Aid for the poor

Most taxpayers who are eligible to pay compulsory donations to help poor families have expressed full support for the objective of President Soeharto's latest initiative to step up the poverty- alleviation drive. They are undoubtedly aware of the urgency of more equitable distribution of incomes because they fully realize that national stability -- one of the basic prerequisites to sustainable development -- can be maintained only if all members of society share the fruits of economic development.

In fact, the national stability we have enjoyed over the past 30 years should be attributed to the emphasis placed on agricultural and rural development right from the outset of the first Five Year Development Plan in 1969.

The House of Representatives has always supported special programs in the annual state budget which were designed specifically to help poor families. Because there are always groups of people unable to benefit directly from economic development, special efforts are needed to help them share in economic growth.

There have, however, been different views on how the funds to help the poor should be raised, used and accounted for. No wonder most of the reservations regarding President Soeharto's Decree No. 92/1996 reflect great concern about transparency and accountability for the funds to be collected.

Since the decree now makes it compulsory for corporate and individual taxpayers, with after-tax incomes or profits exceeding Rp 100 million (US$42,700) a year, to give 2 percent of their after-tax incomes to help poor families, the nature of the fund- raising campaign has changed. What is defined by the decree as donations are seen by taxpayers simply as taxes which, by virtue of the Constitution and tax laws, should be administered and accounted for in the state budget.

We fully understand and support the President's great concern -- which often reaches the point of obsession -- to abolish poverty. He obviously has been disappointed by the lack of response to his moral suasion, through a decree (No.90/1995) last December, for individual and corporate taxpayers of top income brackets to donate 2 percent of their net incomes or profits to the poor.

We reckon that no eligible taxpayer has complained about the extra burden imposed by the President's move. After all, the country's highest income tax rate (30 percent) is lower than those in many other nations. It is the manner in which the 2 percent donation has been imposed that is raising questions.

No taxpayer has questioned the credibility or goodwill of the Yayasan Dana Sejahtera Mandiri foundation which was founded early this year by President Soeharto (in his personal capacity) and several business leaders to manage donations to the poverty- alleviation program. Soeharto himself affirmed, during the foundation's establishment, that all donations to the foundation would be managed transparently and publicly accounted for. The foundation's executives include personalities who are well known for their great concern for the poor. They include tycoons such as Soedono Salim, Sudwikatmono, Anthony Salim and several cabinet ministers. Businessman Bambang Trihatmodjo, who is treasurer of the ruling Golkar group, also acts as treasurer of the foundation.

But now that the donations have become compulsory, we see some benefit in the suggestion that the funds be managed and accounted for in the state budget. This, we think, supports the House's campaign to make the government improve its budgetary discipline and facilitate the process of building institutional checks and balances. Accountability under the state budget, which must be approved by the House, would also avoid unnecessary questions about the fund- raising campaign, especially in the run-up to the general election in May.