List of Contents
LIST OF CONTENTS
List of Contents .................................................................................................
1
List of Tables ....................................................................................................
1v
List of Graphs ...................................................................................................
v111
List of Boxes .......................................................................................................
xv1
List of Charts......................................................................................................
xv11
CHAPTER 1
INTRODUCTION
1.1
General ..............................................................................................
1-1
1.2
Basic Assumptions for the Macroeconomics 2013 ..............................
1-3
1.3
Fiscal Policy Highligths.....................................................................
1-5
1.4
APBN 2013 Posture Summaries.......................................................
1-7
1.5
Brief Description of Chapters ...........................................................
1-8
CHAPTER 2
BASIC
ASSUMPTIONS
MACROECONOMICS
OF
2.1
General .......................................................................................
2-1
2.2
The Economic Trend 2007-2011 and Realization Projection 2012
2-2
2.2.1
Global and Regional Economy .......................................................
2-2
2.2.2
National Economy ................................................................................
2-3
2.2.3
Economic Projection in 2012............................................................
2-11
2.2.3.1 Global and Regional Economy .......................................................
2-11
2.2.3.2 National Economy ...........................................................................
2-14
2.3
Challenges and Targets of Macroeconomic Policies in 2013 ..........
2-24
2.3.1
Global and Regional Economic Challenges ....................................
2-24
2.3.2
Domestic Economic Challenges ......................................................
2-25
2.3.3
Macroeconomic Policy Targets in 2013 ..........................................
2-26
2.3.3.1 Economic Growth ............................................................................
2-26
2.3.3.2 Rupiah Exchange Rate .....................................................................
2-33
2.3.3.3 Inflation ............................................................................................
2-33
List of Contents
Page
2.3.3.4 3-Month SPN Rate............................................................................
2.3.3.5 Indonesian Crude Oil Price (ICP) ......................................................
2.3.3.6 Oil and Gas Lifting ...........................................................................
CHAPTER 3
2-34
2-34
REVENUES AND GRANTS
3.1
General .................................................................................................
3.2
Revenues Trend in 2007-2011 and the Estimated Revenue in 2012
3.2.1
Domestic Revenue ............................................................................
3.2.1.1
Tax Revenues ....................................................................................
3.3
Challenges and Opportunities of Goverment Revenue Policies .......
3.4
Target Goverment Revenues in 2012 ...............................................
3.4.1
Domestic Revenue .............................................................................
3.4.2
Grant Proceeds .................................................................................
CHAPTER 4
2-34
3-1
3-1
3-2
3-3
3-24
3-25
3-26
3-36
CENTRAL GOVERNMENT EXPENDITURE
BUDGET
4.1
General ...............................................................................................
4-1
4.2
The Trends of Policy and Implementation of Budget Allocation for
Central Goverment Expenditures, 2007-2012 ...............................
4-4
The Trend of Central Goverment Expenditure Budget Allocation
by Functions .....................................................................................
4-6
The Trend of Budget Implementation of Central Goverment
Expenditures by Organizations ........................................................
4-18
The Trends of Budget Implementation for Central Goverment
Expenditures by Types .....................................................................
4-34
4.2.4
The Highlights of Goverment Work Plan 2013 ..............................
4-49
4.4
Policies and Central Goverment Expenditure Budget in APBN 2013
4-58
4.4.1
Budget of Central Goverment Expenditure by Functions..............
4-60
4.4.2
Budget of Central Goverment Expenditure by Organizations.......
4-69
4.4.2.1 Ministries/ Agencies Budget Section (BA K/L) ................................
4-69
4.4.3
4-85
4.2.1
4.2.2
4.2.3
Central Goverment Expenditure Budget by Types...........................
ii
List of Contents
Page
CHAPTER 5
FISCAL DECENTRALIZATION POLICY
5.1
General ..............................................................................................
5-1
5.2
Fiscal Decentralization Implementation Trend 2007-2012 ............
5-3
5.2.1
The Implementation of Transfer to Regions Policy .........................
5-3
5.2.2
The Implementation of Transfer to Regions Budget ......................
5-6
5.2.3
The Implementation of Regional Taxes and Service Charges ........
5-11
5.2.3.1 Supervision and Revocation .................................................................
5-12
5.2.3.2 The Transfer of BPHTB and PBB-P2 into Regional Taxes .............
5-13
5.2.3.2.1 The Implementation of BPHTB Transfer ........................................
5-14
5.2.3.2.2The Implementation of PBB-P2 Transfer ........................................
5-15
5.2.4
The Implementation of Loans and Grants to Regions ...................
5-17
5.2.4.1 Regional Loans ..................................................................................
5-17
5.2.4.2 Grants to Regions .............................................................................
5-18
5.3
Problems and Challenges around Fiscal Decentralization
Implementation.................................................................................
5-20
5.3.1
APBD Implementation .....................................................................
5-20
5.3.2
Enchanced Quality in Regional Financial Management ................
5-22
5.3.3
Implications to Regional Economic Development ..........................
5-23
5.4
Budget of Transfer to Region in 2013 ..............................................
5-28
5.4.1
Budget Policy for Transfer to Regions in APBN 2013 ....................
5-28
5.4.1.1 Fiscal Balance ...................................................................................
5-28
5.4.1.1.1 Revenue Sharing ..............................................................................
5-28
5.4.1.12 General Allocation Fund (DAU) ......................................................
5-31
5.4.1.1.3 Special Allocation Fund (DAK) ........................................................
5-32
5.4.1.2 Special Autonomy and Adjustment Fund .......................................
5-40
5.4.1.2.1 Special Autonomy Fund ..................................................................
5-40
5.4.1.2.2Adjustment Fund .............................................................................
5-40
5.4.2
5-43
Grant to Regions Policy ...................................................................
iii
Page
CHAPTER 6
BUDGET FINANCING AND FISCAL
RISK
6.1
General ...............................................................................................
6-1
6.2
Budget Deficit and Financing Trend from 2007-2012 .....................
6-2
6.2.1
Budget Deficit .....................................................................................
6-2
6.2.2
Budget Financing ..............................................................................
6-2
6.2.2.1 Non-Loan Financing ........................................................................
6-4
6.2.2.1.1 Domestic Banks ................................................................................
6-5
6.2.2.1.2 Domestic Non-Banks .......................................................................
6-5
6.2.2.2 Loan Based Financing ......................................................................
6-14
6.2.2.2.1 Goverment Bond (SBN) ...................................................................
6-15
6.2.2.2.2Foreign Loans ...................................................................................
6-19
6.2.2.2.3Domestic Loan ..................................................................................
6-21
6.2.2.3 The Trend of Goverment Debt Portofolio ........................................
6-22
6.3
Budget Financing Plan for 2013 ......................................................
6-23
6.3.1
Non-Loan Financing ........................................................................
6-24
6.3.1.1
Domestic Banking ............................................................................
6-25
6.3.1.1.1 The Installment of SLA Payment ....................................................
6-25
6.3.1.1.2 Budget Surplus ..................................................................................
6-25
6.3.1.2 Domestic Non-Banking ....................................................................
6-26
6.3.1.2.1 Asset Management Proceeds (HPA) ................................................
6-26
6.3.1.2.2 Goverment Investment Fund ..........................................................
6-26
6.3.1.2.3 National Education Development Fund ..........................................
6-35
6.3.1.2.4Guarantee Obligations .....................................................................
6-35
6.3.1.2.5 Financing Reserve for the Takeover of PT Inalum ........................
6-36
6.3.2
Loan Financing .................................................................................
6-37
6.3.2.1 General Debt Management Strategies .............................................
6-37
6.3.2.2 Economic Condition and FinancialMarket Projection in 2013 .......
6-38
iv
Page
6.3.2.3 The Latest Issues of Debt Management ..........................................
6-39
6.3.2.3.1 Loan Financing Flexibility ...............................................................
6-39
6.3.2.3.2The Roles of Standby Loans in Securing APBN Financing ............
6-40
6.3.2.3.3 Maintaining and Improving Investment Grade Status .................
6-41
6.3.2.4 Loan Financing Policy in 2013 ........................................................
6-43
6.3.2.4.1Goverment Bond (SBN) (Net) .........................................................
6-45
6.3.2.4.2Foreign Loans (Net) ..........................................................................
6-47
6.3.2.4.3Domestic Loans (Net) .......................................................................
6-49
6.4
Fiscal Risk .........................................................................................
6-51
6.4.1
Macroeconomics Risks .....................................................................
6-51
6.4.1.1 APBN 2013 Deficit Sensitivity to Macroeconomic Assumption
Changes .............................................................................................
6-51
6.4.1.2 Fiskal Risk Sensitivity to SOEs againts the Changes of
Macroeconomic Variable ..................................................................
6-53
6.4.2
Central Goverment’s Debt Risks ......................................................
6-58
6.4.3
Conigency Obligation of the Central Goverment ...........................
6-61
6.4.3.1 Goverment’s Supports and/or Guanrantees to Infrastructure
Development Projects........................................................................
6-61
6.4.3.1.1 The 10,000 MW Power Generation Development Acceleration
Project Stage I ....................................................................................
