Govt to get 50% Pertamina dividend
Tantri Yuliandini, The Jakarta Post, Jakarta
The House of Representatives on Tuesday decided on a proposal to increase the government's dividend from state-owned oil and gas company Pertamina to 50 percent of net profits up from the previous 10 percent.
Chairman of the House's state budget committee Benny Pasaribu said that the hike in the dividend was necessary to provide more funding for expenditures such as maintenance costs, teachers' wages, and for poverty eradication programs.
"There is no way (to fund these expenditures) other than to increase domestic earnings and minimize other expenditures ... otherwise we would have to request more foreign loans," he said on the sidelines of a hearing with Minister of Finance Boediono and Minister of Energy and Mineral Resources Purnomo Yusgiantoro on the 2002 state budget.
Pertamina has forecast a net profit of Rp 4.6 trillion (US$459.4 million) for next year. Last year it recorded Rp 4.98 trillion in net profits.
Benny admitted that the government may not be able to make a decision immediately on the proposal, but that he hoped it would eventually agree to the dividend increase.
"We will give the government time to implement the dividend ... we realize that the minister of finance may not be able to decide right away," he said.
Benny also noted that with the increased dividend percentage, the government would need to revamp the 1987 governmental decree which stipulates that the government is entitled to a 10 percent dividend of Pertamina's net profits.
Other state-owned enterprises are required to pay between 45 percent and 50 percent to the government.
Minister of Finance Boediono said that he would have to consult with other economic ministers before making the final decision.
He added that the government had initially proposed the hike to be 25 percent of Pertamina's net profits because that percentage was "the safest" to ensure the company's continuity.
An increase in the government's dividend portion would mean less money for Pertamina to conduct future expansion, increase production capacity, and finance projects such as exploration for new oil fields.
Minister of Energy and Mineral Resources Purnomo Yusgiantoro said that he does not yet know the number of investment plans and programs that needed to be scrapped because of the increased dividend.
"There are ongoing exploration programs ... and we do not know if we can continue those, we have to consult first with Pertamina on this," he said.
In a later hearing on Tuesday, the House also agreed on the government's revised tax ratio of 13.03 percent compared to the 12.08 percent initially proposed.
Director General of Taxation Hadi Poernomo said that the percentage was "the best" that the government could come up without much disruption to the economy.
He said that the 13.03 percent tax ratio would add approximately Rp 185 billion to the 2002 state budget.