House sees fiscal decentralization bill as too vague

JAKARTA (JP): The House of Representatives asked for a clear- cut revenue-sharing formula to be included in the bill on fiscal balances between the central government and local administrations to ensure a fair distribution of income.

In a meeting with Finance Minister Bambang Subianto on Monday, the House's four factions were united in arguing that the draft legislation, in its present format, is so unclear about revenue sharing that the bill resembles a "blank form" for the central government to fill out according to its wishes.

They said the bill, submitted by the government on Feb. 12, was so lacking in clarity that it remained entirely unclear as to how the legislation would affect the incomes of local administrations.

"Their provisions are so general and vague that the real virtue of the legislation will finally depend on the central government," said Robbani Thoha, spokesman for the United Development Party (PPP) faction, in the general debate on the bill.

Robbani said that in its present format the legislation would require another law, at least 11 government regulations, and one decree of the finance minister for its full implementation.

"This means most of the essential elements of the fiscal balance will still be decided by the central government," Robbani said.

Arsen Rickson of the Golkar faction also criticized the bill for not clearly stipulating how local administrations will benefit from natural wealth in their areas and how expenditure assignments will be arranged.

Rickson said the bill still allowed for domination by the central government of local administrations, thereby keeping them heavily dependent on funding from Jakarta.

"This shows the arrogance of those in power, who tend to dismiss people's aspirations," Rickson added.

Unfair sharing of revenue has sparked separatist pressure in some provinces, increasing dramatically since the ousting of authoritarian president Soeharto last May.

Local people have become increasingly disillusioned by what they perceive as Jakarta's greed for the provinces' resources and disregard for their welfare.

The submission of this bill, together with an earlier legislation draft on greater local autonomy, was designed to create a more equitable distribution of income between the national government and provincial administrations. Moves that are hoped will dissipate separatist pressures.

According to the bill, local administrations would generate income from several kinds of local taxes and user charges, local administration-owned enterprises and transfers from the central government.

"But we find it entirely insensible as to why the bill does not outrightly stipulate the revenue-sharing formula but instead refers it to a regulation which will be issued by the central government," said Nico Daryanto of the Indonesian Democratic Party (PDI) faction.

Daryanto insisted that the people demand an unambiguous formula for the sharing of revenues. "They want a bigger share of the wealth in their areas," he added.

The bill states that the local administration's share of income from natural wealth in the area will be determined by the government through a separate regulation.

"This bill indicates that the central government is still half-hearted in awarding more financial autonomy to the local administrations," Daryanto said.

Namuri Anoem of the Armed Forces faction concurred that there are too many vague stipulations in the bill that will make it largely dependent on further regulations to be issued by the central government.

The four factions also criticized the stipulation of the bill that allows local administrations to borrow from domestic sources as an encouragement for them to run a budget deficit.

"This autonomy, we think, is excessive and may discourage local administrations from optimizing local resources," Daryanto argued. (das)