6-62
6.4.3.1.2The 10,000 MW Power Generation Development Acceleration
Project stage II ..................................................................................
6-64
6.4.3.1.3Toll Road Development Project ........................................................
6-64
6.4.3.1.4Water Supply Provision Acceleration ...............................................
6-64
6.4.3.1.5Public Private Partnership Project Through Infrastructure
Guarantee Agency ............................................................................
6-65
6.4.3.1.6Goverment Support for Model PPP Project of Soekarno Hatta
Airport Railways Track Construction ..............................................
v
6-66
Page
6.4.3.1.7 The Provision of Infrastructure Guarantee Facility through
PT Penjaminan Infrastructure Indonesia (Persero) ......................
6-66
6.4.3.2 Social Security ..................................................................................
6- 68
6.4.3.3 Obligation of Maintaining Minimum Capital of Certain
Finance Institutions .........................................................................
6-69
6.4.3.4 Legal Claims to the Goverment ......................................................
6-71
6.4.3.5 Membership in International Financial Organizations
Institutions (LKI) and Others .........................................................
6-72
6.4.3.6 Natural Disaster ...............................................................................
6-72
6.4.4
6-74
Mandatory Spending .......................................................................
CHAPTER 7 APBN MEDIUM-TERM BUDGET PROJECTION
7.1
General ..............................................................................................
7-1
7.2
Medium-Term APBN Projection .....................................................
7-2
7.2.1
Basic Macroeconomics .....................................................................
7-4
7.2.2
Goverment Revenue Projection .......................................................
7-8
7.2.3
Goverment Expenditure Projection .................................................
7-11
7.2.4
Budget Financing Projection ............................................................
7-14
7.3
Medium-Term Expenditure .............................................................
7-15
vi
List of Tables
LIST OF TABLES
Page
Table 2.1
GDP Distribution and Contribution to Economic Growth,
2010-2011 .............................................................................
2-4
2-6
Table 2.2
Economic Growth by Sectors...............................................
Table 2.3
The Economic Growths of Countries Around The World
2011-2012 .............................................................................
2-12
Table 2.4
Global Commodity Price Fluctuation .................................
2-14
Table 2.5
Balance of Payment, 2007-2011 .........................................
2-20
Table 2.6
Economic Growth by Use, 2012-2013 ..................................
2-27
Table 2.7
Economic Growth by Sectors, 2012–2013 ..........................
2-32
Table 3.1
Goverment Revenue Trend, 2007-2012 ..............................
3-3
Table 3.2
Oil and Gas PPh Revenue Trend, 2007-2012 .....................
3-7
Table 3.3
Oil and Gas PPh Revenue Trend, 2007-2012 ........................
3-8
Table 3.4
PPN and PPnBM Revenue Trend ........................................
3-9
Table 3.5
PBB and BPHTB Revenue Trend, 2007-2012 .....................
3-10
Table 3.6
Excise Revenue Realization Trend, 2007-2012...................
3-10
Table 3.7
Tabacco Product Excise Tariff Policy Trend, 2007-2012 ......
3-11
Table 3.8
Other Tax Revenue, 2007-2012 ...........................................
3-12
Table 3.9
Export Tax Tariff for Coconut Oil, CPO and The Derivative
Products ................................................................................
3-14
Table 3.10
PNBP Trend For The Largest K/L, 2007-2012 ......................
3-20
Table 3.11
Goverment Revenue, 2012-2013 .........................................
3-25
Table 4.1
Central Goverment Expenditure by Function,2007-2012 ..
4-6
Table 4.2
Central Goverment Expenditure Trend, 2007-2012...........
4-35
Table 4.3
Personel Expenditure Policy Trend, 2007-2012 ..................
4-36
Table 4.4
Loan Interest Expenditure Trend, 2007-2012 ....................
4-38
Table 4.5
The Trend of Subsidies for Certain Fuel and 3-kg Gas, 20072012 .......................................................................................
4-22
Table 4.6
The Trend of Retail Price of Subsidy Price, 2006-2012 .......
4-42
Table 4.7
Electricity Subsidy Trend, 2007-2012 .................................
vii
4-42
List of Tables
Table 4.8
Subsidy Trend, 2007-2012 ....................................................
Page
4-45
Table 4.9
Priority Programs of Social aid Expenditure, 2007-2012 .......
4-48
Table 4.10
Some Strategic Development Targets 2013 ...........................
4-57
Table 4.11
Central Goverment Expenditure By Function, 2012-2013....
4-61
Table 4.12
Expenditure Budget For Ministries/ Agencies, 2012-2013 .....
4-82
Table 4.13
Central Goverment Expenditure Trend, 2012-2013 ...........
4-85
Table 4.14
Loan Interst Payment, 2012-2013 .......................................
4-91
Table 4.15
Subsidy For Certain Fuel and 3-KG Gas ..............................
4-93
Table 4.16
Electricity Subsidy,2012-2013 ..............................................
4-94
Table 4. 17
Food Subsidy, 2012-2013 ......................................................
4-94
Table 4.18
Fertilizer Subsidy, 2012-2013 ...............................................
Table 4.19
Seed Subsidy, 2012-2013 .......................................................
Table 4.20
PSO Subsidy,2012-2013 ........................................................
Table 4.21
Program Credit Interst Subsidy, 2012-2013 ........................
Table 4.22
Tax Subsidy (DTP), 2012-2013 .............................................
4-96
4-97
Table 5.1
Revisions To Adjustment Fund, 2007-2012 ........................
5-5
Table 5.2
Transfer to Regions Trend, 2007-2012 ................................
5-6
Table 5.3
The Readiness of Regions in Collecting BPHTB .......................
5-14
Table 5.4
The Readiness of Regions in Collecting PBB-P2 .................
5-17
Table 5.5
Grants to Regions, 2010-2012 ...................................................
5-19
Table 5.6
Provincial APBD by Type of Expenditure,2007-2012 .........
5-21
Table 5.7
District/ City APBD by Type of Expenditure, 2007-2012........
5-21
Table 5.8
Provincial APBD Ratio, 2007-2012 ......................................
Table 5.9
District/ City APBD by Type of Expenditure, 2007-2012........
Table 5.10
Investment Realization Trend in Indonesia, 2007-2012 ....
Table 5.11
Williamson Index for GRDP, 2007-2012 ...........................
Table 5.12
APBD per Capita to People Welfare Ratio, 2009-2011 .......
5-26
Table 5.13
Annual Inflation Rate in 66 Cities, 2008-2011 ...................
5-27
Table 5.14
Transfer to Regions,2012-2013 .............................................
5-44
viii
4-95
4-95
4-96
5-22
5-22
5-24
5-25
List of Tables
Page
Table 6.1
Budget Deficit and Financing Trend, 2007-2012 .................
6-4
Table 6.2
Non-Loan Based Financing Trend, 2007-2012 ..................
6-4
Table 6.3
PT PPA Managed Asset Trend, 2007-2012 .........................
6-18
Table 6.4
The Goverment Security Fund Allocation Trend, 2008-2012
6-13
Table 6.5
Loan Based Financing Trend, 2007-2012 ...........................
6-14
Table 6.6
SBN Issuance Realization Trend, 2007-2012 .....................
6-18
Table 6.7
Tradble SBN Ownership Trend, 2007-2012 ........................
6-18
Table 6.8
Outstanding Goverment Loan Trend by Currency, 20072012 ......................................................................................
6-22
Table 6.9
Outstanding Government Loan Trend By Instruments,
2007-2012....................................
6-23
Table 6.10
Budget Financing, 2012-2013..................................................
6-23
Table 6.11
Non-Loan Based Financing, 2012-2013..................................
Table 6.12
Government Investment Fund, 2012-2013............................
Table 6.13
PMN To SOE, 2012-2013..........................................................
Table 6.14
PMN To Organization/LKI, 2012-2013..................................
Table 6.15
Other PMN.............................................................................
Table 6.16
Revolving Fund.........................................................................
Table 6.17
Government Guarantee Obligation, 2012-2013.................
Table 6.18
Standby Loan Plan....................................................................
Table 6.19
Efforts To Promote Credit Rating.............................................
Table 6.20
Loan Financing, 2012-2013......................................................
Table 6.21
Subsidiary Loan Agreement, 2012-2013..............................
Table 6.22
Macroeconomic Assumption And Realization
Trend, 2007-2012.................................................................
Table 6.23
Table 6.24
6-25
6-26
6-27
6-29
6-32
6-33
6-36
6-41
6-43
6-44
6-49
6-52
Deficit Sensitivity of APBN 2013 To The Changing
Macroeconomic Assumptions ...................................
6-53
Aggregate SOE Fiscal Risk Scenario Analysis Fiscal
Transaction Position With SOE, 2013-2015........................
6-56
ix
List of Tables
Page
Table 6.25
Stress Test For The Changing Exchange Rate, Oil Price, And Interest Rate
And Economic Growth To SOE Fiscal Risks, 2013-2015.................................
6-57
Table 6.26
Loan Portfolio Risk Indicator Trend, 2007-2012.............................................
