Monday, 4 January 2010

$4 Billion Left Over On State Budget

Personal note: All this money and they still want the EC etc to send them more. See other posts below.


January 04, 2010

Don Bisara & Muhamad Al Azhari The Jakarta Globe

$4 Billion Left Over On State Budget

The government has failed to spend Rp 38 trillion ($4 billion) of its 2009 budget due to inefficient bureaucracy and poor planning, despite much of the proposed spending being part of the stimulus package to help weather the global economic crisis.

“This is not the first time the government has money left over in their budget. This shows they are slow in spending the budget but very fast in making debt,” Hendri Saparini, an analyst from think-tank Econit, said on Sunday.

Anticorruption regulations also continued to slow spending, as officials feared being hauled in for graft. Analysts said reluctance to spend meant funds to boost the economy were not put into play. The situation has prompted a senior lawmaker to warn government agencies to spend their allocated budgets or else.

Adding insult to injury, the Finance Ministry had raised Rp 125.2 trillion to plug an expected 2.4 percent deficit in the state budget. But because only Rp 87.2 trillion of that money was spent, the government is now paying interest on Rp 38 trillion in idle debt.

“If this continues, it will burden future budgets as we have to pay back debt that has produced nothing for us,” Hendri said.

The Finance Ministry said in a news release on Friday that the state budget deficit was only 1.6 percent of gross domestic product for 2009, lower than the earlier 2.4 percent estimate that took the proposed stimulus into account.

However, the country fared better with its spending than in 2008, when the government still had Rp 80 trillion in unspent financing from foreign and domestic sources.

Harry Azhar Azis, chairman of the House of Representatives budget commission, said agencies and local governments that failed to meet spending targets would be sanctioned.

“The punishment could be in the form of budget cuts for the year after,” Harry said. “We will discuss with the [central] government how to scrutinize what’s wrong at the disbursement level. Is this because of officials or the regulations?”

The government managed to collect Rp 866.8 trillion in total revenue in 2009, lower than the targeted Rp 871 trillion, partly due to the economic downturn hitting commodity exports and corporate receipts falling.

State revenue from taxes was Rp 641.2 trillion in 2009, or 1.7 percent below the government’s goal, and non-tax revenue was Rp 224.5 trillion, or 3 percent above target.

The government managed to spend Rp 954 trillion in 2009, which was 4.7 percent below the targeted amount in the revised total budget of Rp 1,000.8 trillion.