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)