Integrate Subsidy Expenditure, Social Assistance, and Village Budget, President Jokowi Says
Date 21 September 2016
Subsidy expenditure based on the 2016 Revised State Budget (APBN-P) amounted to Rp177.8 trillion or about 13.6 percent of the total Central Government expenditure. From the amount, Rp94.4 trillion or 53 percent is allocated to energy sector, while the remaining Rp83.4 trillion or 47 percent of the total amount is allocated to non-energy sector. Furthermore, the Government also allocated Rp59 trillion for expenditure on social assistance, and Rp47 trillion for Village Budget, President Joko Jokowi Widodo said.
The President asserted that the Government must ensure the subsidy and social assistance expenditure allocated in the 2016 APBN-P can reduce poverty and inequality more effectively.
Ensuring the subsidy and social assistance expenditure is well-targeted, comprehensive improvement be it on the planning, financing, or distribution system must be conducted, President Jokowi said in his introductory remarks in a limited meeting on the subsidy budgeting in the State Budget on Wednesday (21/9), at the Presidential Office, Jakarta.
President Jokowi said that in 2015, the Govenment decided to shift fuel subsidy to a more targeted subsidy expenditure. Meanwhile, in 2016, subsidy allocated to credit interest program increased from Rp1.9 trillion in 2015 to Rp15.8 trillion.
According to the President, subsidy on credit interest program including Smallholder Business Credit (KUR) and Low-Income Housing showed that the subsidy can be shifted to people who need it the most and can also support Micro, Small, and Medium Enterprises (MSMEs).
To make this effort more effective, I asked subsidy, social assistance, village budget, expenditures of minitries/institutions, and regional transfer budget to be planned more compehensive, integrated, and not overlapping, the President added.
According to the President, social assistance and individuals, families, household, and business-based subsidies can be combined with Village Budget or other regional and sectoral budgets.
The spirit of this subsidy and social assistance policies is to make communities stronger, more independent, have more power, and do not cause dependence. It needs to be underlined. It should not make people dependent, the President said.
Therefore, President Jokowi asserted that in granting subsidy and social assistence, we also need to take into account the aspects of Indonesias sustainability fiscal.
I also stressed that the accuracy of the target should be a major concern, so improvements in database of beneficiary, and single identity must be manifested immediately. This is very important, President Jokowi firmly stated.
Relating subsidy and social assistance, President Jokowi mentioned that in the previous limited meeting held on April 2016, the President instructed all related parties to distribute social assistance in form of non-cash through the banking system and it is integrated in one card.
Distribution system must reached the beneficiary, President Jokowi firmly said adding that the Government also need to improve the quality of goods and services to the people, including health services, education, rice seeds and fertilizer assistance, etc.
Coordinating Minister for Political, Legal, and Security Affairs Wiranto, Coordinating Minister for the Economy Darmin Nasution, Coordinating Minister for Human Development and Culture Puan Maharani, Coordinating Minister for Maritime Affairs Luhut B. Pandjaitan, Minister of State Secretary Pratikno, Cabinet Secretary Pramono Anung, Minister of Communication and Informatics Rudiantara, Minister of Finance Sri Mulyani Indrawati, Presidential Chief of Staff Teten Masduki, Minister of State-Owned Enterprises Rini Soemarno, Minister of Social Affairs Khofifah Indar Parawansa, Minister of Agriculture Amran Sulaiman, Minister of Health Nila F. Moloek, and Minister of Village, Underdeveloped Regions and Transmigration Eko Sanjoyo also attended the limited meeting.