Knowing What Mandatory Spending Is, Crucial Points Deleted In The Health Law

Ratification of the Health Bill into Law (Photo: Instagram/@puanmaharani)

YOGYAKARTA - The ratification of the Health Bill (RUU) to become Law (UU) at the plenary meeting of the DPR, was rejected by the Indonesian Doctors Association (IDI) and a number of Indonesian health professional organizations. This is because the Health Law removes a number of crucial points. One of them is the matter of mandatory spending in the health sector. So, what is mandatory spending?

What is Mandatory Spending?

Adapted from the official website of the Ministry of Finance, mandatory spending is state spending that has been regulated by law. The aim is to reduce the problem of regional social and economic inequality.

Mandatory spending types in the State Revenue and Expenditure Budget (APBN) Presidential Regulation (Perpres) Number 72 of 2020 are divided into five, including:

• The allocation of the education budget is 20 percent of the APBD according to the mandate of the 1945 Constitution article 31 paragraph (4) and Law no. 20 of 2003 concerning the National Education System article 49 paragraph (1).
• The allocation for the health budget is 5 percent of the APBN or equivalent to IDR 212.3 trillion, which provisions are in accordance with the provisions of Law Number 36 of 2009 concerning Health.
• The budget allocation for the General Allocation Fund (DAU) is at least 26 percent of net domestic revenue or the equivalent of IDR 384.4 trillion. This provision is in accordance with the provisions in Law Number 33 of 2004.
• The budget allocation for the Revenue Sharing Fund (DBH) for calculating this budget allocation in APBN-Perpres 72/2020 is IDR 86.4 trillion.
• The budget allocation for special autonomy is 2 percent each for the provinces of Aceh and Papua from the DAU in accordance with the Special Autonomy Law. The budget allocation in Perpres 72/2020 is IDR 20 trillion.

Mandatory spending provides certainty about the amount in the budgeting of several state expenditures. However, too much mandatory state spending has resulted in the capacity of the state budget and fiscal space becoming narrow and inflexible.

The Danger of Losing Mandatory Spending Points in the Health Law

PB IDI Chairperson Adib Khumaidi protested against the loss of mandatory spending points in the new Health Law.

According to Adib, the elimination of articles related to the mandatory minimum budget in the health sector of 5 percent means that the community does not get legal certainty in health financing.

"The community will be faced with efforts to develop health through funding sources outside the State Budget and Regional Budget," Adib said in a video statement, quoted by VOI, Thursday, July 13, 2023.

He added it is not impossible that the elimination of the mandatory spending article on health funding through privatization loans, commercialization, or other businesses in the health sector, will have a consequence on the health resilience of the Indonesian nation.

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