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Subsidies account for only 9% of 2016 draft state budget: VP
Vice President Jusuf Kalla has said that subsidies will account for only around 9 percent of total budgetary allocations in the state budget plan (RAPBN) for the 2016 fiscal year
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V
ice President Jusuf Kalla has said that subsidies will account for only around 9 percent of total budgetary allocations in the state budget plan (RAPBN) for the 2016 fiscal year.
'Next year, our subsidies will account for only between 9 and 10 percent [of the government budget],' he said as quoted by Antara news agency during a meeting at the National Development Agency (Bappenas) headquarters in Jakarta on Wednesday.
The Vice President said that of that total, 4 percent would be allocated for non-energy subsidies, followed by 3 percent for fuel subsidies and 2 percent for electricity subsidies.
The government earlier said that it aimed to reduce subsidies due to a limited state budget. Around 81 percent of budgetary allocations in the RAPBN 2016 are non-discretionary in nature. Therefore, although the RAPBN 2016 amounts to Rp 2.09 quadrillion (US$155.03 billion), the government has a discretionary fund of only Rp 398 trillion or around 19 percent of the state budget, some of which will be used for subsidies.
Based on the 1945 Constitution and Law No.36/2009 on health, around 20 percent and 5 percent of the RAPBN must be directed to education and health spending respectively.
Kalla said orderliness and accuracy in budget implementation were the keys to success in the state budget's role in promoting economic growth.
Earlier, Indonesian Political Economy Association (AEPI) analyst Dani Setiawan said that the government's electricity subsidy change plan raised by the state electricity firm PLN was improper because it would lead to a reduction in subsidies in the budgetary allocations in the RAPBN.
'This policy is improper. Economically, subsidy cuts will reduce our national competitiveness, especially in facing the trade liberalization practices that are getting more aggressive,' he said in Jakarta on last Thursday.
The activist reminded those concerned that the subsidization of energy, including electricity, was an important component to maintain the presence of cooperatives, micro businesses, and small and medium enterprises that during this time had supported the national economy.
'Energy is a primary need of the people. Subsidy is a right of the people. Thus, channeling subsidies to other sectors via various cards is a discriminative act against the people,' said Dani, referring to the Indonesian Health Card (KIS) and the Indonesian Smart Card (KIP) programs and also the Prosperous Family Saving Card (KKS) program delivered under President Joko 'Jokowi' Widodo's administration. (ebf)(+++)
