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)