House urges tight budget for 1999/2000
House urges tight budget for 1999/2000
JAKARTA (JP): The House of Representatives (DPR) urged the
government on Wednesday to draft a tight, realistic state budget
for the 1999/2000 fiscal year, saying that Indonesia's economy
would still be vulnerable next year.
The four factions in House Commission VIII for finance and the
state budget also called on the government to prioritize
expenditure on social safety net programs providing food and jobs
to millions of Indonesians affected by the economic crisis.
"A deficit of routine and development expenditure against
domestic revenue is only acceptable if the funds are used to
finance urgent projects to help the poor," United Development
Party (PPP) faction spokesman Irgan Chairul Mahfiz said during
the hearing with Minister of Finance Bambang Subianto.
Yesterday's hearing was the last in a four-day series of
hearings with the minister.
All four factions -- the PPP, Golkar, the Armed Forces and the
Indonesian Democratic Party (PDI) -- called for a realistic
budget to avoid the need to undertake revisions in the event of
changes in the country's condition.
The government has revised the current state budget three
times.
"We hope that in the future there won't be too many revisions
so that we don't confuse the public and so that the budget
remains credible," Irgan said.
The majority Golkar faction said it expected a deficit budget
in the next fiscal year rather than a "balanced and dynamic
budget", as the government likes to call it.
Golkar estimated that tax revenues would reach Rp 110 trillion
(US$14.66 billion), while routine expenditure would be Rp 135
trillion.
Development expenditure would be Rp 72 trillion, most of which
would come from foreign loans, it said.
The forecasts assumed an exchange rate between Rp 7,000 and Rp
8,000 against the U.S. dollar, inflation between 20 percent and
30 percent, and oil prices of between US$11 and $12 per barrel.
The faction also forecast that economic growth would improve
to between minus 5 percent and minus 1 percent, up from this
year's figure of minus 13 percent.
Earlier this month, the government announced that it would
draft next year's state budget assuming economic growth of
between minus 1 percent and 1 percent and inflation of between 15
percent and 20 percent.
The government also said that it anticipated oil prices of
between $11.5 and $12.5 per barrel, with production running at
1.52 million barrels per day.
The PPP said that these assumptions were too optimistic
considering the country's current difficulties and the risk of
further trouble around the time of next year's general and
presidential elections.
On Wednesday, the Armed Forces faction tabled a proposal for
extra government funding for security during the elections.
However, the proposal was rejected by the minority PDI
faction, which urged the government to accommodate the
aspirations of the general public and the students who have been
staging almost daily protests instead of spending more money on
security.
"That would be much healthier way forward than deploying a
massive security force on the streets," the faction's spokesman
Nico Daryanto said.
Late last week, the government announced plans to recruit and
train 40,000 civilians to bolster security in the run up to the
general election. It said the civilian militia would be funded
out of the state budget. (das)