House wants next budget to rise 13%

House wants next budget to rise 13%

JAKARTA (JP): The House of Representatives' Budgetary
Commission yesterday proposed raising the 1997/1998 budget by 13
percent on this year's budget to Rp 102 trillion (US$43.1
billion).

The commission, at the conclusion of its three-day hearing
with Minister of Finance Mar'ie Muhammad, also approved the
government's budget accounts for the first half of the 1996/1997
fiscal year, which will end next March.

The government's accounts for the April-September period show
a surplus of Rp 700 billion (US$295.9 million).

The commission endorsed the government's projected Rp 100
billion surplus for the second half of the fiscal year.

"We hope that the surplus can be maintained and even
increased," the meeting's chairman, I GDE Artjana, said.

Mar'ie said earlier that although the budget followed
balanced-budget principles the government would do its best to
produce a surplus every year to reduce its dependence on foreign
loans.

"In the current era of globalization, where the roles of
investment banks, mutual funds and fund managers are getting more
dominant than government's, it is very important for us -- the
government -- to produce budget surpluses," Mar'ie said.

Three of the commission's four factions -- the Armed Forces,
the ruling Golkar and the United Development Party -- proposed
that the government's budget for the next fiscal year balance at
about Rp 102 trillion (US$43.1 billion), or 13 percent higher
than the current budget of Rp 90.6 trillion.

The other faction, the Indonesian Democratic Party, suggested
next year's budget should be pushed up even more, by 20 percent,
to Rp 108 trillion.

All four factions based their proposals on similar
assumptions: oil prices remaining at their current levels,
continuing inflow of official foreign loans and steadily
increasing tax revenues.

The Armed Forces' factional spokesman, Herman Hidayat,
projected that Indonesia's crude oil prices would average $16.5 a
barrel next fiscal year, receipts from official foreign loans
would reach Rp 13.4 trillion and tax revenues would rise 12
percent from the current budget target of Rp 55.99 trillion.

The faction proposed the 1997/1998 budget should be 14.5
percent larger, at Rp 103 trillion, than the current budget.

The Golkar factional spokeswoman, Mubha Kahar Muang, predicted
the government's domestic revenue from oil and gas would increase
slightly to Rp 15 trillion for the next financial year from Rp
14.1 trillion for the current budget.

The faction projected domestic revenues from non-oil and gas
sectors, including tax and non-tax income, would reach Rp 75.6
trillion, up from Rp 64.08 trillion for the current budget.

It proposed the 1997/1998 budget should balance at Rp 102.3
trillion.

The factional spokesman for the United Development Party,
Sa'di Zen Noor, forecast that Indonesia's oil prices would
average between $17 and $18 a barrel next fiscal year, revenue
from official foreign loans would remain at its current level of
Rp 12.4 trillion and tax revenue would increase 20 percent from
the current budget.

The faction proposed the 1997/1998 budget should balance at Rp
102.7 trillion.

Marwan Adam of the Indonesian Democratic Party faction said
the government could further increase tax receipts since the
country's tax ratio to gross domestic product was low compared
with those of neighboring countries.

The faction was therefore optimistic the budget for the next
fiscal year could balance at Rp 108 trillion, more than 20
percent higher than the current budget of Rp 90.6 trillion. (rid)

Editorial -- Page 4