Sri Mulyani Gets Straight to Work, Tips Spending Cuts for Ministries and Regions

Jakarta Globe, Tabita Diela, August 04, 2016

Finance Minister Sri Mulyani Indrawati plans to cut ministries and regions
spending in 2016 state budget in a bid to regain credibility on government fiscal
policy after taxation revenue fall far short its target. (Photo courtesy of World Bank/
Deborah Campos)

Jakarta. Finance Minister Sri Mulyani Indrawati plans to cut ministries and regional spending in the 2016 state budget in a bid to regain credibility on fiscal policy after taxation revenue fell far short of its target.

Sri Mulyani estimated taxation revenue will fall short of around Rp 219 trillion ($16.6 billion) from its Rp 1,539.2 trillion target in the 2016 revised state budget. That increases the risk of the government exceeding the legal deficit limit of 3 percent of gross domestic product.

"That's why ... we need to do some adjustment on the spending side so our deficit will be kept at a level that won't arouse a loss of trust in the state budget," she said on Wednesday (03/08).

The minister told President Joko "Jokowi" Widodo and other ministers at a plenary session that she will cut Rp 65 trillion from the ministries' budget and Rp 68.8 trillion in regional transfer funds.

According to the 2016 revised state budget, the allocation for ministries and government’s agency is Rp 768 trillion, which is 6 percent higher than the Rp 724 trillion spent a year ago. Transfer funds to regions totaled Rp 729 trillion, 17 percent higher compared to Rp 623 trillion last year.

The plan has already received a blessing from Jokowi, according to a statement from the Cabinet Secretariat office.

"[The plan] is fully approved by the president and the vice president. The decision is binding to all ministries and other government agencies,"  Cabinet Secretary Pramono Anung said in a statement.