The Bougainville House of Representatives has passed the Autonomous Region of Bougainville (AROB) Supplementary Appropriation Bill 2026, revising the government’s expenditure and revenue estimates to K628.86 million.

The adjustment follows a K138.59 million reduction in Bougainville’s 2026 funding allocation from the National Government. Passed following parliamentary debate today, the bill provides revised financial estimates for the fiscal year ending 31 December 2026.

Autonomous Bougainville Government (ABG) Minister for Finance and Treasury, Hon. Albert Punghau, described the supplementary budget as a necessary measure to align government spending with the reduced allocation.

“Mr Speaker, this is not a budget of new initiatives. It is a budget of necessity. It brings our appropriations back into line with the money we will actually receive,” Minister Punghau said.

The National Government’s Supplementary Budget of 1 September 2026 cut Bougainville’s allocation by 26.6 per cent, dropping it from K520.36 million to K381.77 million. The reductions include K18.59 million from operational expenditure—covering personnel emoluments, goods, and services—and K120 million from the capital programme, heavily impacting the Restoration and Development Grant (RDG) Arrears and the Annual RDG.

While Minister Punghau confirmed that teacher salaries, staffing grants, and allowances remain intact, the capital cuts will significantly stall development:

• RDG Arrears (K80 million cut): Removes a package of infrastructure projects and departmental programmes.

• Annual RDG (K40 million cut): Largely eliminates the K1 million per constituency Independence Readiness projects previously approved by Parliament.

Minister Punghau raised strong concerns over the RDG cuts, arguing they breach funding obligations under the Bougainville Peace Agreement and the Organic Law on Peacebuilding in Bougainville.

“The Restoration and Development Grant is not a discretionary allocation to be trimmed when the National Government needs money elsewhere. It is guaranteed by Paragraph 160 of the Bougainville Peace Agreement of 2001 and Section 49 of the Organic Law,” he stated.

In response, the Bougainville Executive Council has directed the Department of Finance and Treasury to formally seek an explanation from Waigani and request the restoration of the K138.59 million in the 2027 National Budget.

The department has also been tasked with pursuing outstanding 2026 commitments, including:

• K80 million under the Prime Minister’s Commitment

• K15 million for the Buka Solar Project

• K10 million for the Bougainville Policing Partnership Programme

• Outstanding District Services Improvement Program (DSIP) and Provincial Services Improvement Program (PSIP) allocations

Additionally, all ABG departments have been instructed to review their workplans, procurement schedules, and projects to stay within the revised budget ceilings, prioritising essential services and avoiding commitments against unwarranted funds.

During parliamentary debate, members highlighted the severe challenges posed by the funding cuts. They called for stronger internal revenue collection, improved performance by revenue-raising departments, and greater support for developments in the mining sector.

Minister Punghau concluded that the revised budget is essential to maintain responsible financial management as the ABG continues to strengthen its institutions, expand its revenue base, and prepare to assume greater government responsibilities.