New state budget draft welcomed by legislators

New state budget draft welcomed by legislators

JAKARTA (JP): Members of the House of Representatives welcomed
on Friday the 2002 state budget draft unveiled by President
Megawati Soekarnoputri, saying it was realistic and business-
oriented.

"We think the budget is quite realistic and shows the
government's seriousness in helping small and medium-sized
businesses," House Speaker Akbar Tandjung said.

"We also appreciate the government's decision to increase the
budget allocation for certain sectors, such as education, health,
infrastructure and agriculture," he added.

It was the first time Megawati unveiled the budget draft since
assuming power in July.

The budget will be first debated by legislators before the
House approves the proposal.

Megawati's predecessor, Abdurrahman Wahid, was forced to
revise his state budget by the legislators, who in July decided
to unseat him due to incompetence.

Meanwhile, analysts have said Megawati might not face a tough
time with the legislators, particularly since her Indonesian
Democratic Party of Struggle (PDI Perjuangan) dominates the
House.

However, the analysts said she would have to work hard to
convince legislators from other factions of her plans to raise
fuel prices, a politically sensitive issue in the country, and
electricity rates as well as accelerate the privatization
program.

PDI Perjuangan legislator Benny Pasaribu, who heads House
Commission IX for financial and development planning affairs,
said that the draft budget was prudent and realistic.

"In general, the budget is the best the government has ever
produced," he said, pointing out its effort to curb the deficit,
reduce subsidies and increase the budget for education, health,
social welfare and public utilities.

He urged, however, the government and Bank Indonesia to reduce
the real interest rate to between 3 percent and 4 percent to
allow the real sector to recover.

Benny said issues, such as the tax ratio, real interest and
privatization as well as the sale of Indonesian Bank
Restructuring Agency (IBRA) assets, could stay back for the House
to endorse the budget immediately.

"We have long asked the government to sell assets held by IBRA
to ease pressure on the 2001 state budget, and not to cover the
deficit as it is now," he said.

Benny said the House would also stand by its previous
suggestion to set the tax ratio at 13.6 percent, compared to the
government's 12.8 percent, and real interest rate of between 3
percent and 4 percent.

He also said that Commission IX was expected to convene
immediately to debate the proposed state budget.

"We hope to approve the budget by the end of October at the
latest," he said.

Meanwhile, Golkar Party legislator Paskah Suzetta doubted the
government could meet the economic growth target of 5 percent in
2002 and average exchange rate assumption of Rp 8,500 to the U.S.
dollar, particularly due to a host of obstacles including the
remaining security problems at home and the global economic
slowdown.

However, he hailed the government privatization program.

"I fully support the move because in the medium and long-term,
it will benefit the country," he said.(03)