PKS Faction DPR: Indonesia's 2021 State Budget Is Financed By Debt, Big Pegs Than Piles

Illustrated. (Irfan Meidianto / VOI)

JAKARTA - Member of the DPR Budget Board from the PKS Faction, Hermanto, said that the 2021 State Budget deficit of 5.7 percent of Gross Domestic Product (GDP) is a sign that the large state budget is pegged from the pole. State spending is greater than state income.

"Simply put, the 2021 State Budget is flooded with debt," said Hermanto in a written statement, quoted on Thursday, October 1.

The DPR Plenary Meeting on Wednesday, September 30, yesterday approved the 2021 State Budget with more than IDR 1,743 trillion in revenue, more IDR 2,750 trillion expenditure and a IDR 1,006.4 trillion deficit.

"Even though it was approved, there are many critical notes that the government should pay attention to," said Hermanto.

According to him, the deficit of 5.7 percent indicates how inefficient the state budget is where the large expenditure side is not supported by adequate income.

"Apart from that, the issue of the State Budget is actually not just determining a deficit or a surplus. The problem is, is the State Budget able to overcome the COVID-19 pandemic, restore the economy, open jobs, boost economic growth and stimulate tax revenue?" He asked.

The state budget, he continued, has minimal support for the people. Budget proportionality for the urban and rural poor is smaller than for project financing.

"The indication is that the government is not paying enough attention in overcoming the scarcity of fertilizers, providing quality seeds, improving irrigation and MSMEs," he said.

According to Hermanto, the state capital participation (PMN) budget allocation for state-owned enterprises with losses should be limited. Before being given a PMN, the SOEs that suffer losses must conduct efficiency.

The 2021 APBN was prepared in 2020 at a time when Indonesia was facing a contraction in economic growth. In the second quarter, Indonesia's economic performance had recorded a contraction of up to minus 5.23 percent. The third quarter and fourth quarter are also predicted to experience negative growth.

"Under these conditions, it is very important for the government to take into account the impact of the cycle and transmission from 2020 to 2021," said Hermanto.

Hermanto asked the government to consistently manage the budget, which in outline was for 2 things, namely the success in overcoming the COVID-19 pandemic and economic recovery.

"This needs to be reminded because currently there is no synergy and consolidation between the central government and local governments in preventing and overcoming the spread of the COVID-19 outbreak, as well as efforts to recover the economy," he said.

Minister of Finance Sri Mulyani previously said that the increase in the deficit would be financed by additional issuance of government securities (SBN) worth IDR 34.9 trillion, use of excess budget balance (SAL) of IDR 15.8 trillion and additional reserves for education financing of IDR 15.4 trillion.

The state treasurer said the change in deficit was due to a decrease in state revenues from Rp1,776.4 trillion to Rp1,743.6 trillion or a decrease of Rp.32.7 trillion.