PAY FROM GOV’T SHARE: PARKOP
Governor Parkop said this when he was speaking at a media conference in Port Moresby to respond to the decision by Mr Koim.
This is the legally correct thing to do as it is the order made by the Supreme Court in matter SCA 29 of 2019. (copy of court order attached)
Morally, it is also the proper thing to do as the National Government gets over K1.6 billion in GST from the City. Of that, NCDC receives less than K290 million.
HERE ARE THE FACTS OUTLINES IN A MEDIA RELEASE BY GOVERNOR PARKOP:
- NCDC HAS NOT BREACHED ITS OBLIGATIONS
The Supreme Court in SCA 29 of 2019 found that NCDC has not breached its obligations to Central Province. In fact, in the last 14 years, NCDC has remitted a total of K140,221,000 to the Central Provincial Government. In 2020, NCDC remitted K12,050,000 and in 2019 K14 million. https://www.thenational.com.pg/irc-to-distribute-tax-component-for-ncdc-to-central-gulf-mta/
The amount has progressively increased as NCDC’s GST component also increases.
Over and above this, in terms of the GST that the National Government redistributes to all the provinces, including Central Province, from the GST raised in the City. Central Province gets K4,874,702 annually. On top of this, like all the other provinces, Central Province also receives annual grants from the National Government to support its budget. However, NCDC gets nothing. In 2020, for example, Central Province received K116,132,967. This year, they will receive K128,201,907. They also get PSIP and DSIP funds.
Central Provincial business arms also operate in the City and they also operate a traffic registry in the City unlike NCDC.
NATIONAL GOVERNMENT GETS MORE IN GST AND OTHER REVENUE FROM NCD
IRC collects two types of GST in the City. All business houses and service providers operating in the City pay inland tax. The other GST is from the airport and sea port. Of the inland GST, NCDC receives 60 percent. The balance or 40 percent goes to National Government to redistribute to all the provinces. This is the same for all Provinces. They get 60 percent of their GST and 40 percent goes to National Government. For the Port GST in NCD, National Government receives 100 percent of all GST raised there, said Governor Parkop.
As of 2020, NCDC received K241,252,000 of inland GST while National Government received K160,834,667. From the Port GST in 2020, the National Government received K2,212,200,000 in 2020 (K2.2 billion). The component from NCD ports to this figure is around K1.2 billion, said Mr Parkop.
Over and above this, the National Government earns a lot for money from corporate tax, income tax, export and import tax, land tax from the City and its residents. It also gets revenue from all the States Enterprises like Ports PNG, Eda Ranu, Telikom, Post PNG, PNG Power etc…
So, it is only legally and morally proper that IRC pays Central Province from the GST components it receives from the City and NOT from the allocations to NCDC. That’s the orders also of the Supreme Court.
3. NCDC BUDGET IS COMPARABLE TO THE PROVINCES.
The funding arrangements as provided by law does not really give NCDC and the city much comparative advantage over the Provinces. Our annual budget is relatively comparable to most provinces, with similar population size, said Mr Parkop.
NCDC budget for 2020 was K304,101,000 while in 2019 it was K341,651,000. Compare this with Morobe Province which passed their budget last year of K662,675,000 and K441 million in 2019. Eastern Highlands budget for 2020 was K320 million with similar budgets for Hela and Southern Highlands Province.
If we rely on the revenue generated by the IRC alone through GST payment, we would not have achieved all the outcomes we have done in the last 14 years.
CREATIVE FUNDING MECHANISMS OF NCDC
NCDC, Parkop said, has to formulate other funding mechanisms to enable us the achieve our outcomes and deliver essential services to our Capital City on a daily basis.
Apart for these GST Revenue, we also use loan finance; build operate transfer; turnkey agreements with contractors who deliver first at their cost and then we repay on a periodic basis until we settled everything. If we had extra undeveloped land, we would consider using mechanism such as the Special Economic Zones and other financing devices to achieve outcomes for the city.
In the last 10 years, we have acquired loans from onshore and offshore to finance the city roads, buildings and other infrastructures. For example, we loan finance to build Badihagwa to 9-Mile via Gerehu William Skates Highway; Stanley Esplanade to Paga Hill Ring Road including Ela Beach Road and the entire transformation of Ela beach. BSP loan financed City Hall and its Annex buildings. Recently, we got another K300 million loan to finance three new roads now under construction which is Gerehu, 9-Mile to Laloki and 9-Mile to 17-Mile.
LOANS NCDC SECURED TO STIMULATE ITS ECONOMY IN LIGHT OF COVID-19
We also got loan finance from the World Bank to fund social programs like the Urban Youth Employment Program. Further, we also entered into bilateral partnerships with development partners to ensure we achieve our goals to develop a modern and safe city. For example, the New Zealand Government and NCDC funded the Gordons Market . They contributed K25 million whilst NCDC did the other K25 million. The same is true for Saraga market. https://pngsun.com/2021/06/26/leave-9-mile-cemetery-alone-kipit/
GLOBAL COMPARISION OF MUNICIPAL BUDGETS
For a city the size of Port Moresby with almost one million people, we need about K1.5 billion to provide all the essential services. That includes building and maintaining infrastructures to sustain and maintain an exploding population. By global comparison with cities of similar size like Kigali in Rwanda, Halifa in Israel, Tripoli in Libya, Oslo in Norway, Islamabad in Pakistan, our budget is small and totally insufficient.
Just for the record, Kigali, the capital City of Rwanda has a population of 1.5 million. Its annual budget is over 100 billion Franc.
CENTRAL PROVINCE IS AN INTEGRAL PART OF NCD
The people of Central Province commute every day to the city. Many come to work and to market their produce. They also come for education, shopping, sports, recreation, lifestyle and enjoy many other services.
The City is always here for Central people. For those who get stranded, the city provides services like the Transit Centre at Koki Market for them to stay over night. The transit centre accommodates about 100 people from Central overnighting every day.
As Governor of the Capital City, I aspire for us all to be one people, one city moving towards one future. This is our Capital City and it deserves all the funding and budget allocations. Thus, the funds must be sufficient and befitting of a modern capital city for the entire country.
PORT MORESBY IS THE CAPITAL OF PAPUA NEW GUINEA
The Parliament decided unanimously before 16th September, 1975 for Port Moresby to be our capital. It has always been the capital since colonial times. Section 4 of the Constitution provides for it until such time, Parliament in its wisdom decides to amend the constitution. Otherwise, Port Moresby remains as our capital. My responsibility as Governor and Provincial Member of Parliament representing the City, is to ensure that we maintain and protect the constitution. Additionally, we ensure the city continues to thrive and prosper. That is because it is here for the entire people of our country including our people of Central Province.