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he government responded on Wednesday to comments made by political party factions at the House of Representatives on the 2012 state budget draft, which was unveiled by President Susilo Bambang Yudhoyono during his annual State of the Nation speech on Aug. 16.

Finance Minister Agus Martowardoyo read out the responses at a House plenary session. The factions made their comments in a plenary session on Aug. 23.

In his State of the Nation speech, Yudhoyono said that the government would allocate Rp 156.5 trillion (US$18.3 billion) for basic infrastructure, agriculture and energy and communications infrastructure.

He added that the government would allocate Rp 30.5 trillion for roads, Rp 12.4 trillion for development of residential infrastructure, Rp 16.3 trillion for water resources management, Rp 6.9 trillion for sea transportation management and Rp 8.8 trillion for train management.

Three fractions commented on the State Budget bill by saying that the infrastructure budget should be used for projects that might connect villages to reduce disparity. They also encouraged the government to prioritize agriculture and fishery infrastructures, saying that this would create jobs.

Agus said that the government agreed with the factions’ ideas as there was a plan to develop village connectivity in order to reduce infrastructure disparity.

“The National Program for Community Empowerment [PNPM Mandiri] would help constructing roads between economic hubs among villages,” Agus said.

He added that the Maritime Affairs and Fisheries Ministry would construct agriculture and fishery infrastructure mostly in fishing villages, including fishery ports and transportation services that would allow the movement of fishery products between villages.

“In 2012, the ministry would develop PPI fishery ports in cities or regencies through the construction of cold storages and Fisherman Solar Packed Dealer. We plan to build 400 PPI,” Agus added.

Four factions expressed their pessimism over the government’s target to produce 950,000 barrels per day (bpd) based on the fact that Indonesia could only produce 895,000 bpd from December 2010 to July 2011.

Responding to the pessimism, Agus said the government was paying attention to the production capacity of existing fields, new fields and increasing investment in the oil and gas sector.

“Therefore, we are very optimistic about our target,” he said.

He pointed to low exploration activities and new reserve findings as the reason for the low production level over the six-month period.

Responding to demands by three factions that fuel subsidizes be adjusted to meet targets and be subject to more accountable and efficient management, Agus admitted that so far the distribution of subsidized fuel had “disrupted the state budget”, without elaborating further.

“Therefore we will continue to convert kerosene into Liquefied Petroleum Gas [LPG] and increase the use of alternative energy,” he said.

The government, he said, would also control and reduce the consumption of subsidized fuel as well as revise regulations on fuel subsidy.

Commenting on recommendations to increase the basic salaries of civil servants, police and military personnel, Agus said the government would increase basic salaries by up to 10 percent in 2012 so that civil servants would be encouraged to work more professionally, more productively and with greater integrity. “We would also give them a bonus of one month’s salary,” he said. (fem)