Markus Junianto Sihaloho, Irvan Tisnabudi & Dion Bisara – Threats by opposition lawmakers to block passage of the government's 2010 budget revision bill proved hollow as the measure sailed through the House of Representatives' budgetary committee, paving the way for final approval in a plenary meeting today.
In the charged atmosphere in the House following its lengthy Bank Century investigation, revisions to the budget encountered a number of obstacles brought on by political opponents of Finance Minister Sri Mulyani Indrawati. At one point a handful of lawmakers even threatened to have her barred from the House chamber.
The last attempt to stall the crucial budget revision, which allows the government to adjust the budget to changes in economic indicators that affect spending and revenue, was by the Indonesian Democratic Party of Struggle (PDI-P), which said it would reject the measure but denied the move was aimed at Sri Mulyani.
But on Saturday, the smoke cleared. Harry Azhar Azis, a Golkar Party lawmaker and chairman of the budget committee, said: "The draft of the revised budget has been approved and will be brought to a plenary session on Monday." Despite the possibility of isolated objections, "I am optimistic the revised budget will pass."
Saturday's hearing, which was attended by 56 members of the committee out of the total 85 members, was relaxed, with occasional bursts of laughter coloring the atmosphere.
The smooth passage of the revision bill marks another triumph for Sri Mulyani who, along with Vice President Boediono, was targeted by political parties, including Golkar and PDI-P, during nearly three months of bitter hearings that began late last year on the 2008 Bank Century bailout. Not only did the parties fail to have her removed from office, as many had called for, she has emerged from the process seemingly secure and guiding a robust economy.
Among the changes in the budget structure was a government aim to increase state spending 1.7 percent to Rp 1,123 trillion ($124 billion) this year, partly to accommodate higher subsidies and infrastructure spending.
Energy subsidies, including on oil and electricity, which make up the bulk of the subsidies, are projected to rise nearly 90 percent from the original budget to Rp 201.8 trillion as the government lifts the Indonesian crude oil price to $80 a barrel from $65 a barrel.
The committee approved a state budget deficit that is 2.1 percent of gross domestic product, equivalent to Rp 129.8 trillion in the revised version, up from Rp 98 trillion in the original budget approved last year. Meanwhile, the state revenue target is Rp 989.6 trillion, up from Rp 974.8 trillion.
Other indicator targets approved on Saturday included 5.8 percent economic growth for 2010, up from 5.5 percent previously; an inflation target of 5.7 percent, up from 5 percent previously; and an average exchange rate of Rp 9,200 per dollar.
The House also agreed to increase electricity tariffs by 10 percent for most commercial and residential consumers after offering a Rp 2 trillion increase in the subsidy in exchange for a lower rate hike.