6-59
Table 6.27
Financing Acquired For Power Generation, 2007-2012..................................
Table 6.28
List Of Secured Projects.....................................................................................
Table 6.29
State Capital Participation And Contribution To Internatioanl
Organizations/Agencies And Other Institusion in 2013.................................
Table 7.1
APBN 2013 and Baseline Estimates For 2014-2016.....................................
Table 7.2
Mid-term Basic Macroeconomic Assumption, 2014-2016.............................
Table 7.3
(Baseline) K/L Budget Allocation List, 2014-2016...........................................
7-20
Table 7.4
Baseline Budget Allocation List, 2014-2016.....................................................
7-21
x
6-63
6-64
6-72
7-4
7-7
List of Graphs
LIST OF GRAPHICS
Page
Graph 2.1
European Economic Growth , 2007-2011.............................
2-2
Graph 2.2
Global Trade Volume Growth Trend, 2007-2011...................
2-2
Graph 2.3
Indonesian Economic Growth, 2007-2011............................
2.-3
Graph 2.4
Economic Growth by Expenditure, 2007-2011......................
2-3
Graph 2.5
Rupiah Exchange Rate Tremd To USD, 2007-2011..............
2-7
Graph 2.6
Inflation Trend, 2007-2011.............
2-8
Graph 2.7
3-Month SPN Rate Trend 2011.....................
2-9
Graph 2.8
International Crude Oil Production, Consumption And
Price, 2007-2011........................................................................
2-10
Indonesia Oil Lifting, 2007-2011.............................................
2-11
Graph 2.9
Grap2.10
Purchasing......................................................................
2-13
Graph 2.11
International Trade Indicator..............................
Graph 2.12
Global Trade Volume Trend......................................
Graph 2.13
Export-Import Growths Of The Developed And Developed
And Developing Countries.......................................
Graph 2.14
Commmodity Price Index And Global Infkation Trend
Graph 2.15
Rupiah Exchange Rate Trend To USD, 2012
2-14
2-20
Graph 2.16
Inflation Trend, 2011-2012
2-21
Graph 2.17
Inflation Trend By Components, 2011-2012
2-21
Graph 2.18
Global Crude Oil, Production, Consumption And Price
Trend, 2012
2-13
2-13
Graph 2.19
Indonesian Oil Lifting Trend 2012.......................
2-23
2-23
Graph 2.20
Economic Growt And Global Trade Volume Trend
2-20
Graph 2.21
Indoneseian Econoomic Growth, 2010-2013
2-27
Graph 3.1
TaxRevenue Trend, 2007-2012
3-3
Graph 3.2
Deomestic Tax Revenue Trend, 2007-2012..................
Graph 3.3
Average Contribution Of Demestic Tax Revenue, 20062011
Graph 3.4
VAT And PPnBM Revenue Trend, 2007-2012
xi
2-6
3-6
3-8
List of Graphs
Page
Graph 3.5
Import Tax And Dutiable Import Revenue Trend 2007-2012
3-13
Graph 3.6
International CPO Price And Export Tax Trends, 2007-2012
3-13
Graph 3.7
Oil And Gas Revenue Trend, 2007-2012
Graph 3.8
Non Oil And Gas Revenue, 2007-2012
Graph 3.9
SOE Accounting Performance 2007-2012
3-17
3-17
3-18
Graph 3.10
SOE Contribution To APBN
Graph 3.11
Non Oil And Gas Revenue, 2007-2011
Graph 3.12
Other Non Tax Revenue Trend, 2007-2012
Graph 3.13
PNBP Trend Og Kemenkominfo, 2007-2012
Graph 3.14
PNBP Trend Of Kemendikbud, 2007-2012
Graph 3.15
PNBP Of Trend Kemenkes, 2007-2012
Graph 3.16
PNBP Trend Of Polri, 2007-2012
Graph 3.17
PNBP Trend Of Kemenkumham, 2007-2012
Graph 3.18
PNBP Trend Of BPN, 2007-2012
3-23
Graph 3.19
PNBP Trend Of Kemenhub, 2007-2012
3-23
Graph 3.20
BLU Revenue Trend, 2007-2012
3-23
Graph 3.21
Grant Revenue Trend, 2007-2012
3-24
Graph 3.22
PPh Non Oeil ANd Gas Revenue , 2007-2012
3-28
Graph 3.23
VAT And LST Revenue, 2012-2013
Graph 3.24
Land And Building Tax Revenue, 2012-2013
3-29
3-29
Graph 3.25
Excise Revenue, 2012-2013
3-30
Graph 3.26
Other Tax Revenue, 2012-2013
3-30
Graph 3.27
Import Tax Revenue, 2012-2013
3-30
Graph 3.28
Export Tax Revenue, 2012-2013
3-30
Graph 3.29
Oil And Gas PNBP Revenue, 2012-2013
3-31
Graph 3.30
Non Oil And Gas Revenue, 2012-2013
3-31
Graph 3.31
Government Portion From SOE Profits, 2012-2013
3-33
Graph 3.32
Non Income Tax Of Kemenkominfo, 2012-2013
3-33
Graph 3.33
PNBP Of Kemendikbud, 2012-2013
xii
3-19
3-19
3-20
3-21
3-21
3-21
3-22
3-22
3-34II-31
List of Graphs
Page
Graph 3.34
PNBP Of Kemenkes, 2012-2013
3-34
Graph 3.35
PNBP Of Polri, 2012-2013
3-34
Graph 3.36
Non Income Tax Of Kemenkumham, 2012-2013
3-35
Graph 3.37
PNBP Of BPN, 2012-2013
3-35
Graph 3.38
Non Income Tax Of Kemenhub, 2012-2013
3-36
Graph 3.39
General Services Agency Revenue, 2012-2013
3-36
Graph 3.40
Grant Revenue, 2012-2013
3-36
Graph 4.1
Central Government Expenditure Trend By Function,
2007-2012
4-6
Graph 4.2
Public Service Function Expenditure, 2007-2012
4-7
Graph 4.3
Defence Function Expenditure, 2007-2012
4-8
Graph 4.4
Law And Order Function Expenditure, 2007-2012
4-9
Graph 4.5
Economic Function Expenditure, 2007-2012
4-11
Graph 4.6
Environment Function Expenditure, 2007-2012
4-12
Graph 4.7
Housing And Public Facility Function Expenditure,
4-13
2007-2012
4-14
Graph 4.8
Health Function Expenditure, 2007-2012
4-15
Graph 4.9
Tourism And Culturee Function Expenditure, 2007-2012
4-16
Graph 4.10
Religion Function Expenditure, 2007-2012
Graph 4.11
Education Function Expenditure, 2007-2012
Graph 4.12
Sosical Protection Function Expenditure, 2007-2012
Graph 4.13
K/L Expenditure Trend, 2007-2012
Graph 4.14
K/L Expenditure Absorption, 2007-2012
Graph 4.15
The Expenditure Trend Of The Ministry Of Education
And Culture
Graph 4.16
The Expenditure Trend Of The Ministry Of Public Works
Graph 4.17
The Expenditure Trend Of The Ministry Of Defence
Graph 4.18
Expenditure Trend Of National Police
Graph 4.19
Expenditure Trend Of The Ministry Of Religions
xiii
4-17
4-17
4-18
4-18
4-20
4-21
4-22
4-23
4-24
List of Graphs
Page
Graph 4.20
Expenditure Trend Of The Ministry Of Transportation
4-25
Graph 4.21
Expenditure Trend Of The Ministry Of Health
4-26
Graph 4.22
Expenditure Trend Of The Ministry Of Agriculture
4-27
Graph 4.23
Expenditure Trend Of The Ministry Of Finance
4-29
Graph 4.24
Expenditure Trend Of The Ministry Of Home Affair
4-30
Graph 4.25
Central Government Expenditure Trends By Types,
2007-2012
Graph 4.26
4-34
Personnel Expenditure Trends By Types,
2007-2012
Graph 4.27
4-35
Take Home Pay Trend Of The Lowest Rank Of Public
Civil Servant 2007-2012
4-35
Graph 4.28
Material Expenditure, 2007-2012
Graph 4.29
Capital Expenditure Trend, 2007-2012
Graph 4.30
Weight Average Yield Trend Of 3-Month SPN Bids,
4-36
4-37
4-39
2011-2012
Graph 4.31
Amortization Composition Trend, 2007-2012
4-39
Graph 4.32
Subsidy Trend, 2007-2012
4-40
Graph 4.33
BPP And Power Sold Trend, 2007-2012
4-43
Graph 4.34
Non Energy Subsidy Trend, 2007-2012
4-44
Graph 4.35
Social Aids Trend, 2007-2012
4-46
Graph 4.36
Other Expenditure Trend, 2007-2012
4-49
Graph 4.37
Development Target And Realization Trend, 2010-2013
4-50
Graph 4.38
K/L expenditure Budget Trend, 2007-2013
Graph 4.39
Top 10 K/L With Larget Budget Allocation, 2011-2013
Graph 4.40
Top 10 K/L With Larget Budget Allocation, 2013
Graph 4.41
Central Government Expenditure Composition
By Economic Classification, 2013
Graph 4.42
4-69
4-69
4-69
4-86
Central Government Expenditure Composition
By Mandotory/Non Mandotory Spending, 2013
xiv
4-86
List of Graphs
Page
Graph 5.1
Transfer To Regions Tremd (Fiscal Balance, Special
Autonomy, and Adjustment Fund), 2007-2012
Graph 5.2
DAU Fund Distribuition To Provinces Throughout
5-7
Indonesia, 2011-2011
Graph 5.3
Tax Revenue Distribution Map Per Province In Indonesia
2011-2011
Graph 5.4
5-8
Natural Resources Revenue Distribution Map Per
Province In Indonesia, 2011-2011
Graph 5.5
5-10
Transfer To Region Trend (Special Autonomy Fund,
Adjustment Fund) 2007-2012
Graph 5.7
National Fiscal Dependency Ratio, 2007-2012
