Until the end of the year (fourth quarter), it is still common for\nthe procurement of goods and\/or capital expenditure processes to be\ncompleted right at the close of the fiscal year. At first glance,\nsuccessfully spending the budget sounds like an achievement.<\/p>\n
However, this pattern of accumulating expenditure at year-end\n(year-end spending dump) is actually \u201cdisadvantageous\u201d to the state and\nsociety. When disbursements are slow at the beginning of the year, state\nfunds essentially \u201clie dormant\u201d or can be termed idle cash in the State\nGeneral Cash Account (RKUN).<\/p>\n
In fact, the state budget is the \u201cfuel\u201d for the economic engine. When\ngovernment projects are delayed, the creation of new jobs and the\ncirculation of money in society are also delayed. Benefits that should\nhave been enjoyed by society from the beginning of the year are held\nback until the end of the year.<\/p>\n
Therefore, amid our priority to boost economic growth, this old\nmindset must be abandoned immediately. Merely chasing percentage targets\nto achieve 100% budget absorption at year-end is no longer relevant.<\/p>\n
We need a paradigm shift: From accumulating expenditure at year-end\nand simply spending money, towards planned and impactful quality\nspending (spending better). It is this focus on the quality of spending\nthat will ensure every rupiah spent truly delivers maximum economic\nbenefits to society.<\/p>\n
Shifting the Paradigm towards Spending Better<\/p>\n
In the management of the State Revenue and Expenditure Budget (APBN),\nthe old paradigm prioritised absorption percentages. This has been\nimproved with the implementation of performance-based budgeting, where\neach ministry\/institution has set output achievement targets for their\nspending performance.<\/p>\n
The financial performance success of ministries\/institutions is no\nlonger measured solely by how many rupiah have been spent, whether it\nexceeds the spending target or not, but also by the quality of budget\nplanning, the quality of budget execution, and the quality of budget\nexecution outcomes. When the spending percentage target is no longer the\nmain goal, it is hoped that development benefits can align with\nexpectations (outcome) and be maximally felt by society.<\/p>\n
In line with the above, the government is now continuously promoting\nthe transition to the spending better principle or quality spending.\nThis concept is not just about savings, but the application of the value\nfor money principle.<\/p>\n
This means that every rupiah disbursed from the state treasury must\nmeet three indicators: Economy (non-wasteful and productive\nexpenditure), efficiency (maximum output achievement with minimum\ninput), and effectiveness (program outcome achievement in line with set\ntargets) and executed at the right time.<\/p>\n
Correlation with Economic Growth: The Working of the Multiplier\nEffect<\/p>\n
Why is the quality and timing of state spending so crucial for the\neconomy? The answer lies in basic economic theory known as the\nmultiplier effect.<\/p>\n
As an illustration, when the government allocates capital expenditure\nfor public infrastructure such as roads or bridges, the flow of funds\ndoes not stop with the contractor. Project workers will receive monthly\nwages, which they will then spend on daily needs at shops around the\nproject.<\/p>\n
Shop owners whose income increases will use that money to buy raw\nmaterials at traditional markets, and market traders will spend it again\non other needs. One government spending transaction can trigger a long\nchain of money circulation in society. This is the essence of the\nmultiplier effect.<\/p>\n
The Urgency of Timeliness (Timing)<\/p>\n
The timing of expenditure execution is very determinant of how much\nthis multiplier effect works. If the government only disburses large\nbudgets in November or December, the chain of economic circulation does\nnot have enough space and time to work maximally in the current year.\nState money seems to \u201csleep\u201d in the state treasury for months without\nproviding any stimulus.<\/p>\n
Conversely, through spending better, the government is encouraged to\nrealise spending from the first quarter (January-March). With earlier\nand more planned spending execution, state money will have much longer\ntime to circulate, drive the real sector, create new jobs, and\nultimately, maximally boost national economic growth. State money is not\njust depleted as recorded in financial reports, but truly transforms\ninto an engine for societal welfare.<\/p>\n
Untangling the Knot: Obstacles and Acceleration Strategies<\/p>\n
Implementing the spending better concept theoretically sounds ideal,\nbut in practice, state budget execution is not as easy as turning the\npalm of the hand. In public finance theory, there is a basic principle\ncalled accountability, where every rupiah of state money spent must be\naccountable to the people.<\/p>\n
This strict principle of prudence often creates obstacles in the\nfield. Budget implementers in various government agencies sometimes face\npsychological hurdles in the form of fear of administrative errors that\nlead to audit findings or state losses.<\/p>\n
As a result, bureaucratic processes become very cautious and slow. In\naddition, large-scale goods and services procurement processes (such as\nbuilding or road construction) require selection or tender stages that\ncan take months.<\/p>\n
So, how does the state ensure budgets can be disbursed faster without\nviolating legal rules? The government implements several tactical and\nsystemic strategies.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/transforming-the-paradigm-of-state-expenditure-not-merely-chasing-absorption-1774651843", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }