Urip Hudiono, Jakarta – Eight of the 10 factions at the House of Representatives have criticized the government's 2008 budget bill as being overly ambitious and failing to support the economy and welfare of the general public.
The eight factions conveyed their official remarks on the bill, submitted by President Susilo Bambang Yudhoyono last week, during a plenary session Tuesday, which kicked off deliberations of the bill.
Only the Democratic Party faction, Yudhoyono's political vehicle with 57 seats in the House, threw its full weight behind the draft budget.
The Golkar Party, the largest faction with 129 seats, tentatively gave its support as well, but raised several concerns. Golkar is chaired by Vice President Jusuf Kalla.
"The 2008 draft budget has increased spending volume to help drive economic growth, but problems remain," the Golkar faction's Tonny Apriliani said. "Among them is why are government expenditures always slow to be disbursed...," he said.
The harshest criticism of the proposed budget came from the House's de facto opposition faction, the Indonesian Democratic Party for Struggle (PDI-P).
The second largest faction, with 109 seats, told the administration to cut back on its promises of higher growth to reduce unemployment and poverty, after failing to deliver on previous promises in its first three years in office.
"The people will have more respect for a growth target which is realistic, and actually addresses their basic problems," PDI-P speaker Hasto Kristiyanto said. In the draft budget, the government expects 6.8 percent economic growth next year on 6 percent inflation.
Government spending will be increased to Rp 836 trillion, the bulk being a 48 percent rise in capital expenditures to Rp 101.5 trillion, mostly for infrastructure development and welfare programs. This will bring the budget deficit to Rp 75 trillion, or 1.7 percent of gross domestic product.
Growth slowed to 5.5 percent last year from 5.6 percent in 2005 on fuel price turbulence that adversely affected Indonesia's economy. Unemployment and poverty levels improved slightly to 10 percent and 17 percent, respectively.
PDI-P criticized the expansive nature of next year's budget and the large deficit. The faction also criticized the Rp 2 trillion allocation for infrastructure project guarantees, saying this only benefited corporations. "Guarantees should only be for sectors that really benefit the public, such as agriculture," Hasto said.
Similarly, the National Mandate Party (PAN) faction said next year's growth target was overly optimistic, with spending likely to overwhelm lower tax revenues.
The Justice Prosperous Party said the higher growth targets contradicted the lower inflation. The United Development Party (PPP), the third largest faction in the House with 58 seats, questioned the government's capability to raise Rp 1,296 trillion in investments next year to support the 6.8 percent growth target.
The government is scheduled to deliver its response to the factions Thursday. After this, the budget draft will be discussed with the House's Budget Committee for approval by October.