Graph 5.8
Economic Growth, 2010
Graph 5.9
Economic Growth, 2011
Graph 6.1
Budget Deficit Trend, 2007-2012
Graph 6.2
Budget Financing Trend, 2007-2012
Graph 6.3
Domestic Banking Financing Trend, 2007-2012
Graph 6.4
SOE Privatization Proceeds Trend, 2007-2012
Graph 6.5
Asset Management Proceed Trend, 2007-2012
Graph 6.6
Government Investment Fund PMN Trend, 2007-2012
Graph 6.8
SBN Issuance Trend, 2007-2012
Graph 6.9
The Trend Of Net SBN Issuance And Outstanding
5-11
5-20
5-25
5-25
Domestic SBN, 2007-2012
Graph 6.10
5-9
DAK Fund Distribution To Provinces Throughout
Indonesia, 2011-2012
Graph 5.6
5-7
6-2
6-3
6-5
6-6
6-8
6-9
6-15
6-16
The Trend Of Foreign Currency SBN Issuance And
Outstanding Foreign Currency SBN, 2007-2012
6-16
Graph 6.11
Foreign Loan Drawing Trend, 2007-2012
6-20
Graph 6.12
SLA Drawing Trend, 2009-2012
6-21
Graph 6.13
Domestic Loan Drawing Trend 2010-2012
6-21
xv
List of Graphs
Graph 6.14
Government Loan To GDP Trend 2010-2012
Page
6-22
Graph 6.15
Indonesia Rating Trend, 1997-2012
6-42
Graph 6.16
The Trend Of Government Revenue From SOE,
2007-2012
Graph 6.17
6-54
The Trend Of Government Expenditure To SOE,
2007-2012
Graph 6.18
Net SOE Loan Trend, 2007-2012
Graph 6.19
SOE Capital Expenditure And Long Term Loans Trend,
6-54
6-54
2007-2012
6-54
Graph 6.20
Analysis Of Aggragate SOE’S Fiscal Risk Scenario
6-55
Graph 6.21
The Trend Of Pension Benefit Payment For Civil
Public Servants, 2007-2013
Graph 6.22
The Trend Of Capital And Capital Ratio Of Bank Indonesia,
2007-2013
Graph 6.23
6-69
The Trend Of Secured Saving Fund Capital And Guarantee
Claim Reserve, 2007-2013
Graph 6.24
6-68
6-70
The Trend Of Export Financing Activities And LPEI Capital
Position, 2007-2013
6-71
Graph 6.25
Natural Disaster Contigency Fund Trend, 2007-2012
6-73
Graph 6.26
The Trend Of Mandatory Spending, 2007-2012
6-74
Graph 6.27
The Trend Of Binding and Non-Binding Spending
Composition, 2007-2012
6-75
Graph 7.1
Tax Revenue And Protection, 2007-2016
Graph 7.2
PNBP Trend And Projection, 2006-2016
Graph 7.3
Grant Revenue Trend And Projection, 2006-2016
Graph 7.4
Central Government Expenditure Trend And Projection,
7-9
7-9
7-10
2006-2016
7-12
Graph 7.5
Transfer To Regions Trend And Projection, 2007-2016
7-14
Graph 7.6
Budget Financing Trend And Projection, 2007-2016
7-14
xvi
List of Graphs
Page
Graph 7.6
Budget Financing Trend And Projection, 2007-2016
7-14
Graph 7.7
Debt Ratio To GDP, 2007-2016
7-15
xvii
List of Boxes
LIST OF BOXES
Page
Box 2.1
Manpower And Poverty
2-35
Box 3.1
Tax Ratio
3-4
Box 3.2
Export Tax For Mineral Ores
3-15
Box 4.1
Infrastructure Budget In APBN
4-89
Box 4.2
Capital Expenditure And Government Investment
Expenditure
4-102
Box 6.1
Government Guarantee For Acceleration Of Power
Generation Development Program Using Renewable
Energy, Coals And Gas
6-37
The Conversion of Non-Tradable State Securities to
Tradable SBN (Government Bonds)
6-44
Box 6.2
Box 6.3
State Sukuk Instrutment Development For Activity/Project
Financing
Box 6.4
Maximum Limit of SBSN Emission for Project Financing
Box 6.5
Maximum Limit of Foreign Loans
Box 6.6
Potential Financing With Domestic Loans
Box 6.7
Fiscal Risks of Some Large SOEs
6-57
Box 6.8
Public Private Oartnership in Infrastructure Provision
6-66
xviii
6-45
6-46
6-47
6-50
List of Matrix
LIST OF MATRIX
Page
Matrix 4.1
Summary of Programs, Performance Indicators and
Outcame of Ministries/Agencies Fiscal Year 2013
xix
4-106
Introduction
Chapter I
CHAPTER 1
INTRODUCTION
1.1 General
As a reflection of constitutional obligation, the Government has been required to prepare
and propose Draft Law on State Budget (RUU APBN) including its Financial Notes to the
House of Representatives (DPR). This mandate is prescribed in article 23 paragraph (1) of
1945 Constitution as subsequently amended into article 23 paragraph (1), paragraph (2) and
paragraph (3) of the fourth Amendment of 1945 Constitution, which reads as: "(1) the
Government Revenue and Expenditure Budget (APBN) as the reflection of state financial
management shall be enacted on yearly basis under a law and shall be exercised in transparent
and accountable fashion solely in the pursuit of people's welfare; (2) Draft State Budget
(RUU APBN) must be proposed by the President for joint discussion with House of
Representatives (DPR) with due attention to the recommendations of Regional Representative
Council (DPD); (3) in the event that the House of Representatives (DPR) rejects the Draft
State Budget proposed by the President, the Government shall use the last year's state budget".
The preparation of this Draft State Budget 2013 (RAPBN 2013) is to comply with mandate
of article 23 of the said fourth Amendment to 1945 Constitution.
In addition, the preparation of RAPBN 2013 has also referred to provisions as spelled out in
Law Number 17 of 2003 concerning State Finance. Moreover, this RAPBN 2013 is formulated
with reference to the National Medium-Term Development Plan (RPJM) for 2010 - 2014,
Government Work Plan (RKP) 2013 and Macro Economic Framework as well as Fiscal
Policy Highlights 2013 that had been mutually agreed during preliminary discussion of the
Government and House of Representatives of the Republic of Indonesia (DPR RI) from 29
May 2012 to 3 July 2012. The process and mechanism for the preparation, formulation and
discussion of RAPBN 2013 are also in observance to the Law Number 27 of 2009 concerning
MPR (People's Consultative Assembly), DPR (the House of Representatives), DPD (Regional
Representative Council), and DPRD (Regional House of Representatives).
This State Budget (APBN) 2013 has special nuisance if compared with the previous years.
The design of the last round of economic policies and development in National MediumTerm Development Plan (RPJMN) for period 2010-2014 is getting more visible. Fund
requirements for the preparation of general election to be held in 2014 have been earmarked
in RAPBN 2013. On the other side, public demands and expectations on successful
development and the associated results are started to be realized, perceived and enjoyed by
more social components with broader outreach and targets. Under this circumstance, the
roles and contribution of APBN as reflected in activity and program allocations exclusively
aiming to augment the welfare of people are much more crucial than ever before. The key is
how to manage the limited resources in a manner that can satisfy a wide variety of needs
with high quality results. Under such demanding conditions capability of observing, analyzing,
assessing and responding economic progress both at global and domestic level on top of the
presently encountered problems and challenges become primary elements in APBN 2013
preparation. All of these, in turn, will be conclusive to the qualities of policies, program plans
Financial Notes and Indonesian Budget 2013
1-1
Chapter I
Introduction
and budget allocations, and the outputs expected from the implementation of RAPBN 2013.
Nevertheless, sound macroeconomic conditions and positive responses of people are also
equally paramount.
From global perspective, uncertain economic conditions in Europe; political tension in some
regions around the world, such as in Middle East; climate change and natural disaster; and
the trend of soaring prices of commodities and oil in global markets remain major obstacles
that may hamper domestic economic growth in 2013. However, the reviving global and
domestic economic performance toward positive trend has buoyed up the optimism to step
forward in maximizing all potentials and opportunities of this Country to boost the wellbeing of Indonesian people. Besides, it is deemed necessary to take anticipative and responsive
policies through sound and prudent fiscal management in order to maintain national
economic stability.
