Papua New Guinea parliament in session on 15 February 2024. Photo: Loop PNG / Screencapture
The PNG parliament has passed the country's security-focused budget amid stern warnings from both sides of the house calling for transparency and accountability.
When parliament's Plans and Estimates Committee chairman Joseph Yopyyopi rose to deliver his assessment of Papua New Guinea's 2026 national budget, the chamber expected technical detail. But what they also got was a blunt warning.
"The 2026 National Budget is of such a scale that it demands rigorous and realistic assumptions," he said.
"When figures continue to exceed economic realities, the social contract between government and the people is placed at risk."
In one of the few moments in PNG politics, voices across government and opposition expressed deep concern that "record budgets" are failing to translate into basic services on the ground.
020514. Photo RNZ. Papua New Guinea. Photo: RNZ
As most senior political figures lined up to speak, they were divided by party loyalties and political histories, but united on one point: the numbers in the budget no longer match the lived reality of ordinary Papua New Guineans.
Their statements were in stark contrast to optimistic outlooks by Treasurer Ling-Stuckey and Prime Minister, James Marape.
Budgets getting bigger, services getting worse
Yopyyopi's committee delivered one of the most sobering assessments yet of the government's fiscal position. Despite a K$30.9 billion (approx. NZ12.4b) record budget - the largest in PNG's history - the committee found "overly optimistic" revenue assumptions, persistent cash-flow crises and growing arrears.
His concern is not abstract.
Health centres have shut down. Provincial governments report receiving only a fraction of their functional grants. Schools, hospitals and rural roads are deteriorating. In many districts, the most basic frontline operations have stalled.
East Sepik governor Allan Bird was even more direct.
"Our people are watching this debate and asking one simple question: when will these record budgets translate into record solutions?"
Allan Bird Photo: Facobook / Allan Bird
Bird listed clinics without medicine, teachers without materials, provinces forced to purchase emergency supplies out of their own meagre budgets, and families struggling with rising costs and inconsistent power supply.
He described 2024 and 2025 as "fake budgets" - allocations printed on paper but never released.
Bird said the gap between the ambition of the national budget and the reality in communities was now so wide that it had become a question of honesty.
"This is more than incompetence," he said. "It is fundamental dishonesty in its accounting to Parliament and to the people."
A system struggling under its own weight
Former Prime Minister Peter O'Neill - once the architect of some of PNG's largest budgets - echoed the concerns, though from a different political vantage point.
He reminded the House that running deficits is not inherently wrong if borrowing is directed at "productive projects that build the economy."
But he argued that the current trend is different: money being borrowed not to grow the economy, but simply to keep the system afloat.
Peter O'Neill Photo: Supplied
O'Neill pointed to the expansion of the temporary advance facility - essentially a government overdraft - at the Bank of PNG, which he said had ballooned from around K200 million under his government to nearly K2b today.
He also cautioned against political interference in the country's best-performing institutions, including the Internal Revenue Commission, whose independence he says underpins PNG's strongest source of domestic revenue.
"When institutions are working, we have to learn to leave them alone," he said.
The proposed amendments to the IRC Act - which would introduce a political oversight board - drew criticism from all three leaders.
Yopyyopi called the proposal a threat to the integrity of the nation's tax system. Bird warned it would compromise long-running audits of large multinational companies. O'Neill said it risked politicising sensitive tax matters and eroding confidentiality.
Cash flow: The crisis behind every crisis
If one issue unites the critiques more than any other, it is the recurring theme of cash-flow failure.
Yopyyopi's committee reported that despite the timely issuance of warrants, provinces were still waiting months for funds that "existed only on the budget paper".
Bird detailed the scale of the problem, citing K1.5b in floating cheques in 2023 and K1.8b in 2024, effectively mortgaging future cash flow.
He said the same practices were visible in Connect PNG, where large contracts are awarded now with payments pushed years into the future.
Both warned that provincial and district administrations are being forced to use PSIP and DSIP funds - meant for development - to keep basic services running.
The impact is now visible in the country's swelling settlements, as families migrate from rural areas where essential services have collapsed.
A crisis of public confidence
Underpinning all these concerns is a deeper erosion: trust.
Record budgets have been tabled year after year. Revenue forecasts swell with every announcement of a high gold price or anticipated project. But the services that matter - medicine, police presence, classrooms, power, water - continue to slide.
Bird framed it as an issue of political responsibility.
"Our people don't want extravagance," he said. "They simply want safety, power, water, food and dignity. This budget, like its predecessors, fails to make those aspirations its central priority."
O'Neill described the national narrative around "record budgets" as increasingly "political spin rather than economic reality".
And Yopyyopi warned that parliament must "restore realism and fiscal discipline" or risk undermining the country's already fragile service delivery system.