EOIN BLACKWELL | AAP
AS MUCH AS HALF OF Papua New Guinea's A$3.5 billion development budget over three years has been lost to graft or dodgy overseas investments, the head of the Pacific nation's government anti-corruption task force says.
Task Force Sweep chairman Sam Koim (pictured) says Australian financial institutions have been complicit by turning a blind eye to dirty monies being redirected to Australian connections.
A Task Force Sweep analysis of PNG's 7.6 billion kina development budget from 2009 through 2011 shows almost half was lost to corrupt practices by public officials and government departments.
"We have uncovered a lot of instances where there was no recourse to budget and people were spending money left, right and centre, squandering funds and using them for private purposes," Mr Koim told AAP today.
"Given the trend of corruption and seeing that there is nothing on the ground level to show for the expenditure of public funds, we have reason to believe that at least half of the budget we were investigating was wasted, mismanaged or stolen.
"Government systems and control mechanisms have, over time, been corroded. It is safe to say (the money) has been stolen."
Despite being often described as "an island of gold on a sea of oil" because of its abundant natural resources, the nation of seven million has heavily degraded infrastructure, poor health services and a severe lack of access to education.
Mr Koim, who has previously described Australia as PNG's Cayman Islands because of to the amount of money invested there, denied local media reports claiming most of the stolen funds had been invested in Australia alone.
However, he said Australian financial institutions had turned a blind eye to transactions and investments from high-profile PNG public servants and politicians on Australian shores.