Tuesday, 15 September 2009

Allocation for Subsidy Fund of 2010 needs to be reviewed

The FBR fraction [of the FBR political party] at the House of Representative firmly evaluated that the allocation policy of subsidy fund as ingrained in the State Budget [APBN] 2010 needed to be reviewed at the forum of discussion of the Budget Committee of Parliament. This view was set forth by spokesperson of FPBR, Zulhendri Cahniago, upon presenting general review on the 2010 Budget at the Parliament grand session.

In spite of the fact that the National Budget Plan of 2020 showed deficit up to 1.6% the FBR fraction was of opinion that the subsidy budget for the lowest social strata should be maintained. However the allocation policy should be continuously improved to make it more focused. The allocation of budgetary fund in the National Budget Plan [RAPBN] 2010 was projected at Rp. 144.4 trillion or down by Rp. 15 trillion compared to subsidy allocation in National Budget Plan 2009. The sectors having reduction of subsidy fund were electricity, food, and fertilizers. Other cases of budget reduction was on account of Government’s plan to redesign subsidy policies. Under such circumstances, the FBR fraction reminded the Government to be more careful to prevent turbulence.

The Government seemed to be over-cautious in scheming up Budget Plan 2010 in stipulating the basic assumptions of macro economy and targeting state revenues. The Government’s prudence was reflected in the prediction of state revenues and grants for 2010 which was set up at Rp. 911.5 trillion or only increasing by Rp. 40 trillion from revised version of State Budget 2009. More over, even the State target of non tax income [PNBP] was only set as Rp. 180.9 trillion or down from the target of non-tax income in revised state budget 2009 amounting to Rp. 218 trillion.

Lowering of the Non Tax Income [PNPB] Target was caused by decrease in non-tax income of oil and gas as result of oil-gas recovery cost. This needed to be questioned, because in the discussion of State Budget Plan/Revision 2009 the Parliament asked BP Migas to press down recovery cost. In addition to that, the lowering of non-tax income target was caused by reduced profit deposit of State Owned Enterprises. Further PBR Party questioned the performance of State Owned Enterprises why the amount deposit to the state kept declining.

The FBR Fraction could understand deficit of State Budget Plan 2010 which reached Rp. 98 trillion i.e. 1.6% of GDP. Such a size of deficit was understandable considering the high need of state spending.

The educational budget remained to be allocated 20% form State Budget, in accordance with the content of 1945 Constitution. Budget for alutista of the Army [TNI] should be increased, and so was the development of infrastructure, agriculture, energy, and other sectors.

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