Sutiyoso proposes 56% increase in new budget

Sutiyoso proposes 56% increase in new budget

JAKARTA (JP): Governor Sutiyoso submitted to the City Council
on Wednesday a draft city budget for the upcoming 1999/2000
fiscal year worth Rp 2.74 trillion, a 56 percent increase from
the current budget of Rp 1.75 trillion.

The governor told the council's plenary session that the draft
was designed with the assumption of 5.41 percent negative
economic growth and inflation between 15 percent and 20 percent
throughout the budget period.

According to Sutiyoso, the significant increase in the draft
budget was mainly supported by the estimated Rp 1.26 trillion in
local revenue, with income from regional taxation as its prime
component.

The figure is 54.72 percent higher than the estimated tax
revenue for the current fiscal year, he said.

The other income for the budget would include the central
government's grant of Rp 1.23 trillion and a possible surplus of
Rp 246 billion from the 1998/1999 budget, Sutiyoso said.

"The assumption (of the significant increase in the draft
budget) is mainly based on the city's intensifying efforts in
collecting various regional taxes, such as those on vehicles,
transfers of vehicle ownership, fuel, hotels and restaurants," he
told the council.

"We should also be thankful that the central government is
about to raise its fund allocation (to the Jakarta
administration) by 34.37 percent to Rp 1.23 trillion, which is
mainly due to the planned increase of civil servants' salaries,"
the governor said.

Unlike in previous years, the media were not given copies of
the draft budget.

According to Sutiyoso, revenue from taxes collected on vehicle
sales is estimated to increase by 55.73 percent to Rp 350 billion
for the fiscal year, vehicle ownership tax revenue will rise by
45.18 percent to Rp 200 billion, and tax on hotels and
restaurants will bring Rp 168 billion, a 58.38 percent increase.

The biggest increase has been predicted by Sutiyoso to come
from tax on entertainment, such as movie theaters, bars,
discotheques and massage parlors.

His administration estimated that the entertainment tax
revenue would jump to Rp 36 billion in the next fiscal year, an
80 percent increase from the current budget.

The governor said that some city-owned companies, including
the PDAM Jaya water company, the PT Pembangunan Jaya construction
company and the PT Delta Jakarta brewing company, might not be
able to give financial contributions to the city because of the
economic crisis, which has shrunk the value of the assets of most
of the companies.

According to Sutiyoso, Rp 2.06 trillion of the proposed budget
will be allocated for the city's routine expenditure, while the
remaining Rp 683 billion would be spent on development.

The greatest portion of the routine expenditure, Rp 905
billion, would go to paying the wages of city employees.

This is followed by expenses of operational equipment (Rp 421
billion) and maintenance (Rp 310 billion), Sutiyoso said.

The development expenditure was allocated to 20 sectors in the
draft budget, mainly focusing on the ongoing social safety net
program, which included the supply and distribution of food, job
opportunities and the development of small and medium businesses
in the capital.

The money would be allotted to housing and resettlement
programs (Rp 84 billion), transportation (Rp 72.65 billion),
water and irrigation (Rp 72.87 billion), social and cultural
programs (Rp 78.24 billion) and state apparatuses and control (Rp
78.10 billion).

Many of the city councilors warmly welcomed the draft budget.
Some of them were even optimistic that the administration could
achieve its targets.

Even the current austerity budget also resulted in a surplus,
supporters said.

But some councilors questioned the reasons behind the city-
owned companies being exempted from contributing to the city's
revenue.

Head of the Indonesian Democratic Party faction in the council
Lukman Mokoginta said it was impossible that big companies such
as PT Pembangunan Jaya were unable to make a contribution.

"It is a big diversified company," he said.

Deputy head of the United Development Party faction Ali Imran
Husein said the companies should have first been audited to prove
their inability.

"I promise that our faction will question the matter further,"
he said. (ind)