State budget passed unchanged
State budget passed unchanged
JAKARTA (JP): The House of Representatives (DPR) predictably approved the 1996/1997 state budget plan without a single change at a plenary meeting yesterday.
However members would not comment on whether they also approved a proposal to increase civil servants' salaries.
Sources said House members and Minister of Finance Mar'ie Muhammad had amicably agreed to raise civil servants' pay by around 10 percent during the four-day deliberation of the budget plan early this month.
But they agreed not to disclose any figure, which would be effective from the beginning of April-- the start of the fiscal year-- because the announcement would immediately incite price in of important commodities.
"The House members even asked the government to introduce an automatic salary increase in coming years," a House member said. The suggestion was turned down.
President Soeharto said during the unveiling of the state budget in January that the government intended to raise civil servants' pay. But he left the final decision to the House members.
The revenues and expenditures in the 1996/97 budget plan are set to balance at Rp 90.61 trillion (US$39.5 billion), 16 percent higher than the Rp 78.02 trillion in the current 1995/96 budget.
Domestic revenues are expected to increase by around 18 percent to Rp 78.20 trillion while those from foreign loans are projected to reach Rp 12.41 trillion, an increase of 5.6 percent from the previous year's.
The government's routine expenditures will increase by 18.8 percent to Rp 56.11 trillion. The personnel expenses, part of the routine spending, will rise by 19 percent to Rp 18.28 trillion.
The government's spending for development projects will rise by 12.1 percent to Rp 34.50 trillion.
In his address at the House plenary session yesterday, Mar'ie Muhammad said that the portion of the government's savings that will be used to finance development projects is expected to increase to 64 percent in the 1996/97 fiscal year from 62 percent in 1995/96.
"The portion of the foreign loans would therefore be reduced to 36 percent from 38 percent previously," he said.
He added that the country's dependence on foreign loans in financing the development projects would be further reduced in the future by raising domestic revenues both from taxes and non- taxes.
He said that the tax system would be further expanded both through the intensification of collection and the improvement of tax regulations.
Mar'ie said that the government would also further strengthen efforts to raise state receipts from the non-tax sector such as service fees and the proceeds from the divestment of the government's shares in state-owned companies.
He said that the government raised a significant amount of money from the divestment of its shares in PT Indosat, PT Timah and PT Telkom, which are now all listed on both domestic and overseas exchanges.
He said that the government would also make similar divestments through the floating of three other state-owned companies -- Bank Negara Indonesia, PT Krakatau Steel and the toll operator Jasa Marga, which are currently preparing to go public.
Funds to be raised from the sale of the government's shares in the state-owned companies would also be used to speed up the repayment of external loans with interest rates exceeding 10 percent.
The four factions -- the Moslem-denominated United Development Party (PPP), the Golongan Karya (Golkar) Party, the Indonesian Democratic Party (PDI) and the Armed Forces -- asked the government to improve its budgetary discipline in their final submissions on the budget plan.
They also asked the government to make concerted efforts to curb the country's growing imports and to bolster exports so that the widening current account deficit could be reduced. (hen)