Houses approves the 1995-1996 state budget
Houses approves the 1995-1996 state budget
JAKARTA (JP): The House of Representatives approved the 1995-
1996 state budget, which calls for a nominal increase of 11.9
percent in both revenues and spending, yesterday.
The four House factions -- Golongan Karya (Golkar), the
Moslem-dominated United Development Party (PPP), the Indonesian
Democratic Party (PDI) and the Armed Forces representatives --
described the tight budget as realistic, given the condition of
the Indonesian and world economies.
When passing the bill on the budget, the factions asked the
government to pay more attention to the mobilization of private
investment in order to offset the small growth in the state
budget.
President Soeharto unveiled the draft budget, which is
envisaged to balance at Rp 78.02 trillion (US$36.28 million),
for the 1995-1996 fiscal year early last month.
The state revenues from the oil and gas sectors are projected
to increase by 10.9 percent to Rp 66.26 trillion, while those
from non-oil and non-gas taxes are estimated to surge by 13
percent to Rp 52.98 trillion. Receipts from foreign loans are
expected to soar by 17.4 percent to Rp 11.75 trillion.
Even though they approved the budget plan, both the PPP and
PDI factions complained over several points. They have
consistently raised a number of issues at the annual budget
debates over the past four years. Mostly they complain about the
poor quality of the budget deliberations themselves.
The two parties contend that because the budget plan contains
allocations made by sectors and sub-sectors, they are not able to
scrutinize the spending details for the various projects and
programs planned.
"The absence of such detailed spending plans makes it
completely impossible for us to influence any changes in resource
allocations," the PPP spokesman, Sa'di Zen Noor, pointed out.
He argued that due to this aspect of the budget it is
difficult for the House to convince the public that the
legislature is more than just a "rubber stamp" for the state.
Reform
The Golkar faction, on the other hand, said it fully trusts
the government to decide on budget appropriations for projects
and programs without prior consultations with the House.
The bill, which was approved without any changes, stipulates
that budget allocation by project or programs will be based on
Presidential decisions.
In their final statements of their views, the four factions
called on the government to continue to reform the bureaucracy in
order to reduce red tape and malfeasance.
They also urged further deregulation measures to abolish
market distortions such as monopoly, oligopoly and monopsony.
The PPP faction specifically asked the government to see to it
that state banks, which at present provide most of their credits
to large businesses, lend more to small-scale and medium-scale
companies.
"Such a lending policy will reduce the widening gap between
conglomerates and small businesses," Noor added.
Bomer Pasaribu, a Golkar spokesman, said that success in
improving the competitiveness of the business sector in the
international market depends partly on the government's ability
to improve economic efficiency by eliminating monopolies and
protection.
"Too many monopolies and protection are the main enemy of the
market economy," Pasaribu said, adding that the market distortion
resulting from the unfair business practices would benefit only
the big companies.
All the factions called on the government to curb the stronger
inflationary pressures and the sharp increase in the current
account deficit.
The inflation rate reached 9.24 percent last year, slightly
declining from 9.77 percent in 1993. The current account deficit
is estimated to further rise to US$4.09 billion in 1995-1996 from
$3.56 billion this fiscal year and $2.94 billion in 1993-1994.
The PPP and PDI factions also called for special attention to
the country's huge amount of foreign debts.
They said Indonesia, which at present is the third largest
debtor country after Brazil and Mexico, should continue to
improve the mobilization of its domestic savings to reduce its
dependence on foreign loans.
The ABRI faction hailed the 51.1 percent increase envisaged in
non-tax receipts next fiscal year to a total of Rp 6.5
trillion.
"However, we think the Rp 1.69 trillion receipts from dividend
payments from state companies, with combined total assets of Rp
230 trillion, are too small," the ABRI faction's spokesman,
Soewanro, noted. (hen/vin)