1994/95 budget to post surplus of Rp 10.4 billion
1994/95 budget to post surplus of Rp 10.4 billion
JAKARTA (JP): The 1994-1995 state budget is likely to record a small surplus of Rp 10.4 billion (US$4.8 million), as compared with a deficit of nearly Rp 1.8 trillion ($837 million) in the 1993-1994 fiscal year.
Minister of Finance Mar'ie Muhammad estimated yesterday that total revenues would surpass the budget target by about 3.7 percent to reach Rp 72.35 trillion for the 1994-1995 fiscal year, which ends this month.
Overall spending is also expected to exceed the original projection of Rp 69.74 trillion to reach around Rp 72.34 trillion, the minister said.
"As realized, the 1994-1995 budget is estimated to record a surplus of about Rp 10.4 billion, as the growth of revenues will be much higher than the growth of spending," the minister told a plenary session of the House of Representatives.
The minister presented provisional figures on the realization of the state budget this fiscal year.
The House, which recently approved the draft budget for 1995- 1996, will further discuss the realization of the 1994-1995 state budget next week.
Revenues and spending under the 1994-1995 budget are projected to balance at Rp 69.74 trillion and any change in the actual budget should be approved by the House.
The minister said that the higher-than-expected state revenues were a result of an unexpectedly large number of receipts, both from domestic sources and from foreign loans.
The revenues from domestic sources, mostly from taxes and levies, are expected to exceed the original estimate of Rp 61.36 trillion by 2.7 percent, while those from foreign aid are likely to surpass the budget target by about 9.7 percent, to reach Rp 10.98 trillion.
The minister said that domestic revenues would be larger than the original estimate because oil and tax gas revenues would most likely be higher than those estimated in the budget.
Oil and gas receipts would be larger thanks to an increase in the average price of Indonesia's crude oil exports to $16.53 per barrel, as compared with the budget estimate of $16 per barrel, the minister said.
The rise was also generated by an increase in the volume of crude oil exports to 1.6 million barrels, as compared with a the budget estimate of 1.53 million barrels.
Higher
"The overall receipts from the oil and gas sector are, therefore, estimated to reach Rp 13.39 trillion, or about 4.3 percent higher than the target," the minister said during the plenary session, which was attended by all the House's four factions -- the ruling Golongan Karya (Golkar), the Moslem- dominated United Development Party (PPP), the Indonesian Democratic Party (PDI) and the Armed Forces (ABRI).
The overall revenues in from taxes and levies from sectors apart from oil and gas, and from dividend payments by state-owned companies, are expected to surpass the budget target by around 2.3 percent, to reach Rp 47.97 trillion.
"The rise in the non-oil tax receipts was generated by larger proceeds from value added and property taxes," Mar'ie said.
Receipts from all categories of tax, apart from income tax, had surpassed budget projections, the minister said.
The minister acknowledged that receipts from income tax would fall short of their target as a result of the introduction of the new tax law in January, which reduced income tax rates to 10 percent (from 15 percent) for the lowest income bracket, 15 percent (from 25 percent) for the medium income bracket and 30 percent (from 35 percent) for the top bracket.
Spending
On the expenditures side, Mar'ie said that routine spending was expected to exceed the budget target by two percent to reach Rp 43.17 trillion, partly due to higher-than-estimated personnel spending.
Government spending on foreign debt servicing and installments is likely to exceed the target by 2.5 percent to reach Rp 18.42 trillion, as a result of the early retirement of several high- interest loans.
"The prepayment was essential to reduce the loan burden from high-interest rate debts," the minister said.
The state budget for the 1993-1994 fiscal year was marred by a deficit of nearly Rp 1.8 trillion due to a higher-than-expected increase in routine government expenditure and an 0.5 percent shortfall in oil and gas receipts as a result of a drop in oil prices.
Because the law requires the state budget to balance, the government was forced, last fiscal year, to dip into its cash reserves to cover the deficit. (hen)