By FRANK SENGE KOLMA
PRIME Minister Peter O'Neill has directed a halt on all moves to withdraw the financial powers of provincial governments, The National reports.
O'Neill said yesterday: "There is no NEC decision directing suspension or withdrawal of powers of any provincial government.
"If there is any allegation of financial mismanagement, there should be proper investigation conducted into the allegation first.
"We do not want to appear to be vindictive."
The prime minister's directive comes as the East Sepik and Morobe provincial governments go to court to challenge the withdrawal of their financial powers, apparently by a ministerial edict on Aug 12. The order is said to have been issued from the Finance and Treasury ministry.
The Morobe government, on Monday, sought and got an injunction preventing the national government from withdrawing its powers.
The East Sepik provincial government's bid to obtain a similar injunction was heard briefly yesterday and postponed to today.
The prime minister's stance is likely to affect these matters on foot and will prevent future moves against provincial governments without any good cause.
Meanwhile, Southern Highlands Governor Anderson Agiru said yesterday cabinet had no authority to withdraw financial powers of a provincial government except in a state of emergency or during a war.
He said this was established beyond any doubt by the Supreme Court when he challenged the suspension of his provincial government in October 2000 by the Mekere Morauta regime.
The court voided division 8 of the Organic Law on Provincial and Local Level Governments which purported to authorise the National Executive Council to withdraw powers or suspend provincial governments.
That provision, in its entirety, was found to be contrary to the dictates of the Constitution and was declared null and void.
Agiru said the purported withdrawal of financial powers of the East Sepik and Morobe provincial governments went against that Supreme Court decision.
He further said the purported action had sent fear and instability racing up and down provincial administrations nationwide.
"There has been no investigation into the financial affairs of provincial governments, no natural justice accorded .... just generalisations about misuse and abuse of powers and finances.
"As I have said before, the prime minister has all the credentials but his ministers are going astray and he needs to pull them into line."