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Jokowi-Ahok seek to slash waste and inefficiency in 2013 budget

Jakarta’s new leaders are looking to make savings of up to 20 percent in next year’s draft budget, drawn up by the previous administration, by cutting unnecessary expenses

Andreas D. Arditya (The Jakarta Post)
Jakarta
Thu, October 18, 2012

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Jokowi-Ahok seek to slash waste and inefficiency in 2013 budget

J

akarta’s new leaders are looking to make savings of up to 20 percent in next year’s draft budget, drawn up by the previous administration, by cutting unnecessary expenses.

Deputy Governor Basuki “Ahok” Tjahaja Purnama said budget efficiency, transparency and minimum standards in public service would be the focus of the new administration.

“Everything has to be measured, everything has to be accounted for precisely,” Ahok told reporters at the City Hall.

Following instructions from Governor Joko “Jokowi” Widodo, the deputy governor said he had ordered the administration’s Inspectorate to re-examine unit costs used in the draft for next year’s city budget. Unit cost is the cost of a single item or a unit.

“I want to compare the budget draft closely with this year’s budget,” Ahok said. The deputy governor said there was a possibility that next year’s budget would be lower than this year’s.

The city’s 2012 budget was set at Rp 41.3 trillion (US$4.33 billion). The city budget has been increasing every year.

The budget was Rp 31.7 trillion in 2011, Rp 26.7 trillion budget in 2010, Rp 23.96 trillion in 2009, and Rp 20.59 trillion in 2008.

“If we can make the budget leaner next year, why not?” Ahok said.

The new administration has also decided to withdraw general policies and temporary calculation documents for the 2013 budget, which had been submitted by Jokowi’s predecessor Fauzi Bowo to the City Council earlier this year.

Fauzi had planned to increase the budget by 10 percent for next year, setting the budget at Rp 44 trillion.

The former governor even planned to issue bonds before his term ended, expecting to rake in up to Rp 1.7 trillion, to raise more funds for infrastructure projects.

The City Regional Finance Management Body (BPKD) had announced that the bonds would be used to finance four city projects; the Pasar Rebo Regional Hospital in South Jakarta, the Casablanca liquid-waste management facility in East Jakarta, low-cost apartments in Penjaringan in North Jakarta and the Pulogebang bus terminal in East Jakarta.

Jokowi has only a few weeks to complete the budget draft and submit it to the Council.

The new administration is also looking to cut the budget surplus. Ahok said that in previous years, the administration had set the highest price for an item but looked for bidders with the lowest price to procure the item.

“This resulted in a budget surplus. We have to draft the new budget efficiently,” Ahok said.

Jakarta recorded a staggering Rp 6.47 trillion surplus from the 2011 budget, the largest surplus the city has ever recorded.

The city recorded a Rp 4.9 trillion surplus in 2010 and a Rp 3.7 trillion surplus in 2009.

The City Development Planning Board (Bappeda) has admitted that the large sums of unused funds were the results of poor planning, executing mishaps and internal disorganization at the administration’s
institutions.

Separately, Ucok Sky Khadafi from the Indonesian Forum for Budget Transparency (Fitra) said the Jakarta administration had failed to implement budgets efficiently.

Fitra said that the city had not managed to collect a total of Rp 959.9 billion of due payments of 40 taxes, including vehicle, hotel, restaurant and parking taxes.

“Some of these taxes are borne by the consumers, which means they have already been paid to the institutions or the companies,” Ucok said.

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