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Govt expects US$3.85 billion efficiency in 2016 revised budget
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he government expects to book Rp 50.6 trillion (US$3.85 billion) from efficiency and spending cuts, while slashing most of the economic assumptions in the revised 2016 state budget.
Finance Minister Bambang Brodjonegoro said the Rp50.6 trillion would result from operational expenditure cuts, such as in official travel, meeting packages, new building construction, electricity, and telephone and water services.
Additional budget posts that will see cuts are maintenance expenditures, office equipment procurement, advertising expenditures, non-infrastructure capital expenditure as well as operational vehicles in the ministries, he went on.
"The efficiency is expected to save Rp21.5 trillion from all ministries and institutions. We also expect Rp29.2 trillion in expenditure savings in social assistance fund and non-priority programs. The total is Rp50.6 trillion," Bambang said at the State Palace on Thursday in Jakarta.
The government, he continued, had adjusted the economic assumption in the revised 2016 state budget in line with the latest economic conditions. To achieve economic growth of 5.3 percent as targeted in the 2016 state budget, the inflation target was cut from 4.7 percent to 4 percent.
Meanwhile, the rupiah is expected to appreciate against the US dollar to Rp 13,400 from Rp 13,900 per dollar. Indonesian crude price decreased from $50 to $35 per barrel, owing to the persistent global oil price plunge.
Therefore, there will be a slight adjustment in oil and gas production, Bambang said. He estimated tax revenue in oil and gas sectors to decrease by Rp 17 trillion, while non-tax revenues in oil and gas would decrease further by Rp 50 trillion. In addition, non-tax revenue in non-oil and gas sectors are expected to decline by almost Rp25 trillion.
"There will be a shortfall in oil and gas revenues. But, we will maintain tax-revenues in the non-oil and gas sectors. One of the most important factors is the tax amnesty implementation," Bambang said. (ags)
