Prime Minister Hon. James Marape has assured Parliament that the Government will consider allowing provincial authorities greater control over the management and implementation of projects funded through the Infrastructure Tax Credit Scheme (ITCS).
Prime Minister Marape gave the assurance in Parliament today while responding to a supplementary question from Kainantu MP Hon. William Hagahuno, who called for resource-producing provinces to be given responsibility for determining, approving and procuring projects funded through their provincial tax credit allocations.
Mr Hagahuno welcomed recent amendments to the Income Tax Act establishing a new oversight board and providing for a three-way distribution of tax credit funding:
• 0.5 per cent for Bougainville;
• 1.25 per cent for national infrastructure projects; and
• 1.25 per cent for provincial infrastructure projects.
However, he expressed concern that centralising decision-making in Waigani could undermine the ability of resource-producing provinces and districts to determine their own infrastructure priorities.
He proposed that the provincial allocation be administered through existing provincial ITCS committees, comprising representatives of the Department of National Planning, project developers, provincial administrations and district administrations.
Prime Minister Marape welcomed the proposal and assured Parliament that the Government’s policy team would examine the most appropriate and equitable arrangements.
“I consider the question as a recommendation for us to consider,” Prime Minister Marape said.
“I will allow our policy team to look through this process and see what is the best and fairest way to deal with the ITC matter.”
The Prime Minister emphasised that infrastructure tax credits represented national government revenue forgone and must therefore be managed responsibly to support national development priorities.
“It is national government revenue that is forgone. So the National Government is cognisant of the allocation so that we meet the national targets,” he said.
“Sometimes when you pass it back, you don’t meet the national targets.”
Prime Minister Marape said the National Government had a responsibility to ensure that infrastructure investments contributed to broader national development objectives, regardless of which level of government administered the funding.
“National Government, this government or any government into the future, are custodians of national plans. National Government wants national impact projects,” he said.
“My only caveat will be so long as those projects are impact projects that translate into improving the lives of people in the local areas, the province, as well as the country.”
Prime Minister Marape reiterated that the proposal would receive consideration, with the Government seeking to balance provincial participation and decision-making with national development priorities and accountability.
“Good recommendation through this question. I will certainly take it up,” he said.
The Prime Minister said the guiding principle would be to ensure that infrastructure tax credit funding delivered meaningful development benefits to local communities, resource-producing provinces and Papua New Guinea as a whole.