Transparency in fuel subsidy scheme sought

JAKARTA (JP): The Indonesian Consumers Foundation (YLKI) said it would accept the increase in electricity, phone, and fuel rates only if there was transparency on the part of the government about where the money would go.

YLKI vice chairman Agus Pambagio said on Monday that the planned price hike, which had been announced a few months ago, had raised people's anxiety as no explanation on the money management had been given.

He acknowledged that such an increase, a result of the elimination of the government's subsidies of the three strategic commodities, may diminish the wide social gap between the haves and have nots.

"We agree to the increase in rates on certain conditions. It's time to shift the burden for the subsidies to the rich and use it to help the poor to get low-cost facilities.

"But the question is, has the government prepared such schemes? If not, don't expect the consumers will give the nod to the plan whatever the reason is," Agus firmly told a media conference.

The government plans to raise fuel prices by an average of 30 percent, starting June 15, and electricity by 17.47 percent starting next month.

The plan to raise telephone rates, scheduled for Sunday, was postponed due to strong opposition from the public.

YLKI viewed that such a price hike would not cost the rich a thing, arguing that 80 percent of the commodities were consumed by the industries and industry owners.

Agus said that the foundation would support the plan if the money generated from the increase was used to build more infrastructure to ensure easier access for the poor to the electricity, telephone and fuel facilities.

He deplored that the House of Representatives state budget task force merely focused on calculating the price hike as the consequence of the diminishing subsidies from the government, but had not touched on how the funds from the reduced subsidy would be used for urgent social welfare programs.

The foundation urged the government to provide details of the plan and to make it known to the consumers.

"If there will be subsidies for the poor, the House, as the last 'gate' before the imposition of the plan, should determine which categories are to receive the subsidy and the subsidy management.

"For such strategic commodities, the state cannot rush the plan. It may take one to two years to fully prepare for these schemes which have a broad impact on society," he added.

The foundation also firmly objected to the plan to raise value added tax because it will burden the poor, and proposed the government instead raise the percentage of income tax.

Separately, in a hearing with House Commission VII on social welfare, the Ministry of Health and Social Welfare revealed its program on the use of the funds from the reduced fuel subsidy to provide free health service to the poor.

Minister Achmad Sujudi said that his office needed Rp 525 billion for the program. (bby)