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Jakarta Post

2015 state budget approved

The House of Representatives passed an infrastructure-focused, revised 2015 state budget on Friday, despite a 10-hour delay after the Indonesian Democratic Party of Struggle (PDI-P) found a mismatch in the budget’s details

Satria Sambijantoro (The Jakarta Post)
Jakarta
Sat, February 14, 2015

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2015 state budget approved

The House of Representatives passed an infrastructure-focused, revised 2015 state budget on Friday, despite a 10-hour delay after the Indonesian Democratic Party of Struggle (PDI-P) found a mismatch in the budget'€™s details.

The Red-and-White Coalition, which controls seats in the House, approved the budget without any protest, paving the way for President Joko '€œJokowi'€ Widodo to implement his economic reforms.

'€œEverything in the budget is in line with our demands jointly discussed between the House budget committee and government,'€ House Speaker Setya Novanto from the Golkar Party told reporters after the plenary session.

With the budget passed without significant opposition, Setya denied suspicions that a political deal had been reached between Jokowi, Gerindra Party patron Prabowo Subianto and Golkar chairman Aburizal Bakrie.

On Jan. 29, Jokowi met with Prabowo, his rival in the 2014 presidential election, in a closed-door meeting at the State Palace to discuss among other issues the passage of the budget, government officials confirmed.

On Aburizal'€™s interests, there were suspicions that assistance from state coffers had been given to his companies.

The revised 2015 state budget Law stipulates the government is obliged to allocate Rp 781.6 billion to settle the payments of victims of the mudflow disaster in Sidoarjo, East Java, for which Aburizal'€™s company, PT Lapindo Brantas, was deemed responsible.

In the new budget, state spending will reach an historic high of Rp 1.98 quadrillion, lower than Rp 2.01 quadrillion in the original budget formulated by former president Susilo Bambang Yudhoyono, but seen as better-targeted, given the elimination of the Premium fuel subsidy.

This year, total state revenue will hit 1.76 quadrillion, most of which will come from tax revenue that is targeted to reach Rp 1.48 quadrillion.

Total state revenue was relatively unchanged compared to the original budget, but the tax revenue collection target was set Rp 290 trillion higher, an ambitious goal that Finance Minister Bambang Brodjonegoro described as being both a key and a risk to budget stability this year.

The taxes will be used to finance Jokowi'€™s development programs, which are part of his plan to reach 7 percent economic growth during his five-year term.

Nevertheless, Bambang expressed optimism on the outlook of the Indonesian economy, citing the health of the budget'€™s overall posture as the fiscal deficit '€” the gap between revenues and spending '€” stood at a mere 1.9 percent, compared to 2.2 percent in the original budget.

'€œThe decline in fiscal deficit is expected to give a positive signal to the people, stakeholders and both domestic and foreign investors that the budget will stay in healthy and sustainable shape,'€ he said, speaking to lawmakers.

The plenary session discussing the budget, scheduled to start at 9 a.m., ended at 9 p.m., after PDI-P legislators Rieke Diah Pitaloka and Aria Bima claimed there were mismatches in funds allotted in the budget'€™s draft and the funds approved during discussions in their commissions. The pair demanded a postponement.

The differences in details, they argued, included funds allotted to the Healthcare and Social Security Agency (BPJS Kesehatan) as well as capital injection for state-owned enterprises.

From an economic perspective, the budget showed the new government was committed to spurring growth and fixing the economy'€™s underlying infrastructure problems, said Ari Kuncoro, the dean of the Department of Economics at the University of Indonesia.

The Finance Ministry has stated that capital expenditure, which includes ministries'€™ investments and infrastructure projects, will be doubled to between Rp 280-290 trillion this year from Rp 156.4 trillion in the original budget, with its details following later.

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