Mar'ie vows to control state budget

Mar'ie vows to control state budget

JAKARTA (JP): Minister of Finance Mar'ie Muhammad pledged before the House of Representatives here yesterday that the government will work harder to avoid any deficit from the implementation of its budget plans in the coming fiscal years.

The minister said that besides improving coordination, his office has also imposed tighter control on the implementation of the state budget to prevent any deficit.

"With such measures, we hope there will be a surplus, rather than a deficit in the next fiscal years," the minister told a parliamentary session.

The minister and the House's Budgetary Commission began their four-day session yesterday to discuss the realization of the 1993-1994 state budget.

The government's revenues in the 1993-1994 state budget, which was initially set at Rp 62.32 trillion (US$27.1 billion at the current rate), exceeded the target by around seven percent despite lower-than-expected revenues from the oil and gas sector, one of the country's major sources of revenues.

The over-spending for both routine activities and development projects, however, resulted in a deficit of Rp 1.85 trillion.

According to the existing regulation, the government's balanced budget must pass before the House at least three times. The first approval is needed for the budget plan, which is usually made before the start of the fiscal year. The second one is for the unaudited realization, which is generally discussed before the end of the budgetary year.

The last one is needed for the audited realization of the budget, which must be proposed within two years after the budget year is over.

The minister said that actual spending exceeded the initial target by around 10 percent due to the higher-than-expected increase in the spending for development projects, which were mostly financed by foreign loans.

Aid disbursement

"Delays in the disbursement of foreign funds forced the government to increase rupiah financing of the projects," he said about the reason why the overspending occurred in the government's development projects.

The deficit in 1993-1994 was the second after that in 1992- 1993 when the state budget fell short by around Rp 551.2 billion, also due to over-spending.

The deficits, both in the 1992-1993 and 1993-1994 fiscal years, were financed by the government's standby funds, which were specially set up from the accumulation of budget surpluses in the previous fiscal years.

The compensation for the 1993-1994 deficit reduced the amount of the standby funds to Rp 2.3 trillion from Rp 4.15 billion in 1992-1993, the minister said.

During yesterday's session, most of the commission's members questioned the government's commitment to fully adopting the balanced budget system, given the deviation in both the 1992-93 and 1993-1994 fiscal years.

They also urged the government to improve its discipline in abiding by budget plans to prevent further deficits in the coming fiscal years.

Aberson Marle Sihaloho of the Indonesian Democratic Party (PPP) said that the deviation from the budget plan reflected the government's refusal to abide by the House's decision.

"It was, therefore, pointless for us to spend all that time setting up the budget plan, if the government had no commitment to follow it," said Aberson, who is also the commission's vice chairman.

He also charged the government with ignoring the balanced- budget principles, according to which the amount of the spending should be in balance with the actual revenues. (hen)