State Budget Allocation For Subsidies And Compensation To Be Right On Target

Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance (Kemenkeu) Febrio Kacaribu. (Photo: Doc. Antara)

JAKARTA - Head of the Fiscal Policy Agency of the Ministry of Finance (Kemenkeu) Febrio Kacaribu said that his party diverted the allocation of state revenue and expenditure budget funds (APBN) for energy subsidies and compensation of IDR 24.17 trillion to ensure that the distribution was right on target.

"As directed by the President, we are diverting some of the subsidies and compensation which are clearly not on target. We want justice, so the decision was taken to shift the allocation," said Febrio, quoted from Antara, Wednesday.

The budget reallocation was implemented into a number of major government programs, including the provision of direct cash assistance (BLT) and wage subsidy assistance for workers with incomes of IDR 3.5 million and under.

Initially, the government allocated IDR 152 trillion in subsidies and energy compensation in the APBN for the 2022 fiscal year.

However, said Febrio, the increase in international commodity prices, particularly food and energy prices, has made the assumptions set out in the APBN must be revised.

In addition, revisions need to be made after based on the evaluation results that the distribution of energy subsidies and compensation is not right on target with the finding that as many as 70 percent of recipients are from affluent groups.

"Then, we will recalculate and get directions from the leadership in May 2022 to maintain people's purchasing power, economic election momentum, especially consumption," he said.