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City Council, administration look to speed up 2020 budget deliberations
The Jakarta administration and the City Council have agreed to set next year’s city budget at Rp 87
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span>The Jakarta administration and the City Council have agreed to set next year’s city budget at Rp 87.9 trillion (US$6.25 billion), and will speed up deliberations to endorse the budget before year-end after failing to meet the deadline set by the Home Ministry.
The budget priorities and ceiling (KUA-PPAS) for next year was increased by 1.2 percent from this year’s revised budget of Rp 86.89 trillion.
The administration initially proposed a KUA-PPAS of Rp 95 trillion in July to the council. However, deliberations were delayed following the inauguration of new councillors for the 2019 to 2024 term.
The administration proposed a new budget ceiling of Rp 89 trillion in the first budget deliberation meeting in October when the city faced a potential budget deficit.
The city was facing a budget deficit because Rp 6.39 trillion in profit-sharing funds had yet to be disbursed by the central government and because of the administration’s sluggishness in achieving its tax collection target of Rp 44.54 trillion.
Council Speaker Prasetyo Edi Marsudi from the Indonesian Democratic Party of Struggle (PDI-P) said the councillors had considered cutting budget allocations for certain sectors.
The proposed budget cuts consist of reducing the capital injection for city-owned developer PT Jakarta Propertindo (Jakpro) from Rp 3.1 trillion to Rp 2.7 trillion. The Rp 400 billion cut involves eliminating the budget allocation to build a five-star hotel as part of the revitalization of the Taman Ismail Marzuki arts and cultural center in Central Jakarta.
The councillors are also considering cutting subsidies for the transportation sector by Rp 1.1 trillion to Rp 5.5 trillion. The subsidies are allocated to cover the public transportation fares of city-owned transportation operators PT Transjakarta, PT MRT Jakarta and PT LRT Jakarta.
The councillors also plan to cut the budget for the city’s flagship zero rupiah down payment housing program from Rp 1 trillion to Rp 500 billion.
To boost the city’s income, Prasetyo urged the administration to be more proactive in collecting taxes and fees. From the approved budget, Rp 57.5 trillion is expected to be come from the city’s revenue, an increase from Rp 50.8 trillion in this year’s annual budget.
“Please boost tax and fee collection from sectors that can contribute more revenue, like parking fees,” he said on Thursday.
The KUA-PPAS serves as a guideline for annual budget deliberations. After the signing of a memorandum of understanding (MoU) on the budget ceiling on Thursday, the administration and council will deliberate the items in next year’s programs and activities.
Despite the approval, Prasetyo said budget allocations for programs and activities might still change during the deliberation of the city budget, so long as the total expenses did not exceed the agreed budget ceiling.
Furthermore, he emphasized that next year’s budget should be focused on programs related to flood mitigation and efforts to tackle traffic congestion.
“If programs focused on flood mitigation and traffic congestion have yet to be accommodated, I would scrap it [the draft budget] again,” he said.
City Council budgetary committee member Syarif from the Gerindra Party said in the upcoming deliberation meetings the councillors would focus on ways to decrease the city administration’s direct expenditure and increase its indirect expenditure.
Direct spending is dominated by wages and salaries, while indirect spending refers to purchases of goods and services.
In response, Jakarta Governor Anies Baswedan said he would ensure the budget allocations for the city’s strategic programs would be adequate.
“We will make sure the budget for all strategic programs is secure because that relates to the public interest,” he said.
The councillors agreed to complete the deliberation and endorse the city budget on Dec. 11, after which it will be submitted to the Home Ministry.
The ministry previously set a deadline of Nov. 30 for all regional administrations to complete the deliberation of their 2020 regional budgets. Should the budget be endorsed after the year ends, councillors and the governor will be denied their financial rights for six months as an administrative sanction, as stipulated in the 2014 Regional Government Law.
Regional Autonomy Watch (KPPOD) executive director Robert Endi Jaweng expressed doubt the process would completed by this deadline, as time was fast running out and both the executive and legislative branches still had plenty to discuss.
Robert also stressed that a delayed budget endorsement would impact the public the most.
“The longer it takes, the more [budget] will be used. Hence, funds will not be optimally used,” the KPPOD activist said.
The deliberation of the KUA-PPAS attracted public attention recently when it was discovered that excessive allocations in the billions of rupiah had been earmarked for several line items such as multipurpose glue, pens and computers.
