House passes state treasury bill on management of state funds
House passes state treasury bill on management of state funds
The Jakarta Post, Jakarta
The House of Representatives passed on Thursday the long-awaited
state treasury bill into law, which Minister of Finance Boediono
claimed will greatly improve the management of state funds and
assets and thus help prevent corruption.
"This is a very fundamental and important law, which will have
a long-term impact on the management of our state finances,
which, God willing, can reduce malfeasance, including leakage of
state funds," Boediono told lawmakers in a speech at the House
plenary session.
But he acknowledged that in the end, efforts to create a
strong and clean treasury management system will all depend on
the goodwill of government officials in charge.
"The government officials must truly implement their duties in
accordance with the spirit of this law. If the system is already
good, in the end it will depend on the people (officials)," he
said.
Indonesia has been regarded as one of the most corrupt
countries in the world particularly due to rampant corruption in
almost all levels of government and state institutions. But since
the late 1990s financial crisis and the downfall of former
authoritarian leader Soeharto, there has been strong pressure for
the government to curb corruption and create good governance.
The State Treasury Law provides rulings on how state funds,
assets and debts should be managed by government officials both
at the central government and local administrations. This law is
crucial to allow the enforcement of the State Finance Law, which
provides basic principles in public financial management,
approved by the House in March this year.
The House is expected to pass into law another bill on the
auditing of state financial accountability to also support the
implementation of the State Finance Law.
All these three laws, the draft of which had been submitted to
the House in September 2000, are designed to replace Dutch laws
on treasury management, which can no longer accommodate modern
financial transactions, greater democracy and transparency.
In the area of state asset management, for instance, the State
Treasury Law stipulates that the sale of assets (including land)
owned by the state or local administrations must be conducted
after obtaining approval from the House or local legislative
council, except under certain conditions.
For state assets excluding land worth between Rp 10 billion
and Rp 100 billion, the sale must be approved by the President,
while for assets worth less than Rp 10 billion must first obtain
the approval of the Minister of Finance.
The law also rules that the sale of the assets must be
conducted via tender.
In the past, the sale of state assets had been a major source
of corruption by government officials and well-connected people.
Last month, President Megawati Soekarnoputri was strongly
criticized after her government awarded a Rp 1.3 trillion real
estate project in Central Jakarta's Kemayoran area to her eldest
son. The project, which is located in a 14-hectare plot of state
land, was given without tender. Although Megawati's government
did not violate any law (the 1925 Dutch law on treasury
management does not stipulates a tender mechanism), many said the
move was unethical. Her son has since withdrawn from the company
that was awarded the contract.