24 Aug 2016
“Therefore, the 2017 State Budget will be further discussed at a technical level,” said House Speaker Ade Komarudin during the plenary meeting at the House of Representatives (DPR) Building, Jakarta, Tuesday (23/8).
In the 2017 State Budget, economic growth is assumed to be 5.3%. Inflation is 4%, with a three-month SPN interest rate of 5.3%. The rupiah exchange rate is IDR13,300/US$, with an oil price of US$45/barrel and oil production of 780,000 barrels per day and 1.1 million barrels of oil equivalent in gas.
State spending is proposed at Rp2,070.5 trillion. State revenue is targeted at Rp1,737.6 trillion, resulting in a deficit of Rp332.8 trillion or 2.41% of Gross Domestic Product (GDP).
Each faction in the House of Representatives (DPR) highlighted several issues proposed by the government. Quite sharp criticism came from the Gerindra faction, delivered by Mizar Zahro.
Mizar stated that the economic growth assumed by the government is still below expectations. In fact, with the tax amnesty program, the economy should be able to grow higher than predicted.
Moreover, from a growth quality perspective, it is still not sufficient to improve the welfare of Indonesian people. “One of the contributing factors is that fiscal space is still minimal due to the shortfall in state revenues. This year's revenues have been revised but still could not be achieved, therefore the proposed budget cannot be implemented due to a lack of revenue,” Mizar explained.
From the PAN faction, Sukiman said the State Budget should not be planned with a deficit. Therefore, dependence on financing can be reduced. “The PAN faction wants the deficit assumption to not be included in the State Budget in the future so that if a deficit occurs, it will truly be used for productive spending such as capital expenditure and investment,” he explained.
The PKS faction also highlighted the issue of government debt. M Nasir said that the government should be able to reduce debt, the nominal value of which has continued to increase quite drastically every year. This is the case for next year as well.
Furthermore, the government must pay large amounts in debt interest installments. The government's inability to pay interest on its debt from its revenue has resulted in the deficit balance sheet, which indicates that the State Budget management is unhealthy. “The deficit in the balance sheet has also increased, indicating that the State Budget is not yet healthy. The government must be serious in managing its debt,” Nasir said.
Finance Minister Sri Mulyani Indrawati will study the views conveyed by the House. This will then become the basis for more technical discussions in the future. “I will study everything that has been conveyed and it will be discussed all at once,” Sri Mulyani said when leaving the House building. (dtf)
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