Wednesday, 16 September 2009

Absorbability of Housing Subsidy for 2009 did not Achieve Target

State Minister for Public Housing, Moh. Yusuf Asy’ari, estimated that absorbability of housing subsidy in 2009 would only reach Rp. 1.5 trillions due to the effect of 2008 global crisis on the national housing sector. “It was difficult to achieve target, therefore we will submit a proposal for re-allocation of budget”, he said in a meeting with House’s Commission V.

Low absorbability of housing subsidy in 2009 was also due to the supply of landed houses (Rsh and Rusunami) not as expected. High bank rate in early part of this year, liquidity problem, and difficulty in obtaining construction credit caused difficulty to developers to expand businesses. And, low absorbability of housing subsidy was also due to decrease or commercial interest rates.

In fact, in early part of this year, BI rate and interest rate remained high, but at present they went down, and it made subsidy claim now. Other factors that caused low absorbability of housing subsidy was un-optimal allocation of subsidy for private residences. Based on the above, the State Ministry for Public Housing proposed a re-allocation of subsidy of Rp. 1 trillion for other programs, such as moratorium.

Secretary of the State Ministry for Public Housing said that the proposal had been submitted to the Ministry of Finance. It was necessary to increase absorbability of subsidy. “We expect that now we still have the time to implement this program”, he said. This is an attempt taken by the State Ministry for Public Housing in order to maximize absorbability of subsidy.

Low absorbability of subsidy was also as a result of coordination with housing stakeholders which indicated that housing development rate would not achieve target. The amount of subsidy set by the government for 2009 was Rp. 2.5 trillions. This amount was to support construction of 170,000 Rsh and 44,000 Rusunami. But, because of the global economic crisis, amount of supply decreased by around 30%. Meanwhile, Chairman of Central Board of Association of Indonesian House and real Estate Developers (Apersi), Fuad Zakaria, stated that the government’s action to re-allocate unabsorbed subsidy fund on other programs was unnecessary if government’s plan at the early part of the year was well prepared.

He continued that a plan should be carefully prepared and consider future possibilities.

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