politics of public budgeting in indonesiakumoro.staff.ugm.ac.id/file_artikel/politics of public...
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PoliticsofBudgetinginIndonesia:AQuestforTransparencyandAccountability
Wahyudi Kumorotomo, PhD
Dept of Public Policy and ManagementGadjah Mada University
Indonesia2018
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TopicsofDiscussion
1. Indonesianbudgetprofiles
2. Reformsandthechangingbudgetpolitics
3. Fragmentedpower,fragmentedpolicy?
4. Transparency:forwhom?
5. Thequestforbudgetingaccountability.
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BudgetVolume(2018)
• ExpenditureOutlays:Rp 2,220.7trillion($US165.7bn).à 17.9%oftheGDPNote:GDP:Rp 12,406T
• Revenues:Rp 1,894.7trillion($US141.4bn)
• Adeficitof2.19%• Financing:Rp 325.9Tfrom:borrowings(foreign&domestic)andinvestments.
USbudget:$4,352bn;Australianbudget:$464.8bn
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EconomicGrowth(%)
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WhathasbeenchangedafterReformasi…
• Underamore”legislativeheavy”and”semi-parliamentary”system,theroleoflegislativesonbudgetismoresignificant.
• Decentralizedbudgeting:around30%ofpublicbudgetappropriationisdeterminedbylocalleaders.
• FromT-accounttoI-account;muchmoretransparentcomparedtotheNewOrderregime.
• Incremental;LawNo.17/2003stipulatesbudgetdeficitmaximum:3%ofdomesticrevenues.
• Challenge:expansionary?(Byconstitution:20%ofspendingmustgotoeducation;subsidiesonfuel; limitedfinancialdiscretion).
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FiscalDecentralization:APBNvs.APBD
SignificantportiontransferincreasedtoLocalGovernmentinthestateBudget
2000
2010
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TheBudgetCyclesPhase Period Substance
1 January Nationalpolicyandpriority
2 March Resource envelopes
3 May Indicativeplans&budgetceilingsforministries
4 July Technicalconsultationsamongministries
5 August Budget ceilingsappropriation
6 16thAugust PresidentialaddressonBudgetDraft(RAPBN)
7 November Legislativemeetingsonbudgetallotments
8 December Budget documentsratification
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TheRoleofBadan Anggaran(BudgetingBoard)
• Badan Anggaran (Banggar)hasbeenintrusiveinmakingstrategicprioritiesintheministries.
• ConstitutionSupremeCourt(Mahkamah Konstitusi)No.35/2013ruling:Banggar shouldnotgointodetailsofSatuan Tiga (budgetdetailing).
• Parliamentaryendorsementon“pork-barrel”budgetallocation:DanaPenyesuaian (contingencyfund),DanaTransfer,etc.
• ThepublicisgenerallyskepticalontheroleofBanggar invariousgovernmentstrategicprojects.
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CriticismsDuringSBYPresidency:“Negeri Auto-Pilot”
1. Thenationalbudget(APBN)contributeslittletopeople’sprosperity;onlyabout8,9%iscapitalspending(Radhi,2012)
2. Leakagesandcorruptionatbothsides;revenues andexpenditures.
3. National(APBN)andsub-nationalbudgets(APBD)arenotsynchronized.
4. Muchofthestatebudgetsareallocatedforoperationalexpenditures(salaries,routines).
5. Developmentprioritiesarenottouchedonpeople’sbasicneeds.
6. Manyallocatedfundsaresimplyundisbursed,toomuchmisstargeted programs,accountabilityissues.
3
www.chappyhakim.com
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Facts:
Ø ICW: Rp 300 trillion of potential taxes are leaked.
Ø Trials on taxation (2002-2009): 22,105 cases; tax payers won 61% of the trials. What does this mean?
Ø In the last 10 years, tax coverage means accounted only 65%, In 2011 the tax effort was 13.3% of GDP (the lowest among ASEAN five).
Gayus Bahasyim Dhana
Tax Mafia
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PoliticalandBureaucraticCorruption
11
Ø The DPR members frequently ask for fee to private companies that would be given a contract.
Ø Governors and district heads uses a portion of the APBD for personal interest with a collaboration with the private “partners”.
Ø The DPRD members ask for kickbacks for any projects approved, ask for “success fee” to the candidates of governors, bupatis and mayors.
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GlobalBudgetTransparencyIndex
89
7774
6764
48
40
15
10
10
20
30
40
50
60
70
80
90
100
NewZealand
UnitedStates
Australia
Philippines
Indonesia
India
TimorLeste
Vietnam
SaudiArabia
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LocalBudgetParticipatoryChannels
Source:Putra&Farhan,2011
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ConcludingRemarks• Althoughtransparencyhasbeenrelativelyimproved,themainissueis
budgetingaccountability.(Openbudgetsurvey2017:transparency-64;oversight-85;publicparticipation-22).
• Aheadstartinperformancebudgeting,butvariousfactorsarehinderingitsfullimplementation.(LackofenforcementonGovernmentRegulation90/2010;NocommonunderstandingsbetweenMoF andtheBappenas;Incrementalparadigminbudgeting).
• Democraticgovernancehasresultedinpublicscrutinyinbudgetmisappropriation.However,morepublicengagementonbudgetingprocessisneededforimprovingaccountabilityandpreventingvariouspatternsofmisappropriationinthefuture.
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THANK YOU