Gov’t to Reallocate Rp62.3 T of State Budget to Combat Covid-19
Date 21 Maret 2020
The Indonesian Government will reallocate Rp62.3 Trillion of the State Budget (APBN) to combat Covid-19, Minister of Finance Sri Mulyani has said on an online press statement, Friday (20/3).
The budget, according to the Minister, will be utilized to provide support in three areas, namely healthcare, people’s protection, and aid to the business sector.
“We are working closely with other ministries to look at various scenarios of how this Covid-19 will impact our economic outlook, especially in terms of economic growth, exchange rates, interest rates, inflation, oil prices; all of which will change,” Sri Mulyani said.
This, she said, will also impact the State Budget, both in terms of revenue as well as expenditure and financing.
“We will report to the President and we will continue to coordinate and communicate with the House of Representatives. After all, the State Budget is a document approved by them in the form of law,” the Minister said.
In order to be able to carry out various requests and in accordance with the current urgency in the health sector, the Minister of Finance conveyed that to date she has identified around Rp62.3 trillion of ministerial/institutional expenditure that will be reallocated. “This includes budget for official travel, non-operational goods expenditures, honorariums, blocked funds, and reserve output,” she said.
The reallocated budget, according to her, will be utilized to fund the procurement of medical devices and test kits. It also includes financing for hospital needs such as the preparation of Wisma Atlet (athlete village) for Covid-19 handling as well as hospital construction in Galangan Island.
Sri Mulyani will also ask ministries to provide fiscal space for health emergencies, people’s protection, and business world.
The acceleration of changes in spending by government agencies, she said, will be facilitated in less than two days so they can directly make adjustments.
The President, she stated, also asked that at least 50% of the Rp43 trillion government agencies budget be reallocated for the new priorities.
According to the Minister, as much as Rp56-59 trillion of Village Fund can be reallocated for Covid-19 handling.
The Minister expressed her confidence that the space in the State Budget in terms of total expenditure which reaches more than Rp2,500 trillion is quite adequate. “But, if there are a lot of changes, of course, we have to make immediate adjustments,” she said.
Sri Mulyani also went on to say that stimulus 1 with a value of 8.5 trillion will be reviewed. “We will review if it really helps hotels, restaurants or those affected,” she said.
On stimulus 2 amounting to Rp22.5 trillion, the Minister said, it will be very closely monitored. “Currently, I’m instructing the Director General of Taxes as well as Director General of Customs and Excise, especially Customs, to monitor the traffic of goods, in particular imports of raw material goods which are now urgently needed by domestic industries,” she stated.
The Government, she stated, will give priority to industries so that they can receive the imported raw goods and medical devices without disruption.
She stated that Minister of Education will reallocate the ministry’s budget to increase education assistance such as Indonesia Smart Card as well as intervention in the handling of Covid-19. She also said that Minister of Social Affairs calculated the target recipients of Family Hope Program and Staple Food Card to maximize the benefits given.
The Minister also included Rp10 trillion budget of Pre-Employment Card to help those affected by layoffs or temporary termination.
“So, in total, there are around Rp38 trillion, we will reallocate immediately to various activities, be it in the education sector, social safety net, and in the health sector,” she said.
In the health sector, Sri Mulyani stated, Rp3.1 – 6.1 trillion of budget are available for insurance and compensation to medical personnel who are currently facing the greatest risks.
“National Disaster Mitigation Agency (BNPB) as the Covid-19 mitigation task force has submitted a budget of Rp3.3 trillion which we have evaluated, this will be our priority so that they can take action,” she said.
According to the Minister, the President instructed that village funds for Covid-19 affected villages should be redesigned to help the villages to tackle Covid-19.
On MSMEs, the Minister stated that whether through Smallholder Business Credit (KUR), Ultra Micro (UMi) or other channels, the Ministry can help by providing interest assistance, suspending payment of interest, or relaxing instalments.
The Minister also asked regional governments to reprioritize their regional budgets, especially the Special Capital Region of Jakarta, Banten, West Java, Central Java, and East Java. (FID/EN)
Translated by: Fairuzzamani Inayatillah
Reviewed by: Mia M. Bonaedy