Speaking in a Cabinet meeting on Monday, Jokowi said the government would prioritize its spending next year on improving Indonesia’s human resources.

“The draft of the 2020 state budget will prioritize human resources, focusing on education, health care and skills training to suit the needs of the market and industries,” Jokowi said.

During his reelection campaign, Jokowi promised to issue three cards, including the Indonesia Smart Card (KIP) for tertiary education and an affordable staple foods card, which would be accommodated in the 2020 state budget, said Finance Minister Sri Mulyani Indrawati.

KIP for university students, which is a revamp of the existing state-sponsored scholarship program Bidikmisi, is said to take up Rp 12.4 trillion (US$ 890.48 million) of the 2020 budget as the government will increase the number of recipients from 360,000 students in 2019 to 780,000 students next year.

Meanwhile, the government will set aside Rp 25.7 trillion for the affordable staple foods card, which would take over the current rice assistance (Rastra) social aid scheme and be disbursed to 15.6 million families, said Sri Mulyani.

The third card is a preemployment card, which is part of a program designed to fund job seekers access training. The program’s budget of Rp 10.3 trillion will be used to issue 1 million preemployment cards for regular skills training and another 1 million cards for digital training, she added.

Sri Mulyani went on to say that the government would consider Jokowi’s vision and mission in drawing up the draft of the 2020 state budget, which would be delivered by Jokowi to the House of Representatives during the annual financial note address on Aug. 16.

“We will design the 2020 state budget to support the first-year agenda of the 2020-2024 national medium-term development plan [RPJMN], as well as to accommodate the vision and mission of the elected President,” she told reporters on Monday.

In addition to the cards’ issuance, the government is also preparing drafts of regulations that will amend existing taxation rules, hinting that it would deliver a corporate income tax cut as promised by Jokowi during his campaign trail.

““We are preparing a draft regulation and will consult with members of the public, including businesses, and we hope the President will convey it in the coming months,” Sri Mulyani said, adding the House, as a stakeholder, would consult on the amendment of the taxation law, which has been in place for more than a decade.

Indonesia’s taxation regime is largely regulated through three laws, namely the General Taxation Law (UU KUP) and the Value Added Tax (VAT) Law, both of which were last amended in 2009, and the Income Tax Law (PPh), which was last revised in 2008.

Sri Mulyani said the tax cut’s effects on state revenue collection would likely be felt by the end of 2020 or the beginning of 2021, adding that the government projected that tax revenue growth next year would be in line with the pace of economic expansion in the last five years, which she said was “quite high but realistic”.

Institute for Development of Economics and Finance (Indef) economist Bhima Yudhistira Adhinegara called on the government to be careful in determining the state revenue target for next year’s budget, considering numerous fiscal incentives given by the government and a bleak outlook in commodity prices.

“If the tax revenue growth exceeded our GDP expansion rate, which is about 5 percent, it could create a sizeable [revenue] shortfall,” said Bhima, suggesting that the government also prepare for a scenario in which the fiscal deficit widens because of weak revenue collection.

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