TEMPO Interactive, Jakarta: The government is preparing nine security steps in anticipating a potential additional 2008 State Budget deficit.
These steps are being taken in relation to continuing oil price increases.
Finance Minister Sri Mulyani guaranteed that the steps will not disturb the funds allocated for infrastructure and the poverty eradication programs.
“They’re still pro-growth and pro-poor, maintaining economic growth momentum with a constant budget,” she said during a press conference at her office last night (27/11).
If oil prices reach US$100 per barrel, Sri Mulyani explained, the potential additional deficit would be Rp54.7 trillion.
“That is if the government doesn’t do anything,” she said.
The potential deficit has been triggered by external factors, the oil price increases that contribute a Rp14.4 trillion deficit.
There are also internal factors, including additional fuel oil subsidies and electric sales growth, contributing Rp38.1 trillion.
The first securing step, said Sri Mulyani, was the use of the State Budget reserve fund amounting to Rp6 trillion, which can be used when base assumptions are changed.
The second, a saving of Rp11.7 trillion in the natural absorption of state expenditure, comprising savings of 10 percent of goods expenditure by Rp6.9 trillion and five percent capital expenditure by Rp4.8 trillion.
The third, using excess funds from oil and gas-producing regions amounting to Rp13.9 trillion.
The surplus from regional revenues will be placed in risk-free instruments.
"State bonds will be issued,” said Sri Mulyani.
The fourth, sharpening priority expenditure budgets of ministries and state institutions by Rp10.4 trillion.
The fifth, improving production parameters in terms of fuel oil and electricity subsidies.
The sixth step is efficiency by Pertamina and PLN (the State Electricity Company).
The seventh, optimizing taxes and dividends of state-owned enterprises, amounting to Rp9 trillion.
Eighth, relaxing the 2008 State Budget deficit.
The final step is maintaining momentum in terms of economic growth and macro-economy stability.
After the press conference, economist Chatib Basri said he considered that with these anticipatory steps, there need not be concern as regards any lowering of public purchasing power due to the oil price increases.
This is because, “Growth and inflation are sustained,” he explained.
HARUN MAHBUB
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