2006 budget passed with few snags

2006 budget passed with few snags

rip Hudiono, The Jakarta Post/Jakarta

All ended well for the government's proposed 2006 state budget,
with the House of Representatives passing the budget draft into
law on Friday.

In a plenary session that began at 9 a.m. and lasted for some
eight hours, nine of the House's 10 factions accepted the
proposed budget draft, attaching several notes for the government
to address in its implementation in January.

Only the opposition Indonesian Democratic Party of Struggle
(PDI-P) faction refused to support the draft, with members
detailing a list of criticisms of it.

The plenary session had reached the required half-attendance
quorum of the House's 550 members, but only some 100 returned
after the Friday prayers break.

The House's Budget Committee had earlier approved the draft
after a two-month long deliberation with the government, whose
final report was submitted to the plenary session by chairman
Emir Moeis of the PDI-P.

The budget targets Indonesia's gross domestic product (GDP) to
grow by 6.2 percent to Rp 3,040 trillion (some US$304 billion)
next year, on higher development spending and assumes a deficit
of Rp 22.4 trillion, or 0.7 percent of the GDP.

It is the first budget deliberation for both President Susilo
Bambang Yudhoyono's administration and the 2004-elected House.

The previous administration of former president Megawati
Soekarnoputri and the 1999-elected House earlier deliberated and
approved the 2005 state budget.

That budget turned into a financial, and political, nightmare
for the new government as soaring global oil prices forced it to
twice revise what was a demonstrably unrealistic set of
assumptions -- the first time in the country's history.

But the 2006 state budget deliberation had its own intrigue
too, with a last-minute controversy -- a significant rise in next
year's stipends for legislators and for the Presidential budget
-- at a time when the public is struggling to cope with
increasing prices after the Oct. 1 fuel price hike.

Minister of Finance Jusuf Anwar said the President had told
him to cancel the increases and make the needed adjustments
through the mid-year budget revision mechanism.

Besides the budget increase issue, all of the House factions
also urged the government to fulfill the Constitutional Court's
recent ruling, mandating the education budget be increased to a
minimum 20 percent of total expenditure.

A group of 45 House members, including deputy House speaker
Zainal Maarif who chaired Friday's plenary session, had submitted
an official letter, stating their strong disappointment in the
House leaders and the government.

Next year's budget only allocates some Rp 40 trillion to the
education sector, less than 10 percent of total spending, and
even lower than the planned 12 percent that the government had
previously presented to the House.

Jusuf said the government has consulted with both the court
and the House on its efforts to meet the requirement. "The court
understands the current budget's condition (of the government)
only being able to afford a gradual education budget increase,"
he said.

Despite their acceptance of the budget draft, the factions
also questioned whether next year's Rp 54.2 trillion fuel subsidy
allocation would be enough, without the country having to go
through another series of fuel price hike like this year.

They urged the government to be more prudent in next year's
budget implementation, basing it on performance-based criteria by
setting specific targets -- such as unemployment rate reductions
and human development index rating improvements in a year.