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Jokowi to cut 2017 state budget again as lead up 2018 budget cuts
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President Joko "Jokowi" Widodo speaks during a Cabinet meeting. Jokowi has instructed his Cabinet to cut 2017 state budget in order to allow a smooth transition to further cuts to the 2018 budget. (Courtesy of the Presidential Office/File)
P
resident Joko "Jokowi" Widodo has instructed his Cabinet to cut the 2017 state budget in order to facilitate a smooth transition to further cuts in the 2018 budget.
The government targets economic growth at 5.6 percent in 2018 and plans to allocate Rp 2.2 quadrillion (US$165.03 billion) in spending to help achieve that.
Jokowi says he wants the state budget reduced this year to make a benchmark for the 2018 state budget. Expenditure is set at Rp 2.08 quadrillion for this year.
"We set 5.6 percent growth for 2018. But I want the budget cut not only later in 2018 but also in 2017 as we are only in the first quarter,” Jokowi said during a meeting on the 2018 state budget at the State Palace on Tuesday. “We want massive reductions in allocations for all ministries and institutions in 2017-2018.”
Moreover, the President decided that 2017 spending on government procurements should not exceed last year’s expenditure of Rp 257.7 trillion to ensure efficiency.
(Read also: State budget inefficiencies lessened: Finance Ministry)
To allow better spending, the government will also change the method of calculation for regional transfers. In a change to the previous method, amounts transferred to regional administrations for their budget allocations will be flexible, depending on state income.
"If our income decreases, transfers must decline too. I want transfers to the regions to follow our income fluctuations,” Jokwo said. “They now enjoy fixed transfers while we have trouble making money.” (lnd)
