Reliable body needed to manage poverty fund
JAKARTA (JP): Businesspeople asked the government over the weekend to form a reliable institution to manage the poverty funds raised from the government's 2 percent surcharge on wealthy individuals and companies.
They also asked that the government appoint reliable people to channel the money to those qualified under the program.
B.R.A. Moeryati Soedibyo, an executive at a major cosmetics manufacturer, said that she didn't mind setting aside 2 percent of her company's profits for the needy as long as a professional institution managed and distributed the funds.
"I support the decree, but I'm a little afraid that it will not be useful if the receivers do not have specific plans in mind and throw the money around for nothing," she said.
Economic analyst Ekky Syachrudin welcomed the decree, but warned that the funds must be used properly. He suggested that a body with responsible persons be formed to manage the funds.
"Do not look at it (the money) as just a fund that is given away easily. There should be a definite and transparent plan to determine the allocation and spending of the money, and to select to whom the money will be given," he told The Jakarta Post.
President Soeharto, in a decree issued on Thursday, ordered individuals and companies with annual after-tax incomes of over 100 million rupiah ($42,000) to give 2 percent of their earnings to the poor.
The President issued a similar decree in December last year, which only made an "appeal" to the wealthy. The new decree makes it obligatory for the wealthy to donate 2 percent of their earnings, which will go to families that cannot meet their basic clothing, housing, food and health services needs.
The government plans to curb poverty, in which 26.3 million people currently live, by slashing the figure to a total of 2.5 million people by the end of 2019, officials have said.
Fadel Mohammad, the chairman of publicly listed Bukaka Group, said over the weekend that he welcomed the decree. He said that the 2 percent should not be a burden as long as the money is used properly.
"Please remember that the 2 percent is part of the gains from our employees' hard work. But it is no problem if we return them back to the needy," he told The Post Saturday.
Investment effect
Legislator A.A. Baramuli warned that the 2 percent surcharge could scare away foreign investors.
"Foreign companies come here because the government reduced the tax from 35 percent to 30 percent. With the extra 2 percent surcharge, what do you think they will do?" he asked.
Another analyst, Hartojo Wignjowiyoto, also questioned the credibility of the people and the institution to be put in charge.
"Usually, money is not received or allocated properly. The people who enjoy the money are actually not the target groups (the needy) but the people or institutions that run the allocation mechanism," he said.
Opinions differed as to whom should handle the funds.
According to Baramuli, "The best institution to control the funds collected from the surcharge would be the tax directorate general."
Ekky said: "The fund should be managed by a special financial institution or bank which could select the proper small or medium-scale businesspeople based on a simple yet thorough assessment."
According to the tax directorate general, the funds would be managed by the Yayasan Dana Sejahtera Mandiri, a foundation controlled by the state minister of population affairs.
He did not agree with Baramuli's preference, saying that the tax agency was geared toward collecting money, not investing or lending.
Meanwhile, Indonesian Cooperative Council chairman Sri Edi Swasono said, "The institution should not be run by the government, but organized by the people."
He welcomed the cooperation of the ministries of finance and cooperatives as well as banks, but rejected the involvement of business organizations such as the Jimbaran Group. (04)