The first formulation of minister Sri Mulyani

September 30, 2016, 10.33 AM  | Reporter: Andy Dwijayanto, Asep Munazat Zatnika
The first formulation of minister Sri Mulyani


JAKARTA. Government and the House of the Representatives (DPR) on Thursday (29/9) reached agreement over 2017 State Budget Plan. Under the plan, the target of economic growth was cut to 5.1%, while the target of state’s income and expenditure were cut by 2% from 2016 Revised State Budget.

Government and DPR have agreed to set the target of state’s income at the amount of Rp1,750 trillion. This number was 2% lower than Rp1,786.2 of the amount of state’s income targeted by 2016 Revised State Budget.

Government and DPR agreed to reduce the state’s income target after the two parties decided to shrink the target of tax revenues. In 2017, government expects to collect Rp1,498.9 trillion of tax revenues, or 2% lower than Rp1,539.2 trillion of tax revenues under 2016 Revised State Budget.

The 2017 State Budget Plan will allocate Rp2,080 trillion of funds to state expenditure, or about 0.1% lower than Rp2,082.9 trillion of state expenditure under 2016 Revised State Budget.

Despite the state budget has been reduced, Minister of Finance Sri Mulyani said that government still has opportunity to launch financial expansion. In this case, the cut in state budget is  caused by the budget constraint over several expenditure posts, including budget for subsidy.

Sri Mulyani estimated that government may gain Rp40.2 trillion of funds from the budget optimization and constraint. Subsequently, government may allocate the funds to several important posts, including for providing Rp21 trillion of additional budget to government agencies, preparing an Rp4.35 trillion for energy risk reserves, settling an Rp11.38 trillion of subsidy underpayment in 2015, as well as allocating additional  General Allocation Fund (DAU).

Sri Mulyani is also optimistic that tax revenues from oil and gas sector will rise in 2017. Aside of the tax revenues, it is expected that government may reduce state expenditure on cost recovery.

Economist at Samuel Asset Management Lana Soelistianingsih said that due to the budget constraint, government should prioritize several programs, which may drive economic equality, such as infrastructure projects and corruption eradication.

“I hope Sri Mulyani will fulfill her promise to drive economic equality”, Lana said.

(Muhammad Farid/Translator)

 

Editor: Dupla Kartini

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