Urip Hudiono, Jakarta – Government officials will just have to put up with their cramped offices and bring their own pens into work next year as the government plans to divert money away from the bureaucracy so as to increase spending on new roads and public welfare.
Under the 2008 budget, the government will increase capital and social welfare spending to Rp 168.7 trillion (US$18.7 billion), while cutting back routine spending in 15 ministries to Rp 46.8 trillion.
"The increased allocations will be used for infrastructure development, such as for building and fixing roads in Sumatra, Kalimantan and Papua.
"Irrigation systems and sanitation facilities are also included," State Minister for National Development Planning Paskah Suzetta said after a limited Cabinet meeting on the budget, which was chaired by Vice President Jusuf Kalla.
"The higher spending will also be used for social welfare programs, such as improving the public healthcare service, funding rural development programs, and providing subsidized rice and other subsidies to the poor."
The government will cut as much as Rp 37.1 trillion from the Rp 83.9 trillion it had planned to allocate for routine spending in next year's budget. The original allocation for capital spending was Rp 85.3 trillion, while Rp 46.3 trillion was allocated for social welfare programs.
For this year's budget, in the final half-year budget revisions the government will cut routine spending for the full year to Rp 71.54 trillion from Rp 72.1 trillion, keep capital spending pegged at Rp 73.1 trillion and increase social welfare spending to Rp 49.4 trillion from Rp 40.7 trillion.
The savings plan will not affect regular spending on civil service salaries, but will mostly involve the scrapping of unnecessary travel and seminar costs, and wasteful spending on office stationary, Paskah further said.
Capital spending in ministries not directly related with infrastructure development would also be put to more productive use, rather than constructing office buildings and buying new official cars. "The Health Ministry, for example, will instead use the money to build research laboratories and develop vaccines," he said.
Paskah said the government will propose the budget revisions to the House of Representatives for deliberation and approval after a full Cabinet meeting soon.
Legislators are currently discussing the 2007 budget revisions with the government, while President Susilo Bambang Yudhoyono will officially present the outlines of the 2008 budget during his Independence Day state address in August.
"We're sure they will support it as it's in line with our national interest – that is, speeding up economic growth next year so as to reduce unemployment and poverty," Paskah said.
Indonesia needs to grow by at least 7 percent per year to reduce open unemployment to 5.1 percent and poverty to 8.2 percent in 2009. Such growth will require some $100 billion in investment alone this year, including infrastructure spending.
Indonesia's economy grew by 5.5 percent last year, although it picked up to 6 percent in this year's first quarter, and may have further paced up to 6.1 percent in the second quarter.