State revenues estimated to exceed target

State revenues estimated to exceed target

JAKARTA (JP): State revenues during the current fiscal year
(1995-1996) are estimated to exceed the set target by 3.6 percent
or Rp 2.8 trillion (US$1.2 billion), it was concluded yesterday
in a hearing between the Ministry of Finance and the House
Budgetary Commission.

The figure is based on actual receipts from taxes and other
levies and foreign loans during the first semester (April through
September) of the current fiscal year and an expected rise in
revenues during the next semester, said the commission's
chairman, I Gde Artjana, of the Armed Forces faction on the last
day of the four-day hearing.

According to the budget plan, government revenues are
estimated at Rp 78.02 trillion.

During the first semester of the current fiscal year, revenues
from oil and gas reached Rp 7.4 trillion, or 55 percent of the
whole year's target. This was due to the average oil price of
US$17.27, higher than the targeted $16.50 per barrel.

Tax receipts from the non-oil sectors amounted to Rp 20.06
trillion, or 44.6 percent of the target, and other revenues
reached Rp 1.09 trillion or 16.9 percent of the target.

Foreign loan disbursements during the first semester amounted
to Rp 5.62 trillion, or 47.8 percent of the target. In the second
semester, foreign loans are expected to be Rp 6.1 trillion.

Despite the encouraging development, the House members warned
the government of various possibilities that could destabilize
the budget plan in the second semester.

The Indonesian Democratic Party (PDI) faction, for example,
noted that oil supplies from non-OPEC producing countries, such
as countries of the former Soviet Union, had started to enter the
international markets.

"This could lead to a drop in oil prices," the PDI faction
cautioned.

The faction also noted that the large current account deficit
in the first semester showed that the export promotion had failed
to increase exports to the desired level.

"In fact, during the last few years, the growth rate of
exports of non-oil products has been declining," said Gusti Ayu
Eka Sukmadewi, a spokeswoman for PDI.

The government said that the larger deficit was partly caused
by the increase in imports of capital goods for foreign and local
investment projects.

But the PDI faction argued that there is no indication that
such imports will increase exports.

The Golkar faction stressed the need for better coordination
and supervision among government agencies in pursuing development
programs.

"Besides, the government should eliminate all economic
distortions, such as protection, monopoly and oligopoly that have
caused the high costs of economy," said Boy Musbar Nurmawan of
the Golkar faction.

Next year

At the last day of the hearing, all four factions of the
commission came up with different figures on the next budget plan
(1996-1997).

The Golkar faction estimated that the 1996-1997 budget plan
will balance at Rp 91 trillion, an increase of Rp 13 trillion or
16.6 percent from the current budget plan that was set at Rp
78.02 trillion.

The faction of the United Development Party (PPP) 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.

The Armed Forces faction estimated the next budget to balance
at Rp 91 trillion, an increase of Rp 12.8 trillion or 16.6
percent.

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

The next budget plan is based on the target growth of 7.1
percent and the average oil price of $16.50 per barrel.

The commission also noted that the 1996-1997 budget plan
should be devised in such a way that it will maintain economic
stability and will further enhance a more equitable distribution
of income.

The commission also asked the government to continue economic
reform measures in the next fiscal year.(13)