Sri Mulyani Sensitive, State Budget Helter-skelter Patching a IDR 548 Trillion Deficit

JAKARTA - Minister of Finance, Sri Mulyani, seems to give a strong warning to local governments who are considered slow in realizing spending. According to the Minister of Finance, this condition hampers economic recovery efforts that are currently being intensified by the central government.

In his notes, Transfers to Regions and Village Funds (TKDD) in the 2021 State Budget are not less than IDR 795 trillion. It is stated that the majority of these funds have gone into the pockets of the regional government because it is currently entering the closing period of the year. Meanwhile, the accumulated value of local government spending that has not yet been implemented is IDR 111.5 trillion.

"Imagine it's already November, which means there's only one month left (to be able to realize spending) because we usually close the last budget year on December 24", she said when speaking at the 2021 Government Internal Auditors Association Congress forum which was broadcast virtually, Tuesday, November 23.

The efforts of the central government to fulfill and fulfill the obligations in the Regional Budget are inversely proportional to the condition of the 'bloody' state budget. The state treasurer explained that until October 31, 2021, the budget deficit was at IDR 548.9 trillion.

The state budget, which was overdrawn by hundreds of trillions, was caused by the higher state expenditure (including TKDD) with IDR 2,058.9 trillion compared to the revenue sector of IDR 1,510 trillion. This deficit itself was filled through financing (debt) through several financial instruments.

"This means that the central government is making efforts to encourage countercyclical economic recovery with a deficit of IDR 540 trillion, but the regions are holding back spending or have not been able to spend so that there is a surplus of IDR 111.5 trillion", she said.

Furthermore, the Minister of Finance revealed that the highest absorption of regional budgets was in the Provinces of Central Java and the Special Region of Yogyakarta with a percentage of 66 percent each. Meanwhile, the region with the lowest realization of Regional Budget expenditure occurred in Maluku with a level of 39 percent.

For this reason, the Minister of Finance encourages the creation of strong synergies between the center and the regions through the execution of spending that is in rhythm so that growth targets can be achieved immediately.

“This is evidence that the effectiveness of the central and regional State Budget policies has not been synchronized, where the center encourages but the regions stop or in this case dampen it. Such conditions certainly have an impact on the economy to be not optimal", concluded Minister of Finance, Sri Mulyani.