Part VIII of the Constitution is titled “Supervision and Control”, and it opens with the oldest principle in constitutional government: no taxation and no spending without the legislature.
Section 209(1) — parliamentary responsibility
Notwithstanding anything in this Constitution, the raising and expenditure of finance by the National Government — including the imposition of taxation and the raising of loans — is subject to authorization and control by the Parliament, and shall be regulated by an Act of the Parliament.
The opening words are unusual and deliberate. No other provision of the Constitution displaces parliamentary control of public finance.
Section 211 — accounting for public money
- (1) All moneys of or under the control of the National Government for public expenditure — and of the Parliament and the Judiciary for their respective services — shall be dealt with and properly accounted for in accordance with law.
- (2) No such moneys shall be expended except as provided by this Constitution or by or under an Act of the Parliament.
Subsection (2) is the provision that makes unauthorised expenditure a constitutional wrong, not merely an accounting irregularity. The operative statute is the Public Finances (Management) Act 1995, with procurement governed by the National Procurement Act 2018.
Section 210 — executive initiative
Parliament shall not provide for the imposition of taxation, the raising of loans or the expenditure of public moneys except on the recommendation of the Head of State, acting on the advice of the National Executive Council.
And, subject to subsections (3) and (4), Parliament may reduce, but shall not increase or re-allocate, the amount or incidence of, or change the purpose of, any proposed taxation, loan or expenditure.
Where, in Parliament’s opinion, the proposed expenditure for the services of the Parliament or the services of the Judiciary is below the estimate submitted by the Speaker or the Chief Justice and is insufficient adequately to meet the requirements of that service, Parliament may increase it — up to the original estimate submitted under section 209(2B) — and may re-allocate, or reduce and re-allocate, appropriated expenditure for that purpose.
This is a structural protection: the Executive cannot starve the legislature or the courts by simply proposing a smaller number.
Section 212 — spending without prior approval
Section 212 addresses the situation where, at the beginning of a fiscal year, Parliament has not made provision for public expenditure. The Constitution does not permit the machinery of government to stop; it provides a controlled interim arrangement, with the amounts and conditions the section prescribes, until an appropriation is made.
Because the mechanics are technical and have been amended, read the current section 212 and the Public Finances (Management) Act 1995 directly before relying on it.
Who checks the spending
- The Auditor-General — inspects and audits, and reports at least once every fiscal year to Parliament on the public accounts and on transactions with public money and property.
- The Public Accounts Committee — examines and reports to Parliament on the same subject matter, and on the Auditor-General’s reports.
- The Ombudsman Commission — investigates wrong conduct, including conduct that is unreasonable, unjust or oppressive or based on improper motives, and enforces the Leadership Code.
- The Independent Commission Against Corruption — established by Division VIII.3.
- The National Economic and Fiscal Commission — on grants to and between Provincial and Local-level Governments (s 187H).
Sovereign Wealth Fund and resource revenue
Subdivision VIII.1.AA provides for a Sovereign Wealth Fund, and Subdivision VIII.1.AB deals with Papua New Guinea’s ownership of hydrocarbons and minerals. The Fund is established by the Organic Law on the Sovereign Wealth Fund 2015. Both connect directly to section 2(2), under which sovereignty over natural resources is and shall remain absolute, and to National Goal 4, which requires resources to be used for the collective benefit and held in trust for future generations.
Three routes exist, and they are not alternatives — all three can run. Complain to the Ombudsman Commission; bring the matter to the attention of the Auditor-General and the Public Accounts Committee; and, where an offence is involved, report it to the police. Section 28(5) provides that leadership proceedings are no bar to other proceedings, and vice versa.
Sources
Constitutional sections are amended. Before relying on anything here, read the current text: the Constitution on PacLII. If a decision matters to you, get advice — start with the Office of the Public Solicitor.