State budget for 1996/1997 approved

State budget for 1996/1997 approved

JAKARTA (JP): The Budgetary Commission of the House of
Representatives (DPR) yesterday approved the government's budget
plan for 1996/1997 without making any changes but with a strong
appeal for the improvement of discipline in its implementation.

The budget plan, to be implemented at the start of the new
fiscal year in April, is scheduled to be formally approved by the
House in a plenary meeting on Feb. 29.

The four factions of the commission -- the Moslem-dominated
United Development Party (PPP), the Golkar ruling party, the
Indonesian Democratic Party (PDI) and the Armed Forces -- asked
the government to improve its budgetary discipline in their final
view of the budget plan.

A PPP spokesman, Muchsin, said that the government should
consistently uphold the balanced budget principle to prevent any
deficit in the future.

"The deficit, which occurred in the last three fiscal years,
should not occur again," the spokesman said yesterday at the
close of the four-day deliberation on the budget plan.

He said that expenditure should not exceed revenues expected
to be received by the government during the next fiscal year even
though the government has set aside budgetary reserves to finance
a possible deficit.

The revenues and expenditures in the 1996/1997 budget plan are
set equally at Rp 90.61 trillion (US$39.5 billion), 16 percent
higher than Rp 78.02 trillion budgeted in the current 1995/1996
fiscal year, which will end next month.

Muchsin said that his party praised the government's measures
in the last two years to speed up the repayment of loans carrying
interest rates of over 10 percent per annum.

Using the proceeds from the sales of the government's shares
in state-owned firms for the prepayment of high-interest loans is
an appropriate step to minimize the country's dependency on
foreign loans, he said.

The government's revenues from foreign aid, under the
1996/1997 budget plan, are expected to be Rp 12.41 trillion
($5.41 billion), which will account for 13.67 percent of its
total revenues of Rp 90.61 trillion.

The PDI faction also called on the government to reduce its
dependence on foreign aid by raising its revenues from domestic
sources.

The domestic revenues, according to the budget plan, are
projected to reach Rp 78.2 trillion, comprising Rp 14.12 trillion
from the oil and gas sector and Rp 64.08 trillion from non-oil
sectors.

PDI spokesman Marwan Adam said that the government's
projection of receipts of Rp 56 trillion from non-oil tax
payments in 1996/1997 is too pessimistic, given the existing tax
revenue potential.

He said that the low target would not only make tax officials
less active but could also encourage them to collude with
taxpayers wanting to avoid tax payments.

The PDI faction also paid serious attention to the alleged use
of the government's funds for activities which are not included
in the state budget plan.

"We are all aware that there have been so many non-budgetary
transactions which are not reported to the House," he said. "How
could the House members carry out their mission of supervision,
if they have no access to such information," he added.

He said that the increase in the financing of non-budgetary
activities would automatically lessen the function of the budget
as a controller of the state's assets.

Marwan said that the government actually has many sources of
income to finance non-budgetary activities, such as from the
controversial reforestation funds and levies imposed by certain
ministries.

He said the PDI faction has consistently urged the government
to include such sources of incomes in the state budget. "But our
demand has always been turned down," he said. (hen)