Supporting Energy Subsidy Reduction, Head Of Banggar DPR: Time To Be Reallocated For The Needs Of The Poor

Chairman of the Banggar DPR, Said Abdullah while talking with Minister of Finance Sri Mulyani and Minister of National Development Planning/Head of Bappenas Suharso Monoarfa. (Photo: Doc. Antara)

JAKARTA - Chairman of the Budget Agency for the House of Representatives (DPR) Said Abdullah said targeted subsidies would reduce the burden of subsidies in the APBN this year by IDR 502 trillion, which tends to be enjoyed by the rich.

Thus, it is time to support the reduction of energy subsidies and reallocate them into the budget needed by the poor, such as direct cash assistance (BLT), assistance for labor wages, productive social assistance for MSMEs, health and education facilities.

"This step is so that the public will feel the state budget funds, meaning that subsidies are transferred from the rich to the poor who really need it. This policy can also reduce inflationary pressure which is very vulnerable to poor households," said Said in an official statement quoted by Antara, Friday 26 August.

He revealed that ideally, funds of the 2022 energy subsidy could be used for development in various sectors needed by the lower class and productive activities, such as education, health, energy infrastructure, and others. In fact, it can be used to build new toll roads along 3,501 km with an estimated investment of Rp. 142.8 billion per kilometer (km).

The energy subsidy budget can also be used for the construction budget of 227,886 elementary schools (SD), it is estimated that an investment of IDR 2.19 billion per elementary school is required, 3,333 medium-scale hospitals (RS) with an investment of IDR 150 billion per hospital, and 41,666 new health centers with Rp 12 billion per health center.

To encourage production goods, especially by MSMEs that support the people's daily consumption goods, Said continued, the transfer of fuel subsidy funds and compensation can be focused on fuel subsidies for MSME actors, which can technically be integrated with the overall social protection program.

In addition, the reallocation of the energy subsidy budget can be directed to strengthen the food security program because Indonesia is still facing a high prevalence index of food insecurity. Moreover, Indonesia is still only self-sufficient in rice, while other food commodities such as meat, vegetables, sugar, soybeans, and others are still imported.

"The issue of food independence is very important, because with global food dependence, it is prone to face various economic risks, both those accepted by the people and our fiscal," he said.

On the other hand, the DPR member said that the relocation of the energy subsidy and compensation budget could be focused on strengthening the energy conversion program which is very important to reduce dependence on imported petroleum supplies.

Conversion of energy policy to lead to energy independence must be a priority so that the occurrence of swelling of the subsidy budget and fuel compensation does not continue to be repeated in the future.

"Don't let us fall into the same hole, even though we know the location of the hole," Said said.