As Clock Ticks Down to Budget Approval, Key Projects Hang in the Balance
Jakarta. The Indonesian government and legislators must agree on the draft 2016 budget by tomorrow, or risk costly delays to much-needed development programs.
As of press time on Thursday night, the House of Representatives’ budget committee and the government, represented by Finance Minister Bambang Brodjonegoro, were still discussing the draft budget.
The House has been deliberating the draft for the past two months.
Askolani, the Finance Ministry’s director general for budgeting, said the draft needed to be agreed on by both sides and signed into law by President Joko Widodo by Friday, or else the government would have to fall back on the revised 2015 budget, which does not include funding for a spate of essential new development programs.
“Plans to build infrastructure could be delayed, and we would face a hard time trying to achieve economic growth of more than 5 percent,” said Lana Soelistianingsih, an economist at Samuel Sekuritas and lecturer at the University of Indonesia’s School of Economics.
The 2016 draft sets government spending at Rp 2,096 trillion ($153.8 billion) and revenue at Rp 1,823 trillion, leaving a deficit of Rp 273 trillion, or 2.15 percent of the country’s projected gross domestic product.
That compares to Rp 1,984 in spending and Rp 1,794 trillion in revenue set in the revised 2015 budget.
The Finance Ministry estimates the deficit will be around 2.2 percent of GDP this year on the back of weak tax revenue.
Legislators, including those from the opposition Great Indonesia Movement Party (Gerindra) and the Golkar Party, have taken issue with several points in the draft, including revenue targets widely panned as unrealistic, and a controversial tax amnesty program that they claim is an easy out for the government in its struggles to boost tax revenue.
The House is scheduled to hold a plenary session on Friday to approve the budget if all the outstanding issues can be ironed out tonight.
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