Budget Cuts Will Not Affect Economy in Regions: Interior Minister
30 August 2016 11:12 WIB
TEMPO.CO, Jakarta - The government believed that the postponement of the disbursement of general allocation fund of Rp5 billion to over Rp80 billion per month would not affect the economy in regions.
Interior Minister Tjahjo Kumolo said that he believed Finance Minister Sri Mulyani would not arbitrarily cut the general allocation fund without careful consideration.
He underlined that last year’s absorption of funds in districts, municipalities and provinces was low. Likewise in the first quarter of 2016.
Tjahjo has expressed his doubts whether current funds would be absorbed bearing in mind there are only four months left for regions to do so.
“It will not [be absorbed entirely], deposits at banks shows that absorption is low. We have to be fair [in judging the situation],” he said at the State Palace compound, Monday, August 29, 2016, as quoted by Bisnis.com.
According to him, the funds would be more effective if used to build infrastructure, eradicate poverty, and improve welfare. Therefore, he has urged regional governments to reduce unnecessary spending such as expenditures for meetings and working visits.
In addition, Tjahjo also said that the general allocation fund is not reduced. It will instead be carried over to the next fiscal year. He also expressed that it would not reduce civil servants salary.
“I believe it will not affect [civil servant salary]. It’s not a budget cut, it will be carried over to the next two to four months. I realize that the majority of regional governments have been spending their budget for internal purposes instead of using it for capital expenditure,” he said.
The Fiscal Authority through Finance Ministry Regulation No. 125/PMK/07.2016 has decided that 169 regions will be allocated with a Rp19.4 trillion in carryover funds.