President, VP get big pay boost<\/p>\n
JAKARTA (JP): The government and the House of Representatives
\nbudget committee agreed on Wednesday to raise the basic salaries
\nof President Abdurrahman Wahid and Vice President Megawati
\nSoekarnoputri by 78 percent and 120 percent respectively.<\/p>\n
This is part of the agreement reached by the two sides on
\nmajor changes in the April-December 2000 state budget, which is
\nexpected to be approved at a plenary House session on Thursday.<\/p>\n
According to a budget document leaked to the media,
\nAbdurrahman's basic monthly salary will be increased to Rp 26.7
\nmillion (US$3,814) from Rp 15 million at present.<\/p>\n
Megawati's basic salary will be raised to Rp 22 million from
\nRp 10 million, those of the Speakers of the House and People's
\nConsultative Assembly to Rp 14.6 million and Cabinet ministers to
\nRp 12.6 million from Rp 2.5 million at present.<\/p>\n
The basic salaries of legislators and other senior state
\nofficials will increase to Rp 8 million from around Rp 2.1
\nmillion.<\/p>\n
The government and the House budget committee, however, failed
\nto decide on the amounts of allowances and other perks for senior
\nofficials which will make up their gross take-home pay.<\/p>\n
But based on the current pay structure, the President gets, on
\ntop of his monthly basic salary, a family allowance amounting to
\n14 percent of the basic salary, a senior official allowance
\namounting to 35 percent of the basic salary and additional perks
\namounting to a lumpsum of Rp 10 million.<\/p>\n
Assuming that the present pay structure remains unchanged,
\nraising Abdurrahman's basic salary to Rp 26.7 million would
\nprovide him with a gross take-home pay of Rp 49.77 million,
\ncompared to almost Rp 33 million now. Megawati will get almost Rp
\n40 million.<\/p>\n
Based on the same pay system, the increase would give a
\nCabinet minister a monthly gross take-home pay of 20.5 million,
\ncompared to Rp 5.6 million at present.<\/p>\n
The increase is, however, much less than the fourfold raise
\noriginally proposed in January for the President, the fivefold
\nraise for the Vice President and the tenfold rise for Cabinet
\nministers, which were sharply criticized by legislators and
\nanalysts.<\/p>\n
\"The salary raises are aimed at helping to create a clean
\nadministration and prevent corruption,\" said deputy of the House
\nbudget committee Abdullah Zainie on Wednesday.<\/p>\n
The government and the House had earlier agreed to raise the
\nsalaries of government employees, state police and the military
\nby 30 percent, higher than the initial 20 percent hike proposed
\nby the government in January.<\/p>\n
The government has been determined to gradually raise the pay
\nof bureaucrats in a concerted effort to fight rampant corruption
\nin light of building up good governance.<\/p>\n
Major changes in the 2000 state budget which have yet to be
\napproved at a plenary House session on Thursday include:<\/p>\n
Total state spending will increase to Rp 197.03 trillion from
\nRp 186.07 trillion proposed in the January-version budget draft,
\nparticularly to finance a greater amount of subsidies and a
\nlarger increase in the salaries of civil servants.<\/p>\n
State revenues will rise to Rp 152.90 trillion from Rp 137.70
\ntrillion on the back of higher oil and tax revenue targets.<\/p>\n
The estimated deficit of the nine-month state budget will
\ndecline to Rp 44.13 trillion or 4.8 percent of gross domestic
\nproduct (GDP), compared to 5 percent of GDP previously.<\/p>\n
The deficit will be primarily financed by foreign loans,
\nprivatization proceeds and the sale of assets under the
\nIndonesian Bank Restructuring Agency (IBRA).<\/p>\n
The House is scheduled to approve the state budget on
\nThursday, although several political parties have hinted that
\nthey would oppose the planned 12 percent increase in fuel prices.<\/p>\n
A number of legislators have opposed any increase in fuel
\nprices amid the current economic hardship.<\/p>\n
Unlike over the past 30 years, the House has critically
\nassessed the draft budget over the past month. Fuel and
\nelectricity subsidies have been one of the most contentious
\nissues during the debates.<\/p>\n
The government earlier proposed an Rp 18.3 trillion fuel
\nsubsidy with an assumption that fuel prices would be raised by 20
\npercent. But after intense debate, the government and the budget
\ncommittee finally agreed to a 12 percent increase in fuel prices
\nthat would result in a total subsidy of Rp 22.46 trillion.<\/p>\n
The government also agreed to raise the oil export price
\nassumption in the budget from $18 per barrel to $20 per barrel to
\nallow for greater oil revenue to finance the larger amount of
\nfuel subsidy.<\/p>\n
Some legislators had earlier demanded a Rp 24 trillion fuel
\nsubsidy so that the fuel price increase would be limited to 10
\npercent. But others argued that a portion of the greater amount
\nof oil revenue should also be allocated for subsidies on other
\nsectors.<\/p>\n
The state budget allocates Rp 8.37 trillion for the subsidy of
\nelectricity, food and credit for small-scale businesses. This
\nfigure was unchanged from the level proposed earlier.<\/p>\n
Several economists have criticized the subsidy for fuel
\nbecause that amount of large spending would not generate
\nemployment.<\/p>\n
But legislators reasoned that a big increase in the fuel
\nprices might cause massive unrest in the country.<\/p>\n
The government and the budget committee also agreed to reduce
\nthe interest rate burden of the government bank recapitalization
\nbonds in the 2000 state budget to Rp 38 trillion from Rp 42.36
\ntrillion.<\/p>\n
The budget committee demanded that the government delay a
\nfurther issuance of the recapitalization bonds pending a complete
\nreview of the bank recapitalization policy.<\/p>\n
The House also urged the government to take strong measures
\nagainst bad bankers.<\/p>\n
But finance minister Bambang Sudibyo said the government would
\nnot delay the bond issuance as it might affect the whole bank
\nrestructuring program.<\/p>\n
\"They're only asking us to make a complete review before
\nissuing new bonds ... There's no delay, it's not a problem,\"
\nBambang told reporters.<\/p>\n
The government has recapitalized several major private and
\nstate banks. The government plans to recapitalize other banks
\nthis year by issuing new bonds.<\/p>\n
The interest cost of the bonds for this year alone was
\ninitially estimated at more than Rp 42 trillion.<\/p>\n
The macroeconomic assumptions used for the state budget were
\nunchanged.<\/p>\n
Estimated economic growth (GDP) remains at 3.8 percent,
\ninflation 4.8 percent and the exchange rate of the rupiah against
\nthe U.S. dollar at Rp 7,000. (rei)<\/p>",
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