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.