Budget revision still unclear

Budget revision still unclear

Urip Hudiono, The Jakarta Post, Jakarta

Despite a thawing in the once icy relationship between the
government and the House of Representatives, the administration's
plan to revise several assumptions in the 2005 state budget could
still face challenges from legislators.

House finance commission chairman Paskah Suzetta said on
Friday that the government should not be in such a rush to make
the revisions.

"We realize the need to revise several assumptions, like the
oil price assumption, but the government should try its best to
first meet the targets in the budget," he said.

The previous Megawati administration had drafted the budget on
the basis that the new House members and the administration
elected in the 2004 elections might not have enough time to
redraft it from scratch within the two months left before the
start of the new fiscal year in January.

The budget projects economic growth of 5.4 percent, a rise
from 4.8 percent this year, and an inflation rate of 5.6 percent.
The deficit is projected to decline to 0.8 percent of gross
domestic product from 1.2 percent this year based on an oil price
of US$24 per barrel.

Several Cabinet members have suggested the need to revise the
budget, saying that the recent rise in global oil prices to up to
$50 had made the budget targets unrealistic.

Paskah, from the Golkar Party, further said that it would be
better for the government to work based on the budget and to
undertake a thorough view of the country's economic progress
before proposing budget revisions.

"It would be better if they (the revisions) were carried out
some time in July," he said, referring to the month in which the
administration usually consults with legislators on whether
revisions of the current budget are needed.

However, legislator Dradjad Wibowo, from the National Mandate
Party (PAN), said that the government should revise the 2005
budget as soon as possible, unless it felt comfortable with it.

"The ball is now in the government's hands," he said. "They
should propose the revisions now so the House can discuss them
before the budget comes into effect in January."

Dradjad, who is also an economist at the Institute for the
Development of Economics and Finance (Indef), maintained that the
revision of the budget was necessary to rectify a number of
flawed assumptions.

"We will present our arguments for the revisions and push for
a vote if needed," he said.

The House is split between the Nationhood Coalition (Golkar,
PDI-P, PDS, and the PKB) and the pro-government People's
Coalition (the Democratic Party, PAN, PKS, and PPP).

The government and the House have lately been involved in
several political stand-offs, but reached a compromise when both
recently agreed to extend the civil emergency in Aceh.

Elsewhere, economist Pande Raja Silalahi from the Center for
Strategic and International Studies (CSIS), said that revisions
were a must, whatever the situation between the government and
the House.

"The new administration has its owns programs -- setting up
new ministries and converting fuel subsidies into direct
development funds -- and its own budgetary needs," he said.