Presidential Election Inhibits Budget Absorption
12 June 2014 16:30 WIB
TEMPO.CO, Jakarta – This year's absorption of the State and Expenditure Budget is estimated to be lower than in 2013. Economist from the University of Indonesia, Lana Soelistianingsih, said that the process of cabinet replacement following the presidential election could hamper budget absorption, especially in the second half of the year.
"All ministries projects are usually corrected and ministry officials will wait for instructions from the new leader," she told Tempo yesterday.
Lana said that changes in the government have always inhibited absorption. This year, other factors that will also affect state budget actualization include the amended state budget revision—currently still being discussed by the House of Representatives (DPR).
There is also the government's decision to trim ministries and agencies budgets by up to Rp100 billion to narrow the trade deficit. "Now, ministries and state agencies can only wait to see if their projects can be carried on or be stopped," he said.
Lana urged the DPR to quickly approve the Amended budget draft to address the situation. In addition, she suggests optimizing government spending, particularly in the infrastructure sector.
Data from the Finance Ministry shows that the actual state expenditure from January to April reached Rp432.68 trillion, or 23.5 percent of 2014 State budget ceiling. The absorption is lower than in the same period last year, which reached 23.7 percent and lower than the government target of over 25 percent of the budget ceiling.
Enny Sri Hartati, executive director of the Institute for Development of Economics and Finance (INDEF), said the government faces many problems in allotting state expenditures. The problems include operational and non-operational costs that are not well defined, which lead to budget overlap. In addition, there are social aid posts in all ministries that are prone to leaks. Ideally, she said, the funds are distributed centrally by the Ministry of Social Affairs to allow clear supervision.
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