One of the biggest problem
faced by the Government today was keep ratio of budget deficit within safe and
healthy corridor in this case the Government was determined to maintain ration
of budget deficit in the range of 2.3% - 2.4% of GDP. This range was still
below 3% as safe level as agreed by OECD (Organization of Economic and
Cooperation Development).
The Minister of Finance Agus Martowardoyo who represented
the Government would take extra measures to keep budget deficit from swelling
for example by not drawing stand by loan because it would be used for covering
budget deficit.
So far commitment to stand by loan received by the
Government came to USD 5 billion broken down as follows Japan Bank for
international Cooperation (JBIC) USD 1.5 billion, the World Bank USD 2 billion,
Asian Development Bank (ADB) USD 500 million and Australia USD 1 billion.
In addition to that the Government also had additional
fund and reserve fund to cover up budget deficit. In the State Budget revised
version (APBN-P) 2012 allocation for reserve fund for energy risk was Rp 23
trillion.
Prognoses of the Ministry of Finance had it that
realization of state’s income and grant this year came to Rp 1,362,40 or 0.31%
higher than APBNP 2012 estimated at Rp 1,358.20 trillion.
State’s expenditure was estimated at Rp 1,548 trillion or
0.32% lower than the targeted Rp 1,553.20 trillion. This year’s budget was
predicted to suffer deficit of Rp 190.80 trillion or 2.3% of GDP, higher than
the targeted 2.23%.
In line with efficiency measure to be done by the
Government, in fact employees expenditure could be saved up to 30% of total
budget which was stipulated after calculating all salaries and remuneration.
Total employees expenditure was only 70% of budget stipulated by the
Government. This figure was inclusive of salary increase, benefits and
remuneration.
Therefore, most probably the Government would reduce over
budgeted spending. Reduction of expenditure was not focused on fixed
expenditure like salary and benefits, but on supportive expenditures which was
merely ceremonial.
Furthermore
increased employee’s salary was more benefited by high raking employee instead
of law employees and therefore not contributive to promoting economic growth
because it did not lift up people’s purchasing power.
Beyond
employees expenses, expenditure for goods could still, such as travel expenses
and procurement of equipments and office stationeries. Travel expenses could be
slashed more since many of them were not important, for executives or
legislatives.
However,
it was noteworthy that capital expenditure would have its negative impact on
Indonesia’s economic growth. For that matter the Government must find solution
so absorption of capital spending which had not been too good could run better.
The objective was that capital spending might serve as uplifter of economic
activities so growth might reach 6.3% to 6.5% this year.
Capital
expenditure would be included in investment budget. Slashing of capital
expenditures would but stagnate economic growth at around 6.0%-6.3%. The point
was that Government spending must serve as stimulus to national economy amidst
lowered export performance and investments.
Prognoses
of the Ministry of Finance had it that realization of employees expenditure
till end of this year was Rp 206.3 trillion or 97.2% of assumption of State
Budget 2012 at Rp 213.3 trillion. Meanwhile realization of goods expenditure
was estimated at Rp 170 trillion or 91.1% of the targeted Rp 186.6 trillion,
capital spending was Rp 153.4 trillion or 90.9% of the targeted Rp 168.7
trillion. Total expenditure for subsidy was estimated at Rp 346.9 trillion or
141.6% of the targeter at Rp 346.9 trillion or 141.6% of the targeted Rp 245.1
trillion.
In
addition to other expenditures, total Government’s expending this year was
estimated at Rp 1,070.80 trillion or 100.1% of Government’s spending was only
0.1% above target, although subsidy was estimated at 41.6% higher than target.
This was because the Government had re-allocated budgets. It would be
justifiable for the Government to re-allocate spending based on need, as long
as the spirit to propel economic growth remained there.
Even
in the extreme case assuming the Government were willing, they could run
austerity plan in all expenditure posts based on priority scale. Admittedly
without increasing price of subsidized oil it was kind of hard for the
Government to manage state budget effectively.
About
budget for the educational sector which was allocated at 20% of APBN Budget,
the utilization could be maximized including for educational infra-structures
like school building, laboratories, sports venues and workshop for training and
educational and training centers (diklat) for departments or ministries. Hence
physical infra structure building in the educational sector might lessen burden
of infra structure financing as a whole.
Business News, WEDNESDAY - July 18, 2012
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