From internal wise, the challenges to be dealt with will concern initiatives of how to accelerate
and enhance the distribution of development and its results to augment the prosperity of
people. Poverty alleviation and unemployment rate reduction remain the main problems
that must be ironed out. In this respect, since 2011 the Government has prepared two major
development strategies as key policies, i.e. Master Plan for the Acceleration and Expansion of
Indonesia's Economic Development (MP3EI) and Master Plan for Poverty Alleviation
Acceleration and Expansion (MP3KI). It is expected that these two strategies will be synergic
in the implementation. The launching of MP3KI program in tandem with MP3EI program
is to develop strong synergy in the pursuit of: (a) high, inclusive, equitable and sustainable
growth; (b) economic development equitably distributed throughout the Country;
(c) employment generation; and (d) poverty alleviation.
Without vilifying RPJMN, MP3EI program will serve as an umbrella for all infrastructure
development in Indonesia. It is a breakthrough. The development of main corridors as driving
motors and supports of economic activities in the surroundings and domestic connectivity
improvement are expected capable of integrating markets around the Country that will
embrace overall villages. With the adoption of such strategies, the results of development
and [economic] growth can be further optimized. Likewise, their impacts to employment
generation will improve and be more equitably distributed to regions throughout Indonesia.
In this context, MP3KI program is to accelerate poverty alleviation programs. This program
is focused on the provision of basic needs and income generation with integrated and synergic
poverty alleviation programs subject to the local conditions of the regions concerned.
These two initiatives, i.e. MP3EI and MP3KI alongside the latest global and domestic economic
performance trends and their prospects in future as well as problems and challenges that are
likely to encounter in 2013 have been referred to in working out the Government Work Plan
(RKP) 2013, and this RPK 2013 has been thereafter used as reference in RAPBN 2013
preparation.
In view of vision RPJMN 2010-2014, i.e. "To Realize Prosperous, Democratic and Just
Indonesia", the existing potentials and the current and future challenges and problems the
theme of RKP 2013 is as follows: "Reinforcing Domestic Economy for People's Welfare
Augmentation and Expansion". To support the realization of such theme, RKP 2013 set 11
national priorities and other 3 priorities consisting of: (1) Bureaucracy and Governance
1-2
Financial Notes and Indonesian Budget 2013
Introduction
Chapter I
Reform; (2) Education; (3) Health; (4) Poverty Alleviation; (5) Food Resilience; (6)
Infrastructure; (7) Investment Climate and Business Climate; (8) Energy; (9) Environment
and Disaster Management; (10) the Development of Underdeveloped Regions, the Frontiers,
Outer Regions and Conflict-Torn Regions; (11) Culture, Creativity, Technology Innovation;
(12) Other Politics, Law and Security Affairs; (13) Other Economic Affairs; and (14) Other
People Welfare Affairs.
The preparation and determination of priority programs and activities in 2013 have take
various aspects into consideration inclusive of: (1) inter-regional linkage in terms of social,
economy, culture, and politics as reflection of archipelago concept within Unitary State of
Republic of Indonesia; (2) development performance and strategic issues of each region; (3)
development objectives and goals of individual region according to the objectives and goals
of RPJPN 2005-2025 and RPJMN 2010-2014; (4) spatial planning of island areas and
optimum spatial use; (5) MP3EI implementation; and (6) poverty alleviation acceleration
program, to wit, (a) household-based social assistance program (Cluster 1), (b) community
empowerment programs (Cluster 2), (c) micro and small scale enterprises empowerment
programs (Cluster 3), and (d) pro-people programs (Cluster 4).
With reference to theme of RKP 2013 and the existing resources capacity, the focus of 11
national priority activities and other 3 priorities in RKP will be stressed on the management
of several strategic issues including 4 (four) major aspects, i.e.: (1) competitiveness
improvement; (2) economic resilience reinforcement; (3) people's welfare augmentation
and expansion; and (4) social-political stability strengthening. The strategic issues relating
to competitiveness improvement include: (a) improving investment and business climate
(ease of doing business); (b) accelerating infrastructure development for domestic
connectivity; (c) intensifying industrial development in various economic corridors; and (d)
generating employment opportunities, especially for young workforce. As to strategic issues
relevant to economic resilience reinforcement, they are inclusive of: (a) reinforcing food
resilience toward 10 million tons rice surplus by 2014; and (b) increasing electrification ratio
and energy conversion. Meanwhile, issues concerning people's welfare augmentation and
expansion are (a) developing human resources; and (b) accelerating poverty alleviation by
synergizing Cluster 1 through Cluster 4. Strategic issues for social and political stability
strengthening concern, among other things, (a) anticipation for the preparation of 2014
general election; (b) bureaucracy performance improvement and corruption eradication;
and (c) reaching minimum essential force (MEF). These strategic issues are then reflected in
fiscal policy directions and APBN 2013 posture.
1.2
Basic Assumptions for the Macroeconomics 2013
Basic assumptions underlying the macroeconomics cover variables expected to have
significant influence over APBN posture. While the said assumptions are just predictions to
calculate APBN posture, under certain conditions they turn into targets that must be realized.
In this respect, maintaining stable macroeconomic is a must to safeguard the implementation
of APBN.
The said basic macroeconomic assumptions for 2013 are prepared in view of the latest
development and its prospect in future. With relatively promising economic performance for
Financial Notes and Indonesian Budget 2013
1-3
Chapter I
Introduction
the last five years, Indonesia's macroeconomic prospect is relatively sound with potential
upward trend in future. Thanks to gross domestic product (GDP) that increases 5.9 percent
per year on the average from 2007-2011, the national economy is expected to grow in excess
of 6 percent in 2012 and 2013. The inflation rate is curbed at moderate level consistent with
the target inflation set by Bank Indonesia. Interest rate is to steadily decrease. Rupiah
exchange rate is relatively stable despite weakening trend since 2011 as a result of global
economic crisis.
Other variables adopted as basic macroeconomic assumptions in 2013 include oil and gas
calculation, either in terms of revenues or expenditures. These variables are Indonesian Crude
Price (ICP), oil lifting and gas lifting. Variable of gas lifting is just adopted as basic assumption
in this RAPBN 2013 to enhance transparency in natural gas revenue calculation. The
Indonesian Crude Price (ICP) is considerably dependent on external factors, which are very
difficult to predict. Oil lifting and gas lifting are actually dominated by internal factors.
However, this issue is very complicated in the planning since the realization of oil lifting is
always lower than the target, particularly for the last few years.
Upon attentive examination of the foregoing facts, the basic assumptions underlying the
national macroeconomy for the preparation of this APBN 2013 posture will be as follows:
1. The economic growth is expected to chalk up 6.8 percent. In terms of expenditures, this
2013 economic growth will be primarily attributed to public and government consumptions,
and the accumulation of gross fixed capital (PMTB)/investment. From production wise,
agriculture sector, processing sector, construction sector, trade, hotel and restaurant sector
along with transportation and communication sector will be the main driving sectors for
the said economic growth.
2. Inflation rate is predicted controllable at 4.9 percent range. It can be realized with smooth
supplies and distribution of goods and services, better fiscal, monetary and real sector
policy coordination coupled with higher awareness of the regional governments in
controlling inflation.
3. Average rupiah exchange rate to US dollar in 2013 is set at Rp.9.300/US$. The pressure
against rupiah exchange rate is predicted to come from the deminishing surplus of
Indonesian balance of trade and economic slowdowns in China, India, and Brazil that
may deteriorate the attractiveness of investments in emerging market countries and
potential to spark fligth to quality.
4. The 3-month SPN rate (State Treasury Bill) in 2013 is projected to range at 5.0 percent.
Some factors that have been taken under consideration are inclusive of controllable
inflation rate, exchange rate and capital inflows to Indonesia.
5. The Indonesian Crude Price (ICP) in international markets is expected to reach US$100
per barel. This expectation is fortified with oil demand growth projection and lower oil
supply growths of non-OPEC countries.
6. Oil lifting and gas lifting of Indonesia in 2013 is forecasted at 2,260 thousand barrel of oil
equivalent per day consisting of oil lifting of 900 thousand barrels per day and natural
gas lifting 1,360 thousand barrel of oil equivalent per day. Starting from APBN 2013, gas
1-4
Financial Notes and Indonesian Budget 2013
Introduction
Chapter I
lifting assumption is merged with oil lifting assumption for the harmonization with
alternative energy intensification program and more rational calculation of government
revenues and expenditures. The latter is more obvious due to the facts of more natural
gas reserves found during oil and gas exploration in the recent years.
The trend of realized basic macroeconomic assumptions from 2007 to 2011 and their projection
in 2012 - 2-13 is presented in Table 1.1.
TABLE 1.1
BASIC MACROECONOMI C ASSUMPTI ON, 2007–2013
2007
2008
2009
2010
2011
Real.
Real.
Real.
Real.
Real.
