GOVT TO ADDRESS CONSTRAINTS IMPEDING BUDGET ABSORPTION By Fardah

Jakarta, Aug 15, 2015 (Antara) -- Members of the parliament and some businessmen have expressed concern over the low absorption of the state budget by ministries in the first semester of 2015.   
  Till late June, budget absorption was only 26.2 percent, which is Rp208.5 trillion, far below the target, according to a report.

        However, other data showed that till July 31, spending by ministries/government institutions amounted to only Rp261 trillion, which is 32.8 percent of the allocation in the state budget of Rp795.5 trillion for 2015.

        According to information from the Finance Ministry, budget spending by a number of government agencies was less than 25 percent of the target till mid 2015.

      For example, the Maritime Affairs and Fisheries Ministry spent only Rp2.3 trillion, 21.5 percent of its Rp10.6 trillion share of the state budget, and the Public Works and Public Housing Ministry used only Rp24.8 trillion, 20.9 percent of its Rp118.5 trillion share.    
  The Transport Ministry and the Energy and Mineral Resources Ministry lag far behind with spending reaching only 11 percent and 10.9 percent of their respective targets.

       In addition, the Rural and Backward Areas Ministry has done close to nothing with its budget, having spent only 2.6 percent of its allocated funds. 
  Therefore, Chairman of the Indonesian House of Representatives Setya Novanto has urged the government to increase the absorption of the state budget in the second semester of 2015, to boost economic growth.

       "As we have been informed, budget absorption by the central government, notably ministries and institutions, in the first semester of 2015 was less than that in the first semester last year," he said in his opening remarks at the plenary session of the first sitting of the parliament for 2015-2016, on August 14.

         To expedite spending, Novanto appealed to the government to intensify the realization of infrastructure development projects, which is something that the government promised on multiple occasions.

          "An increase in budget absorption can boost economic growth," he affirmed during the plenary session, where President Joko Widodo later delivered a speech on the 2016 draft state budget and its financial notes.

         Besides the parliament, the Indonesian Association of Construction Companies (Gapensi) also urged the government to speed up the implementation of its projects to revive the flagging economy.

        As the consumption sector is the main driving force of the country's economic growth, the utilization of the budget is important, Secretary General of Gapensi Andi Rukman Karumpa explained.

         He warned of a number of challenges threatening the country's economy, including a hike in the price of oil, wider current account deficit, and a fall in the prices of commodities.

        A short-term solution that can help to cope with the problems is the revival and expansion of the construction sector that needs considerable funding, he suggested.

       The new economic team of the cabinet should address the problem in the field more seriously, he remarked, referring to the new ministers installed following the recent cabinet reshuffle.

        On August 12, President Joko "Jokowi" Widodo reshuffled his cabinet, replacing a number of key ministers, especially those in the economic field.

        Jokowi has asked his new coordinating minister for economic affairs, Darmin Nasution, to expedite budget spending.

         According to the head of state, funds are available, but the problem was the delay in implementation.

         Furthermore, the government proposed a national draft budget of Rp2,121.3 trillion for 2016, with revenue set at Rp1,848.1 trillion and deficit at Rp273.2 trillion.

        "The deficit in the draft 2016 budget is Rp273.2 trillion," the president stated before the parliament.

         Based on the direction of policies and targets to be achieved, he added, the draft budget for 2016 has been set at Rp2,121.3 trillion, with central government spending set at Rp1,339.1 trillion, spending of ministries and state institutions at Rp558.7 trillion, and transfers to regions and villages at Rp782.2 trillion.

         "In accordance with the Nawacita program, the government is accelerating the development of infrastructure facilities, including toll roads in the islands of Java and Sumatra that will be completed in a few years," Jokowi affirmed in his state of the nation address delivered on the occasion of the 70th anniversary celebrations of Indonesia's independence.

         On August 14, Jokowi delivered three speeches before legislators and senators, unlike previous presidents who delivered only two speeches.

         In addition, Finance Minister Bambang Brodjonegoro pointed out on Friday, August 14, that he was optimistic they would achieve the 5.5 percent growth target set for 2016.

        He emphasized that it was of utmost importance to increase the government's budget spending, especially in the infrastructure sector, as explained by the president in his speech.

        The government has set the budget for infrastructure spending at some Rp313 trillion, higher than the Rp290 trillion allocated for this year, the minister revealed.

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(F001/INE/a014)
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(T.F001/A/BESSR/A. Abdussalam) 15-08-2015 18:57:08