House members criticize govt over draft budget

House members criticize govt over draft budget

JAKARTA (JP): Members of the House of Representatives yesterday criticized the government for not giving them an appropriate share of involvement in formulating the draft of the state budget.

Legislators from the United Development Party (PPP) faction in a statement yesterday said that equal partnership between the executive and the legislative bodies in formulating, discussing and controlling the implementation of the state budget was still inadequate.

The statement was part of the faction's overview during a plenary session on the draft of state budget for next fiscal year, which was also attended by Minister of Finance Mar'ie Muhammad.

"As long as the format, structure and substance of the draft of state budget... continue to allow presidential decrees to directly stipulate the detailed sectors and subsectors of projects, the House's budgetary function will be difficult, and even impossible, to be applied," the statement said.

Each of the four factions of the House yesterday gave an overview of the draft of the state budget, which was proposed earlier this month by President Soeharto.

The 1996/1997 budget plan, to be implemented on April 1, shows a 16 percent increase to a balance of Rp 90.61 trillion (US$39.4 billion), most of which will be financed by taxes.

Consumers, individual and corporate tax payers, property owners and exporters will contribute to most of the increase in state spending. The government envisages an increase of 23 percent in revenues from income tax, 31 percent from value added tax, 260 percent from export tax and 18 percent from property tax.

The Indonesian Democratic Party's (PDI) faction at the House, in its overview read by legislator Marwan Adam, repeated the public's call to cut back high costs which lead to high inflation rates, low competitiveness of Indonesian-made commodities and an overheating of the economy.

"Legal and illegal fees, red tape, collusion between government officials and businesspeople and corruption are the main reasons for the high-cost economy," Marwan said.

PDI also lashed out at government institutions which marked up their budgets, saying that such practices further contributed to the country's high inflation rate.

The faction also emphasized the fact that the government has only been able to collect a small amount of tax in the past.

"The government intends to collect Rp 56 trillion in revenues from taxes. This is only a Rp 8 trillion increase over the previous budget... This Rp 56 trillion makes up 62 percent of the total revenues expected to be derived in the 1996/1997 fiscal year," Marwan said.

He also pointed out that the government should put less emphasis on indirect taxes and more on direct taxes.

"The government's intention to rely more on taxes from the lower and middle-income classes can be seen from the fact that most of the tax revenues are expected to come from indirect taxes, which will rise to Rp 32.3 trillion," Marwan said.

Meanwhile, revenues from direct taxes, which are determined by, among others, the incomes of individuals and corporations, will account for only Rp 23.7 trillion.

"Indirect taxes have a lower degree of fairness," Marwan said.

The Golkar faction yesterday welcomed the government's decision to earmark Rp 54 billion for the subsector of systems management and controlling.

The faction, whose overview was read by legislator M. Suparni, acknowledged that the funds were needed to improve the quality of government control.

Golkar considered the control system within the bureaucracy as still poor. Meanwhile, the State Audit Agency announces each year that problems continue to increase, both in quality and quantity. (pwn)