2012
2013
Economic I ndicators
6,3
1. Economic Grow th (%)
6. Oil Lifting (thousand barrel/day)
7. Gas Lifting (mboepd)
*)
6,2
6,5
6,5
*)
6,3
APBN
6,8
6,6
11,1
2,8
7,0
3,8
6,8
4,8
4,9
9.691
10.408
9.087
8.779
9.000
9.250
9.300
8,0
9,3
7,5
6,6
4,8
5,0
3,9
5,0
72,3
97,0
61,6
79,4
111,5
105,0
110,0
100,0
904,0
871,0
944,0
953,9
898,5
930,0
900,0
-
-
4. 3-Month SPN Rate (%)
5. ICP (US$/barrel)
4,6
Outlook
9.140
2. I nflation (%)
3. Exchange Rate (Rp/US$)
6,0
APBNP
-
-
-
-
-
900,0
1.360,0
A c c or din g t o t h e ou t look i n A PBN 2 0 1 2 i m p le m e n t a t i on r e p or t se m e st er I
S ou r c e: t h e Min ist r y of Fi n a n c e
1.3
Fiscal Policy Highlights
Fiscal policy as the main policy of the Government implemented through APBN plays crucial
and strategic roles to the national economy, especially in the pursuit of development targets.
The said roles relate to three primary functions of the Government, i.e. allocation function,
distribution function, and stabilization function. APBN must be designed in a manner that
can support such functions with ultimate goals of accelerating high and quality economic
growths. Allocation function concerns the Government's interventions in economic resources
allocation. Distribution function deals with the distribution of goods that have been produced
by the communities, and stabilitation function is how to maintain the stability of and
accelerate economic performance at full employment level and relatively stable prices.
Of these three functions, stabilization function is aimed at minimizing the volatility or
fluctuation of the economy. It is the essence of APBN policy. From this stabilization role,
fiscal policy has been regarded as an effective tool to simplify business cycle. The history of
fiscal policies in Indonesia showed that during economic crisis in 1997/1998 and crisis 2009,
expansive fiscal policy with fiscal stimulus allocation in 2009 was able to reinforce the
Indonesian economy against crisis impacts, and even recorded distinctive positive growth
amid the faltering global economic growth. The economic stability was well maintained and
sound fiscal conditions were established. Of course, it is not only due to appropriate fiscal
policy, but also the synergy of monetary policy and other policies.
Eclipsed under relatively unrecovered global economy and in view of potential revenue sources
and budget requirements in future, fiscal policy in 2013 is predicted to remain of expansive
character, in which the Government expenditures will outnumber the revenues. This approach
is necessary notably to stimulate economic growth. In future it is expected that the economic
growth will accelerate toward higher growth coupled with the optimism of the Government
Financial Notes and Indonesian Budget 2013
1-5
Chapter I
Introduction
about the bolstering economic conditions in future. The challenges that must be coped with
are to foster more quality economic growth, i.e. capable of complying with these three
requirements: (a) generate employment and reduce unemployment and poverty; (b)
supported with equality dimension; and (c) the structure proportionally reinforced with
various supporting sectors, either in terms of aggregate demands or aggregate supplies. In
2013, with the anticipated economic growth at 6.8 percent it is expected that such growth
can reduce unemployment rate and poverty rate to 5.8 - 6.1 percent and 9.5 - 10.5 percent
respectively.
Consistent with the development theme for 2013: "Reinforcing Domestic Economic for People
Welfare Augmentation and Expansion", the fiscal policy in 2013 will be established as follows:
"to boost Sustainable Economic Growth with Fiscal Restructuring". The substance of this
theme is focused on the importance of building sound fiscal condition to reach sustainable
economic growth. Four (4) strategies to maintain the economic sustainability are inclusive
of: (a) optimizing Government revenues while maintaining business climate conducive for
investments, business world expansion and environment preservation; (b) enhancing the
quality of Government expenditures with efficiency for un-productive expenditures and
increasing infrastructure revenues to expedite the growth; (c) maintaining budget deficit at
safe limit (below 3 percent of GDP); and (d) decreasing debt ratio to GDP at controllable
rate.
Generally speaking, fiscal policy in 2013 remains expansive in order to maintain growth
momentum while curbing the deficit at tolerable threshold. This policy will be exercised
with: (1) Government revenue policy; (2) Government expenditure policy; and (3) financing
policy.
The Government revenue policy in 2013 will be directed to optimize the revenue from tax
and non-tax (PNBP) sector. In the former, some significant policies and steps to take in 2013
are: (1) to continue basic taxation policies that have been introduced in 2012; (2) to intensify
tax potential exploration; and (3) to improve supervision and services in customs and excise
sector. The highlights of PNBP policy in 2013 include: (1) increase non tax revenue from
both oil and gas and non-oil and gas sectors; (2) enhance the performance of state-owned
enterprises (SOEs) with greater dividend contributions; and (3) to continue inventory,
intensification of K/L (Ministries/Agencies) Non-Tax Revenue (PNBP). This PNBP
optimalization will be carried out along with revenue optimalization from Public Service
Agencies (BLU).
From the Government expenditure side, the essense of expenditure strategies in 2013 both
for ministries/agencies (K/L) or non K/L will remain focused on 4 (four) pillars: (1) maintain
high level economic growth (pro-growth), (2) increase productivity for employment expansion
(pro-job); (3) improve and maintain poverty alleviation program (pro-poor); and (4) support
eco-development (pro-environment). These development priorities are expected capable of
reinforcing the domestic economy for people welfare augmentation and expansion as
prescribed in the foregoing national development theme for 2013.
In the mean time, to enhance the quality of Government expenditures, in 2013 the
Government will increase the allocation of expenditure budget to stimulate economic growth
at higher level. In this context, the Government plans to rise electricity tariff rate and reallocate
the saved electricity subsidy to infrastructure budget.
1-6
Financial Notes and Indonesian Budget 2013
Introduction
Chapter I
General policies from financing aspect to be taken by the Government in 2013 are: to spend
budget surplus (SAL) for the anticipation of SBN (Government Bond) market crisis and
finance budget deficit; (2) to direct the spending of Government investment fund especially
for infrastructure development, and build investment capacity of the Government, notably
for the takeover of PT Inalum; (3) to allocate the State Capital Participation (PMN) to fortify
the security capacity of people entrepreneurship credit program (KUR), initial capitals for
Social Security Agency (BPSJ), SOE restructuring and revitalization, and to meet the
obligations of Indonesia as the member of international organizations/institutions and of
ASEAN Infrastructure Fund; (4) to maintain net negative policy of foreign loans; (5) to
achieve debt ratio to GDR at 21 - 23 percent by end of 2013; and (6) to improve the flexibility
of loan financing with relatively low-cost and controllable risk debt instruments
From the above mentioned measures, it is expected that APBN be managed in efficient and
productive fashion and in turn provide optimum contribution for fiscal sustainability and
rise the competitiveness of domestic economy and ultimately support national development
with end of view of augmenting the prosperity of all Indonesian people.
1.4 APBN 2013 Posture Summaries
RAPBN 2013 posture is prepared based on public economic principles aimed to optimize
revenue sources while introducing efficiency and effectiveness in expenditures and budget
financing allocation. Aside from basic macroeconomic assumptions, the amounts set in APBN
2013 posture also take good governance practices, policies to be taken in future and APBN
realization trends of previous years under consideration.
During 2007 - 2011, APBN realization recorded fluctuated budget deficits following the
realization of revenue and expenditure during the said periods. In 2007 - 2011 the realizations
of revenues and grants ranged from 15.1 to 19.8 percent of GDP with realized expenditure
for the same period at 16.2 to 19.9 percent range, and deficit realization at 0.1 percent to 1.6
percent of GDP.
In APBNP 2012 the Government revenues are expected to reach Rp.1,358.2 trillion with
Rp.1,548.3 trillion of expenditures and as such the deficit is predicted to record Rp.190.1
trillion (2.23 percent) of GDP.
The expansive budget policy taken by the Government until the enactment of APBNP 2012
will be maintained in 2013. Based on the directions and strategies of fiscal policy, APBN 2013
posture will have figures as highlighted below:
a. The Government revenues are planned to reach Rp.1,529.7 trillion composing of tax
revenues Rp.1,193.0 trillion, PNBP (non-tax) revenue Rp.332.2 trillion and grants Rp.4.5
trillion.
b. The Government expenditures are predicted to amount Rp.1,683.0 trillion consisting of
Central Government Expenditures Rp.1,154.0 trillion and Transfer to Regions Rp.528.6
trillion.
c. Budget deficit is set at Rp.153.3 trillion (1.65 percent) of GDP.
d. Budget financing for APBN 2013 is from domestic financing sources Rp.172.8 trillion
and foreign financing (net) Rp.19.5 trillion.
Financial Notes and Indonesian Budget 2013
1-7
Chapter I
Introduction
The summary of RAPBN 2013 posture is presented in Table 1.2.
TABLE 1.2
APBN TREND, 2007 - 2013
(trillion rupiah)
2012
2007
2008
2009
2010
2011
Real.
Real.
Real.
Real.
Real .
