Govt asked to revise budget assumptions<\/p>\n
Urip Hudiono, The Jakarta Post, Jakarta<\/p>\n
All 10 factions at the House of Representatives requested the
\ngovernment to revise its macroeconomic assumptions, particularly
\noil prices, saying they were \"unrealistic\".<\/p>\n
In a plenary session on Tuesday to hear the factions' opinions
\non the proposed budget, the House also urged the government to
\noverhaul its budgetary priorities, reducing allocations for
\nforeign debt payments and instead putting aside more funds to
\nimprove the country's education, health and infrastructure
\nsectors.<\/p>\n
The Golkar Party faction -- despite the fact that its chairman
\nis Vice President Jusuf Kalla -- strongly criticized the proposed
\nbudget, with particular emphasis on its assumptions on the price
\nof oil and rupiah exchange rate.<\/p>\n
\"We will propose more rational assumptions that reflect the
\ncurrent situation during the draft budget's deliberation,\" Golkar
\nspokeswoman Retna Rosmanita Situmorang said.<\/p>\n
In the 2006 state draft budget, the government targets 6.2
\npercent economic growth and a full-year inflation rate averaging
\n7 percent, based on an oil price assumption of US$40 a barrel, a
\nrupiah exchange rate of Rp 9,400 a dollar, a key interest rate of
\n8 percent and oil production of 1.075 million barrels per day.<\/p>\n
Golkar, which controls 129 of the House's 550 seats, also
\nasked the government to maintain the country's fuel subsidy,
\nquestioning why it had only put aside Rp 68.5 trillion (US$6.85
\nbillion) for the fuel subsidy for next year.<\/p>\n
Several senior economic ministers have expressed concern that
\nthis year's fuel subsidy will exceed the Rp 76.5 trillion
\nallocation and strain the budget, as oil prices continue to soar
\nover $60 a barrel and the rupiah has slumped at Rp 10,000 to the
\ndollar.<\/p>\n
Kalla even hinted at cutting the fuel subsidy through another
\ndomestic fuel price hike by January at the latest, following
\nMarch's fuel price increase.<\/p>\n
The Democratic Party faction, which facilitated President
\nSusilo Bambang Yudhoyono's rise to power, questioned the overly
\noptimistic 6.2 percent economic growth next year, considering
\nthat this year's 5.9 percent will not likely continue on an
\nexpected global economic slowdown.<\/p>\n
Meanwhile, the Indonesian Democratic Party of Struggle (PDI-P)
\nfaction, which controls 109 seats at the House, said the
\nassumptions used in the proposed budget \"were extremely
\nunrealistic\".<\/p>\n
\"It also reflects the government's incompetence in predicting
\nthe current situation,\" PDI-P spokesman Djoemad Tjipto Wardoyo
\nsaid, adding that the government should have put the rupiah at a
\nmore reasonable rate of between Rp 9,700 and Rp 10,070.<\/p>\n
PDI-P also said that the government should put the inflation
\ntarget lower than economic growth, so as to not to affect the
\npublic's purchasing power and welfare.<\/p>\n
Meanwhile, the National Mandate Party (PAN) faction warned the
\ngovernment not to deliberately use the unrealistic budget draft
\n\"to put the blame on the House if an unpopular policy needs to be
\ntaken to revise the budget\".<\/p>\n
Following the fuel price hike in March, the House was involved
\nin a lengthy debate as to whether to endorse the government's
\ndecision and approve an oil price revision from $24 a barrel to
\n$35. The oil price was eventually revised to $45.<\/p>\n
The Ministry of Finance is expected to deliver the
\ngovernment's response to the factions' opinion on Aug. 30. The
\ndraft budget will then be deliberated with the House's Budget
\nCommission, and is expected to be endorsed by September.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-asked-to-revise-budget-assumptions-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}