Govt to start disbursing funds for poor

Urip Hudiono, The Jakarta Post, Jakarta

The government will soon begin the disbursement of the Rp 7.3 trillion (US$784 million) in funds set aside in this year's state budget for various assistance programs to alleviate the burden on the poor arising from the recent fuel price hikes.

The Ministry of Finance's Director General for State Budget, Achmad Rochjadi, said on Thursday his office had finalized the complete formulae for the low-income assistance programs, and sent them to the relevant ministries.

"The ministries will then carry out the actual financing and implementation of the programs according to these formulae," he said.

The funds are part of a total Rp 17.8 trillion the government plans to allocate this year to finance programs targeted directly at the poor so as to help ease the burden on them arising from the fuel subsidy cuts and the resulting 29 percent average hikes in domestic fuel prices.

The low-income assistance programs will mainly consist of educational assistance provided by the Ministry of Education, the provision of rice by the Central Logistics Company (Bulog), health services for the poor provided by the Ministry of Health, and the rural infrastructure schemes undertaken by the Ministry of Public Works.

State Minister for National Development Planning Sri Mulyani Indrawati previously said the government would also allocate a Rp 132 billion special "safeguard" fund and set up a monitoring team consisting of the Development Finance Comptroller, non- governmental organizations and public auditors, to ensure the proper channeling of the funds.

Achmad further said that the disbursement of the Rp 7.3 trillion would not need the approval of the House as it was already allocated in the 2005 state budget that the House passed into law last year.

"We are merely carrying out what the budget says," he said.

Concerning the Rp 10.5 trillion in additional money for the programs, however, Achmad admitted that the government would still have to discuss these with the House and seek its approval.

"We are still drafting the budget revision bill, and hope to be able to submit it to the House soon," he said, adding that the government was likely to propose higher revenue targets from taxes, customs and the oil and gas sector.

Minister of Finance Yusuf Anwar previously said that the government would submit revisions to the budget to the House next month.

Elsewhere, Vice President Jusuf Kalla told a press briefing on Thursday that there was a possibility that the funds for the low- income assistance programs and their allocation might be varied during the government's discussion of the revised budget with the House.

The House itself is currently involved in a heated debate on whether to approve or reject the government's decision to cut fuel subsidies and increase fuel prices, or whether to hold further meetings to discuss the subject.

Low-income assistance funds provided in the 2005 budget

Rural infrastructure development Rp 4.67 trillion

Education assistance programs Rp 1.47 trillion

Health services Rp 1 trillion

Provision of low-cost housing Rp 0.2 trillion

Total Rp 7.34 trillion

Source: Ministry of Finance, Bappenas