Soeharto to propose state budget

Soeharto to propose state budget

JAKARTA (JP): President Soeharto is to propose the 1996-1997
state budget to the House of Representatives today, a budget most
analysts expect to be as austere as the current one.

Most economists do not expect the draft state budget to
increase substantially from the current one which is projected to
balance at Rp 78.02 trillion (US$34 billion) due to great concern
over economic overheating.

They have warned that last year's economic overheating may
worsen this year if the government does not take serious measures
to curb inflation and reduce the current account deficit.

The 1996-1997 budget proposal, to be unveiled in a nationally-
televised address at the House plenary session, will cover the
third year of the current sixth Five-Year Development Plan period
ending in March 1999.

Central Bank Governor J. Soedradjad Djiwandono was quoted
recently by Reuters as projecting that the 1996-1997 budget plan
will expand by not more than 11 percent over the current (1995-
1996) budget.

The current budget, ending in March, is set to balance at Rp
78 trillion (US$34 billion), up 11.9 percent from the previous
one.

But 12 percent will represent an expansion of less than four
percent in real terms, adjusted for last year's inflation of
around 8.64 percent.

At a hearing with the House Budgetary Commission in November,
Minister of Finance Mar'ie Muhammad said that the next budget
plan would assume an average oil price of $16.50 per barrel.

Oil and natural gas still contribute about 25 percent of the
government's internal revenues.

At the same hearing the Golkar and the Armed Forces factions
estimated the 1996-1997 budget to balance at Rp 91 trillion, an
increase of Rp 13 trillion or 16.6 percent from the current one.

The United Development faction projected the next state budget
to balance at about Rp 89.5 trillion. The figure was based on the
assumption that internal revenues will increase by 20 percent to
Rp 77.8 trillion but foreign loans will remain at the same level
as in the current budget, at Rp 11.76 trillion.

Of all the factions, the Indonesian Democratic Party faction
made the highest budget projection, expecting the next budget to
balance at Rp 94 trillion, an increase of 20 percent.

Fifteen members of the cabinet last night briefed news media
editors on the budget, which will be proposed by President
Soeharto today.

The members included (from left to right) Minister of
Transportation Haryanto Dhanutirto, Minister of Tourism, Post and
Telecommunications Joop Ave, Minister/Cabinet Secretary Saadilah
Mursid, State Minister for Development Planning Ginandjar
Kartasasmita, Minister of Finance Mar'ie Muhammad, Minister of
Information Harmoko and Coordinating Minister for Production and
Distribution Hartarto.

Also present at last night's briefing were Minister/State
Secretary Moerdiono, Bank Indonesia Governor J. Soedradjad
Djiwandono, Minister of Mines and Energy I.B. Sudjana, Minister
of Industry Tunky Ariwibowo, Minister of Agriculture Sjarifudin
Baharsjah, Minister of Cooperatives and Small Enterprises
Subiakto Tjakrawerdaya, State Minister of Agrarian Affairs Soni
Harsono and Minister of Manpower Abdul Latief.(rid)