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)