Fathan Qorib, Yanuar Pribadhie
The 2014 State Budget is presenting the Government with challenges, particularly with regard to limited fiscal allocations. This challenge is mainly being caused by requirements for employee spending, debt payments, and subsidies.
Marzuki Alie, the Speaker of the House of Representatives, stated that in addition to these allocations, there are also a number of other spending requirements mandated by the Constitution, the so called mandatory spending.
This mandatory spending consumes 20 percent of the State Budget for the education sector, and 5 percent for health. Moreover, the general allocation fund (DAU) takes 26 per cent of domestic income with budget payments for designated autonomous regions such as Aceh, Papua, and Yogyakarta.
“The mandatory nature of budget allocation restricts room for more productive budget allocating, or fiscal budgeting, with the result that the use of the State Budget cannot be optimized,” said Marzuki in his speech in Jakarta on Wednesday.
The “fiscal budget” is the availability of financial resources for the Government to finance, for example, infrastructure. Marzuki hopes that the Government will allocate more funds for infrastructure due to its broader benefits to numerous sectors, and its capability to boost economic development.
“The Government is supposed to work hard to collect tax income to achieve this. We will oversee macro assumption targets such as 6 per cent economic growth, and an inflation target of 5.5, and the value of the Rupiah,” Marzuki said.
Meanwhile, Ucok Sky Khadafi, Director of the Indonesian Forum for Budget Transparency, agreed that tax income should be optimized. He added that collectively certain government policies such as the LPG hike may possibly add to the subsidy allocation.
“We hope that the Government can figure out a way to minimize the fiscal deficit,” concluded Ucok.
(hot/kc)
Fathan Qorib, Yanuar Pribadhie
The 2014 State Budget is presenting the Government with challenges, particularly with regard to limited fiscal allocations. This challenge is mainly being caused by requirements for employee spending, debt payments, and subsidies.
Marzuki Alie, the Speaker of the House of Representatives, stated that in addition to these allocations, there are also a number of other spending requirements mandated by the Constitution, the so called mandatory spending.
This mandatory spending consumes 20 percent of the State Budget for the education sector, and 5 percent for health. Moreover, the general allocation fund (DAU) takes 26 per cent of domestic income with budget payments for designated autonomous regions such as Aceh, Papua, and Yogyakarta.
“The mandatory nature of budget allocation restricts room for more productive budget allocating, or fiscal budgeting, with the result that the use of the State Budget cannot be optimized,” said Marzuki in his speech in Jakarta on Wednesday.
The “fiscal budget” is the availability of financial resources for the Government to finance, for example, infrastructure. Marzuki hopes that the Government will allocate more funds for infrastructure due to its broader benefits to numerous sectors, and its capability to boost economic development.
“The Government is supposed to work hard to collect tax income to achieve this. We will oversee macro assumption targets such as 6 per cent economic growth, and an inflation target of 5.5, and the value of the Rupiah,” Marzuki said.
Meanwhile, Ucok Sky Khadafi, Director of the Indonesian Forum for Budget Transparency, agreed that tax income should be optimized. He added that collectively certain government policies such as the LPG hike may possibly add to the subsidy allocation.
“We hope that the Government can figure out a way to minimize the fiscal deficit,” concluded Ucok.
(hot/kc)