City recovery program funds too small, say councillors
Ahmad Junaidi, The Jakarta Post, Jakarta
The allocation of Rp 456.59 billion for the economic sector in the 2003 draft city budget was too small and would not help to revive the Jakarta economy, councillors said on Wednesday.
"The amount is not proportional. It will not support the city's priority plans for this year's economic recovery program," councillor A. Rahman of the council's Commission D for development affairs said.
With revenues standing at Rp 8.89 trillion, mostly contributed by taxpayers, Rahman of the United Development Party (PPP) viewed the Rp 456.59 billion allocation as being too small.
He questioned what he described as the inadequate allocation for small and medium enterprises (SMEs), which amounted to about Rp 26 billion compared to an allocation of Rp 136 billion for public order officers.
"Our faction will demand that the city allocate more funds to encourage economic activities," said Rahman, who is a former executive of city-owned developer PT Pembangunan Jaya Ancol.
City Governor Sutiyoso officially submitted the draft budget, which amounts to Rp 11.05 trillion, to the City Council on Tuesday evening.
According to the draft, Rp 456.59 billion will be used to finance the development of fish market facilities in Muara Angke, North Jakarta, the management of street traders and SMEs, and domestic and international tourist, industry, trade and investment promotions.
The 2003 Annual Jakarta Development Plan (Repetada) did not mention any incentives for encouraging business, besides programs such as the renovation of industry and trade offices and the construction of a trade promotion building in Klender, East Jakarta.
Councillor Dani Anwar of the Justice Party supported Rahman, saying that the city was not serious about the economic recovery program.
"What can you expect regarding economic recovery with this type of money," asked Dani, who is the secretary of the council's Commission C for economic affairs.
He said his faction would urge the administration to allocate more money for recovery programs.
But Ritola Tasmaya, the city secretary, said that the funds for the recovery program amounted to more than the Rp 456.59 billion as there were other development funds allocated to each of the agencies involved in helping restore the city's economy.
The Rp 11.05 trillion budget was made up of vehicle tax of Rp 2.7 trillion, hotel and restaurant tax of Rp 528 billion and entertainment tax of Rp 20 billion.
The budget was also aided by revenue-sharing with the central government with Rp 3 trillion coming from property and income taxes and Rp 901 billion from the General Allocation Fund (DAU).
As this year's forecast revenue will only amount to Rp 8.89 trillion out of the overall budget of Rp 11.05 trillion, the deficit would be financed by unspent funds amounting to Rp 2.2 trillion from last year's budget.
Many observers criticized the administration for raising the budget to Rp 11.05 trillion from last year's Rp 9.7 trillion given that it had not been able to use Rp 2.2 trillion from last year's budget.
In order to reach it's revenue target, the administration increased vehicle tax from 1 percent to 1.5 percent of vehicle sale value.
It also increased the property tax last year by between 100 percent and 300 percent, depending on the location of the property.
The administration has repeatedly said that the tax increases were necessary under central government regulations. It earlier said that vehicle and property tax formulae were applied uniformly across the country.