House members criticize govt for 'over-spending'

House members criticize govt for 'over-spending'

JAKARTA (JP): The Indonesian Democratic Party (PDI) and the Moslem-dominated United Development Party (PPP) have criticized the government for its over-spending during the 1994-1995 financial year.

Both the PDI and the PPP factions of the Budgetary Commission of the House of Representatives (DPR) said in a hearing with Minister of Finance Mar'ie Muhammad that the government had spent too much because it had lacked consistency in implementing the national budget.

Revenues and spending for the 1994-1995 budget had been expected to balance at Rp 69.74 trillion (US$31.4 billion) but, as it turned out, there were several changes in both revenues and spending.

Total expenditure is estimated to have exceeded the original plan by 3.72 percent, reaching Rp 72.34 trillion, while revenues are believed to have surpassed the initial target by about 3.74 percent, to reach Rp 72.35 trillion.

Budgetary revisions are, under Indonesian law, subject to the House's approval.

Marwan Adam, a PDI spokesman, said that his party had to approve the revised budget despite its objections because, under the existing budgetary procedures, details of revenues and spending were not presented during deliberation on budgetary revision.

"How can we audit the state budget if no details are available about the revenue and expenditure sides of the budget," he said.

The PDI, which is Indonesia's smallest but most vocal political party, has campaigned for several years for a change in budgetary procedures under which the legislature would be provided with details of government spending.

Under the current budgetary system, the government is obliged to disclose only a general outline of expected annual revenues and spending.

Fraud

The PDI faction said the present budgetary procedures were vulnerable to fraud because House members had no access to information which would allow them to check whether or not the budget had been correctly implemented.

Sa'di Zen, a PPP spokesman, said that over-spending could be engineered if the government wished to benefit from a surplus on the revenue side.

"If the projection was correct, then spending has not been in accordance with the plan," he said.

Minister Mar'ie said that the higher-than-expected state revenues were possible because receipts from both domestic sources and foreign loans had exceeded the budgetary target.

According to the 1994-1995 budget, the government expected to obtain Rp 66.2 trillion from domestic sources and Rp 11.76 trillion from foreign aid.

The minister said that routine spending is now estimated to have exceeded the original plan by two percent, to reach Rp 43.17 trillion, partly as a result of higher-than-expected spending on personnel.

Government spending on debt servicing also exceeded the target by 2.5 percent, to Rp 18.42 trillion, Mar'ie said.

The minister said that the higher-than-expected debt-servicing spending had been caused by the early repayment of some high- interest foreign loans.

He said that other spending was estimated to reach Rp 204 billion, around 61.2 percent less than the budget target.

The 1993-1994 budget was marred by a deficit of nearly Rp 1.8 trillion, the result of an unexpectedly large increase in the government's routine spending, combined with an 0.5 percent drop of oil and gas revenues due, in turn, to a drop in oil prices. (hen)