Polye sidelined to fight 'corruption'

PAPUA New Guinean Prime Minister Peter O’Neill has “temporarily” taken control of all financial matters from Treasurer Don Polye due to failures with landowner payments under the PNG LNG project and cost overruns at the Ministry of Finance.
Polye sidelined to fight 'corruption' Polye sidelined to fight 'corruption' Polye sidelined to fight 'corruption' Polye sidelined to fight 'corruption' Polye sidelined to fight 'corruption'

The move makes O'Neill the country's finance minister as well as PM, while Polye will remain as PNG's treasurer and border development minister.

Whether there could be wider political consequences is not yet known but Polye is a highlands powerbroker and played a crucial role in ending the reign of the Somare government back in August last year.

O'Neill's decision to strip the finance portfolio from Polye on Monday follows PNG LNG-related landowner protests at the Morauta Haus government office complex on Friday.

According to The National, Polye told landowners they would be paid their infrastructure development grants and the funds were not "cash handouts" but were for projects such as roads, bridges, schools and health clinics.

Yesterday Polye reportedly revealed at least 129 million kina ($A58.8 million) of IDG funds had been disbursed outside approved processes and promised an investigation - perhaps the final trigger prompting O'Neill to take over the finance portfolio.

In a letter to Polye, O'Neill said his decision was due to recent events concerning the payout of landowner funds and Polye's inability to reign in over-expenditure in his department.

"This decision is in light of complaints in relation to various landowner funds as per the state's responsibilities and commitments under the Oil and Gas Act and umbrella benefits sharing agreement and various licence-based benefit sharing agreements under the PNG LNG agreement," O'Neill said.

"Furthermore, the continuing lack of ability by the Department and Ministry of Finance to contain expenditure overruns outside of the budget appropriations has not abated since I wrote you [Polye] last."

O'Neill said the decision was taken as part of a commitment to "fight corruption at all levels".

In a sign of possible tension, "sources close to Polye" told the Post-Courier that the drawdown of the budget was approved by O'Neill and Polye should not be blamed for the budget overrun.

While O'Neill had not revealed when Polye might regain the finance portfolio, he reportedly hinted to The National that a major cabinet reshuffle was "imminent".

Polye was part of the dominant National Alliance party under the Somare government and had since formed his own party, the Triumph Heritage Empowerment party, for the next election which was scheduled for midyear.

Deputy Prime Minister Belden Namah recently flagged that the election could be delayed by up to six months, with a formal decision in Parliament expected on March 20.

Separately, the Supreme Court ruled that Sir Michael Somare was the rightful PM in December.

Various legal matters over the constitutional crisis are before the court but O'Neill remains the effective PM.

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