Refuse To Increase Deficit, Purbaya Reveals To Maintain Credibility

JAKARTA - Minister of Finance Purbaya Yudhi Sadive emphasized that the deficit limit for the State Revenue and Expenditure Budget (APBN) will still be maintained at 3 percent of Gross Domestic Product (GDP), although many other countries have exceeded that threshold.

This statement was conveyed by Purbaya when responding to the request of one of the regional heads who proposed that the salaries of state civil servants (ASN) in the regions be financed by the central government.

According to him, this is not possible unless the APBN deficit limit is allowed to exceed 3 percent.

However, Purbaya rejected the discourse because he was worried that it would have a negative impact on his credibility as Minister of Finance and emphasized his commitment to maintaining the ratio of the deficit to GDP.

"So, if asked now, I definitely can't, unless I break the deficit to GDP ratio above 3 percent, but later there will be a fuss, is Bloomberg there? Reuters is there?, later they will make a fuss, they will say Indonesia is not necessary, even though America is all like that, yes. They appointed me as an incompetent minister. So I (will) guard it," said Purbaya at his office, Central Jakarta, Tuesday, October 7.

Furthermore, Purbaya said that his party will focus on optimizing state spending and income and ensuring that there are no obstacles to the business world so that economic growth is maintained.

"We are currently making a team to accelerate development programs, one of which will have a bottleneck. I will receive complaints from all of them, businessmen, I will have a meeting one day from morning to evening. Put it down one by one case, it should be 6-7 cases a day. That will be very interesting," said Purbaya.

Previously, Purbaya emphasized that he would not change the budget deficit nor the debt ratio in the APBN, this was in accordance with the Draft Law (RUU) on State Finance which was being drafted.

As is known, Commission XI of the DPR RI has set the State Finance Bill as a priority in the 2025 National Legislation Program (Prolegnas).

"You definitely think I want to violate 3 percent. This doesn't exist," he told the media crew in a media briefing, Friday, September 19.

Purbaya ensured that in the preparation of the APBN, it would stick to the maximum deficit limit of 3 percent of Gross Domestic Product (GDP), in accordance with the provisions in Law Number 17 of 2003 concerning State Finance.

He added that if the fiscal policy taken had a positive impact on the economy, then economic growth would improve and tax revenue would increase.

With these conditions, according to Purbaya, there is no need for changes to the laws and regulations to increase the deficit limit or debt ratio which is currently set at 60 percent of GDP.

However, Purbaya considered that the provisions regarding the deficit limit and debt ratio in Law No. 17 of 2003 were less relevant, because these figures basically came from policies implemented in developed countries such as the United States and several European countries, which considered them an indicator of the ability of a country to pay debts.

"So what is actually seen is that the two countries are capable. So these figures don't affect just the initial indicator. The only thing that investors see is whether they are able to pay debts or want to pay debts," he said.

He also emphasized that Indonesia has never suffered a default and has sufficient ability to fulfill its obligations, so there is no need to worry about these restrictions excessively.

In comparison, Purbaya said that many countries in Europe often violate the deficit rules of a maximum of 3 percent and a debt ratio of 60 percent, even the United States has a debt ratio close to 100 percent of GDP with a deficit of about 6 percent.

He also questioned if these countries were allowed to exceed the limits, why Indonesia should be strictly restricted.

"If we were stuck, if that's why they are allowed, we can't," he said.