APBNP
2013
DESCRIPTION
A. GOV ERNMENT REVENUE
*)
APBN
7 07 .8
981.6
848.8
995.3
1,210.6
1,358.2
1,372.4
1,529.7
706.1
979.3
847 .1
992.2
1,205.3
1,357 .4
1,366.4
1,525.2
1 . Ta s Rev enu e
4 91 .0
6 58.7
61 9 .9
7 23 .3
87 3 .9
1 ,01 6 .2
1 ,02 1 .8
1 ,1 9 3 .0
2 . Non Ta x Rev en u e
2 1 5.1
3 2 0.6
22 7 .2
2 68.9
3 3 1 .5
3 4 1 .1
3 4 4.6
3 3 2 .2
1.7
2.3
1.7
3.0
5.3
0.8
6.0
4.5
7 57 .6
985.7
937 .4
1,042.1
1,295.0
1,548.3
1,551.5
1,683.0
I. Domest ic Revenue
II. Grant Rev enue
B. GOVERNMENT EXPENDITURE
I. Cent ral Gov ernment Ex pendit ure
504.6
693.4
628.8
697 .4
883.7
1,069.5
1,068.8
1,154.4
1 . Minist ries/Agen cies (K/L)
2 25.0
2 59.7
3 07 .0
3 3 2 .9
4 1 7 .6
54 7 .9
507 .5
59 4 .6
2 . Non K/L
27 9 .6
4 3 3 .7
3 2 1 .8
3 6 4.5
4 6 6 .1
521 .6
56 1 .3
559 .8
253.3
292.4
308.6
344.7
411.3
47 8.8
482.7
528.6
24 4 .0
2 7 8.7
287 .3
3 1 6 .7
3 4 7 .2
408.4
4 1 2.3
4 4 4 .8
9 .3
1 3 .7
21 .3
28.0
6 4 .1
7 0.4
7 0.4
83 .8
30.0
84.3
5.2
41.5
8.9
(7 2.3)
(67 .2)
(40.1)
(153.3)
II. Transfer t o Regions
1 . Fisca l Ba lan ce
2 . Specia l Fu nd an d Adjust m ent Fun d
C. PRIMA RY BALANCE
D. BUDGET SURPLUS/(DEFICIT) % deficit to GDP
E. FINANCING
(49.8)
(4.1)
(88.6)
(46.8)
(84.4)
(190.1)
(17 9.1)
(1 .26)
(0.08)
(1 .58)
(0.73)
(1.1 4)
(2.23)
(2.1 6)
42.5
84.1
112.6
I. Domest ic Financing
69.0
102.5
1 . Dom estic Ban kin g
1 1 .1
1 6.2
2 . Dom estic Non-Ban king
57 .9
II. Foreign Fi nancing (Net t o)
(1.65)
91.6
130.9
190.1
185.8
153.3
128.1
96.1
148.7
194.5
194.9
17 2.8
41 .1
22 .2
4 8.9
6 0.6
6 0.6
1 4 .3
86.3
87 .1
7 3 .9
9 9 .8
1 3 4 .0
1 3 4.4
1 58.5
(26.6)
(18.4)
(15.5)
1 . For eign Loan Draw ing (Gross)
3 4 .1
50.2
58.7
54 .8
2 . SLA
(2 .7 )
(5.2 )
(6 .2)
(8.7 )
(4 .2 )
(8.4 )
(8.1 )
(7 .0)
(57 .9 )
(6 3 .4 )
(6 8.0)
(50.6 )
(4 7 .3 )
(4 9 .7 )
(50.5)
(58.4)
(7 .4)
80.0
24.0
44.7
46.5
0.0
6.7
0.0
3 . Am ortiza tion
Financing Surplus (Deficit )
*)
Outlook
(4.6)
(17.8)
3 3 .7
(4.4)
53 .7
(9.1)
4 9 .5
(19.5)
4 5.9
A ccor din g t o ou t look in A PBN 2 0 1 2 Im plem en t a t ion Re por t S em est er I
Sou r ce: t h e Min ist r y of Fin a n ce
1.5 Brief Description of Chapters
This Financial Note and APBN 2013 composes of 7 (seven) chapters initiated with Chapter 1
- Introduction - detailing the general description including short notes to RKP (the
Government Work Plan) and legal basis underlying the preparation of APBN 2013, basic
assumptions of macroeconomics, fiscal policy highlights, summary of APBN 2013 posture,
and brief description of Chapters.
Chapter 2 of Basic Assumptions of Macroeconomics points out the economic trends from
2007 to 2011 and economic projection for 2012 as basis in forecasting the economic prospects
in 2013, challenges and targets of macroeconomic policy in 2013, and closed with basic
assumptions of macroeconomics for APBN 2013.
Chapter 3 deals with the Government Revenues. This chapter discusses the trends of revenue
realizations from 2007 - 2011 and revenue estimates in 2012; challenges and opportunities
of Government revenues; and targets of Government revenues in 2013, which include
domestic revenues and grants.
Chapter 4 of Central Government Expenditures concerns the progress of policy and
implementation of Central Government Expenditure Budget in 2007 - 2012; RKP (the
Government Work Plan) highlights for 2013; and central government expenditure policy
and budget in RAPBN 2013 by functions, organizations and types.
1-8
Financial Notes and Indonesian Budget 2013
Introduction
Chapter I
Chapter 5 concerning Fiscal Decentralization Policy details the progress of policy and
implementation of fiscal decentralization in 2007 - 2012; problems and challenges in fiscal
decentralization; and transfer to regions policy and budgeting in 2013.
Chapter 6 of Deficit, Budget Financing and Fiscal Risk concerns the trends of budget deficit
and financing in 2007 - 2012, and budget financing plan in 2013 covering non-loan and
loan financing sources. This chapter also underlines fiscal risks.
Chapter 7 of Medium-Term APBN Projection discusses the projections of basic assumptions
of macroeconomics, the Government revenues, the Government expenditures, and budget
financing in medium-term wise (2014-2016), and medium-term expenditure framework.
Financial Notes and Indonesian Budget 2013
1-9
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
CHAPTER 2
BASIC ASSUMPTIONS OF MACROECONOMICS
2.1 General
Global economic recovery trend after financial crisis and global recession since 2008 remains
an issue garnering great attention from various parties around the world. However until the
mid of 2012 such recovery phase fails to proceed as expected. It is mainly attributed to
prolonged fiscal crisis and debt settlements in Europe, which are unfortunately predicted still
a grave challenge that must be coped with in this 2013. The exceeding debts have impeded
stimulus efforts required by these western countries. Besides, investments and capital flows
have been aggravated by lower credit rating of some European countries in 2012.
Under such circumstance, more attention must be given to the fickle prices of global energy
commodities. This is particularly evident from the wildly fluctuating prices of crude oil in
international markets for the last few years. For example, the crude oil price at global level
has skyrocketed in the last two years. While it is then to drop, the price, which easily fluctuates
will disrupt economic stability and incite negative sentiment in many countries.
This condition also has influence over the Indonesian economy, despite insignificant impacts
according to the data. It is indicated with the capability of Indonesian economy to record 4.6
percent growth in 2009. The key lied on the anticipative policies against crisis impacts adopted
in the time. Likewise, in 2012, the Government has prepared a number of measures for
critical management protocol. The Government is optimistic that amid uncertain global
economic growth the national economic performace in 2012 and 2013 can reach growth of
more than 6.0 percent. The challenge to deal with in future concerns of how to record more
quality economic growth, i.e. capable of reducing poverty rate and unemployment rate in
faster and synergic manner for more equally distributed development outcomes.
Apart from impacts to economic growth, global economic trends and international commodity
prices in 2012 can affect the performance of balance of payment in the same year, which is
projected to record deficit in current transactions, even though such deficit can be covered
from capital and financial transaction surplus. In 2013, the balance of payment is expected
to book relatively high surplus from capital and financial transaction surplus and enormous
foreign capital inflows. Nevertheless, the current transactions are predicted to make deficit
as a result of strong domestic demands, in which the import will outnumber the export.
The immediate impact of the foregoing situation is more obvious to rupiah exchange rate,
which remains under pressure in 2012 and 2013. As to inflation rate and interest rate, they
can be controlled at lower level. Thus, in general the macroeconomic conditions in future
are relatively promising.
The above trends have been applied as basis in preparing and setting macroeconomic targets.
These targets constitute basic assumptions as references in calculating APBN posture. They
consist of economic growth, inflation, exchange rate, interest rate, oil price and oil lifting.
Since 2013, these basic assumptions have been added with gas lifting due to the fact of the
increasingly gas production and upward contribution of oil and gas sector.
Financial Notes and Indonesian Budget 2013
2-1
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
2.2 The Economic Trend 2007 – 2011 and Realization
Projection 2012
2.2.1 Global and Regional Economy
Global economy during 2007 – 2011 shows ups and downs phenomenon as experienced in
some developed countries and global markets. In period 2008-2009, subprime mortgage
crisis in US financial market not only exerted great pressure to real sector but also spread to
other countries, particularly in European region. The crisis then turned into global crisis that
may lead to global economic contraction. The economic growth at global level in 2007 reached
5.4 percent, and started to constantly slow down in 2008, until recorded a dismal negative
0.6 percent in 2009. Thanks to varying responsive policies either taken individually or
collectively in many regions, the global economy was recovering in 2010 and chalked up 5.3
percent growth.
