Govt mulls basing budget on calender year

Govt mulls basing budget on calender year

JAKARTA (JP): Finance Minister Bambang Sudibyo said on Monday
the government was considering changing the current fiscal year
budget to one based on the calender year.

Speaking to reporters after a meeting of economic ministers,
Bambang said that his office was preparing two versions of the
budget for next year.

He said the first one was a calender year budget that will run
from April to December 31, 2000, while the second was a fiscal
year budget that will span from April to March 31, 2001, in case
the proposal to adopt the calender year budget is rejected.

Bambang said that although members of the House of
Representatives (DPR) had suggested using the calender year
budget, which runs from January to December, there had not yet
been any official decision.

"We'll look to consult with the leaders of the DPR," Bambang
said.

The argument for changing to a calendar year budget is to
simplify development planning and administration.

"We still haven't decided ... We have to make a complete study
of this proposal before the government decides whether to adopt
the calendar year," Bambang said.

Bambang also said the future state budget must reflect a
gradual decline in foreign loans.

He said that the role of domestic financing resources,
particularly tax, must be strengthened in the future to help
finance the state budget.

Bambang said earlier at the weekend that another way to lower
the dependence on foreign loans was to develop the domestic bond
market.

He said that the upcoming International Monetary Fund's letter
of intent would include a strategy on how to develop the bond
market.

The Indonesian foreign government debt is currently estimated
at more than US$67 billion.

The amount of foreign loans are expected to increase in the
current fiscal year ending in March 31, 2000 as the government
will need an additional $1.2 billion in overseas loans in the
remaining period of the fiscal year.

There has been increasing criticism over such large overseas
borrowing as it means that most of the country's economic
resources go to servicing the foreign loans.

Several non-governmental organizations have demanded that
foreign donors, particularly the World Bank, reduce the country's
debt by up to 30 percent, arguing debt had been corrupted by the
same amount at the hands of the previous government, with the
full knowledge of the donors.

Bambang also said that another alternative to dependence on
foreign loans was to lower subsidies.

The government has been subsidizing important items including
fuel.

There has been suggestions that the government must gradually
reduce expensive fuel subsidies to lessen the burden on the state
budget.

But lowering subsidies is easier said than done, as such a
measure could create massive unrest.(rei)