal and external pressure can shape anti-corruption funding But, it does not diminish the overall trend of budget cuts

  23. Conclusions Less available money is spent on anti-corruption organisations Are anti-corruption organisations being targeted for budget cuts? There is a gap between anti-corruption rhetoric and funding The government is proposing and passing new laws it can not enforce and introducing institutions it can t fund Need to better fund anti-corruption organisations before introducing new laws/institutions Keep your eye on the funding rather than the promise of laws/institutions.

  24. Further information Blog: The wrong way to close a funding gap (2018): http://www.devpolicy.org/anti-corruption-and-the-2018-png-budget-20180214/ Discussion Paper: Walton, GW and Hushang, H (2017) Promises, promises: A decade of allocations for and spending on Anti-Corruption in Papua New Guinea. (17 July) Development Policy Centre and Developmental Leadership Program Discussion Paper No. 60. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3009987

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