Reliable body needed to manage poverty fund

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)