In the following years, the global economy again faces new challenges as a result of exceeding
debts of European countries. Stimulus policy package launched as a response to crisis in
2009 was not followed with prudent fiscal management. In 2011, new pressure started to
exert from the consequences of enormous debts that must be complied with by the majority
of European countries. Their liquidities and financial sectors had to shoulder unbearable
pressure. This calamity further spread to real sector and incited economic crisis in European
regions.
In the same time, the leading countries in the world were entangled with their domestic
economic challenges. US stimulus policy package was not sufficient to encourage decent
growth. Meanwhile, Japan suffered economic contraction. This country, which in 2011 was
ravaged by tsunami, was also disrupted with nuclear reactor leak crippling its production
and trading activities.
The crumpling economy of developed countries brought adverse implications to the developing
countries. The export volumes of the latter had drastically dropped since they more destined
their exports to these troubled rich countries. The faltering economy of developed countries
has decreased export demands on various products from developing countries. This
phenomenon becomes new pressure to the national economy of developing countries, notably
those considerably dependent on exports such as China, India and Singapore.
%, yoy
10
GRAPH 2.1
GLOBAL ECONOMIC GROWTH
2007-2011
%, yoy
20
8,7
7,5
8
6
GRAPH 2.2
GLOBAL TRADE VOLUME GROWTH TREND
2007 - 2011
5,4
4
6,0
2,8
5,3
6,2
3,9
2,8
2
0
3,2
0,0
-2
-0,6
1,6
Global
Dev'ed Countries
Dev'ing Countries
-3,6
-4
-6
2007
2008
Source: World Economic Outlook - IMF, Juli 2012
2-2
10
5
2,8
2009
2010
2011
14,3
15
7,9
7,2
2,9
5,9
2007
2008
2009
-10,5
-10
-15
6,3
2,4
0
-5
12,9
-11,7
2010
2011
Goods
Goods and services
Source: World Economic Outlook - IMF, July 2012
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
These insistent pressure and challenges have slowed down the global economic growth. After
recovery in 2010, the global economy started to falter again with lowly 3.9 percent growth.
The similar diminishing pattern is also found in trade volume growth, which in 2011 just
recorded 5.9 percent, half of 2010 performance (see Graph 2.1. and Graph 2.2.).
2.2.2 National Economy
Economic Growth
The national economy is relatively strong
GRAPH 2.3
enough to face the occuring global crisis.
INDONESIAN ECONOMIC GROWTH,
It can be seen from high economic growth persen
2007 - 2011 (%, YOY)
7
of Indonesia in 2011. While the other
6,5
6,3
countries either suffer economic slowdown 6
6,2
6,0
5
or even negative growth. For the last five
4,6
years (2007-2011), the Indonesian 4
3
economy managed to constantly grow at
2
5.9 percent (yoy) on the average. This
1
percentage is higher than the average rate
0
of previous five year period (2002-2006),
2007
2008
2009
2010
2011
which only reached 5.1 percent (yoy). In
Source: Central Bureau of Statistics
2007, the national economy of Indonesia
grew by 6.3 percent (yoy). However, in 2008 this growth was a little bit decreasing as a
result of global crisis. Even though, in this difficult condition Indonesia recorded a distinctive
economic growth of 6.0 percent (yoy). This economic downward continued until 2009 when
the national economi was to grow by 4.6 percent (yoy). The economic recovery was just
started in 2010 when the national economy was to grow by 6.2 percent (yoy). In 2011 the
national economy starts to revive with a growth of 6.5 percent (yoy) amid glooming global
crisis in Europe (see Graph 2.3).
Indonesia’s economy in 2011 recorded
GRAPH 2.4
favorable growth at 6.5 percen (yoy). Debt persen
ECONOMIC GROWTH BY EXPENDITURE ,
2007 – 2011 (%, YOY)
crisis in USA and Europe exerted 25
20
insignificant impacts to national economy.
15
Domestic demands remained high to hold 10
external slowdown. The sources of 5
economic growth in 2011 came from gross 0
2007
2008
2009
2010
2011
fixed capital formation (PMTB), which -5
-10
grew by 4.7 percent (yoy), and
government consumption which raised by -15
Domes. Consump
Gov. Consum
PMTB
Export
Import
-20
3.2 percent (yoy). As to export-import, it Source: Central Bureau of Statistics
experienced a downturn if compared with
last year’s realization, i.e. 13.6 percent and
13.3 percent (yoy) respectively. (Graph 2.4). From sector wise, the economic growth in
2011 was attributable to processing industry sector, which recorded relatively high growth,
i.e. 6.2 percent (yoy), and trade, hotel and restaurant sector for its 9.2 percent (yoy)
contribution.
Financial Notes and Indonesian Budget 2013
2-3
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
In 2011, public consumption was to rise 4.7 percent (yoy) same as realization in 2010. As
from the first quarter to the final quarter 2011, this public consumption showed upward
trends. It indicated better purchasing power of people along 2011 coupled with low inflation
in the year. Public consumption growth was due to food and non-food consumptions,
recording 3.8 percent (yoy) and 5.5 percent (yoy) respectively. This kind of consumption
was the largest contribution to economic growth or GDP, i.e. 54.6 percent.
Significant increase was recorded in government consumption in 2011 with 3.2 percent (yoy),
which was higher than 2010’s realization reaching 0.3 percent (yoy) only. This government
consumption was from material and personnel expenditures recording 3.6 percent (yoy)
and 5.4 percent (yoy) respectively. Higher personnel expenditure came from remuneration
to some ministries/agenciess. Despite significant increase, the contribution of government
consumption to economic growth was relatively small, i.e. only 9.0 percent to total GDP.
Investment expenditure (gross fixed capital formation/PMTB) in 2011 shows a little bit higher
growth than in 2010, i.e. from 8.5 percent (yoy) to 8.8 percent (yoy). This better performance
was driven by more investments in import machines and equipment. Domestic consumption
growth had increased demands on new machines to assure production capacity in future.
With regard to high investments on import transport modes, it was due to the purchase of
some aircrafts to respond the reviving economic activities, from which more intensive interregion transporation was generated. Investments on construction was slightly to decrease
because of relatively stagnant growth in this sector. Despite relatively small contribution to
GDP if compared with public consumption’s investment expenditure this sector gave high
contribution to economic growth.
TABLE 2.1
GDP DISTRIBUTION AND CONTRIBUTION TO ECONOMIC GROWTH
2010 - 2011
Expenditure
Public Consumption
Government Consumption
PMTB
Export
Import
Sector
Agriculture
Mining
Industry
Electricity, Gas and Water Supply
Construction
Trade, Hotel and Restaurant
Transportation and Communication
Finance, Real Estate & Corporate Services
Services
Distribution (%)
2010
2011
56,6
54,6
9,0
9,0
32,1
32,0
24,6
26,3
22,9
24,9
Contribution (%)
2010
2011
2,7
2,7
0,0
0,3
2,0
2,1
6,5
6,3
5,6
4,8
15,3
11,2
24,8
0,8
10,3
13,7
6,6
7,2
10,2
0,4
0,3
1,2
0,0
0,4
1,5
1,2
0,5
0,6
14,7
11,9
24,3
0,7
10,2
13,8
6,6
7,2
10,5
0,4
0,1
1,6
0,0
0,4
1,6
1,0
0,7
0,6
Source: the Ministry of Finance
2-4
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
At variance with other components, export and import growth for goods and services in
2011 indicated a downturn if compared with realization in 2010. Global economic pressure
had decreased Indonesia’s export performance i.e. from 15.3 percent (yoy) in 2010 to 13.6
percent (yoy) in 2011. Accordingly import growth had been also dropped from 17.3 percent
(yoy) in 2010 to 13.3 percent (yoy) in 2011. However, import slowdown, which was higher
than the export had caused net export to reach 14.4 percent (yoy) in 2011 from previously
8.7 percent (yoy). The downturn of export – import growth for goods was just evident in
quarter IV 2011. However, the direct impacts of crumpling European economy to Indonesia’s
exports were relatively insignificant because of low direct export composition to these crisis
hit countries (see Table 2.1.).
From demand side, all economic sectors recorded positive growths in 2011, despite lower
rates for some of them. Processing industry sector, trade, hotel and restaurant sector, financial
sector and service sectors chalked up positive growth. Meanwhile, four sectors recording
lower growths were mining sector, electricity, gas and water supply sector, and transport
and communication sector. On the other side, agriculture sector reached constant growth.
The highest growth was found in transport and communication sector thanks to its double
digit growth, i.e. 10.7 percent (yoy). However, this performance was a decrease if compared
in 2010 when this sector reached 13.4 percent (yoy) growth. This growth was particularly
from communication sub-sector growing by 12.7 percent (yoy) due to increase of
communication equipment, either in terms of types or intensity of their uses. Transport
sub-sector was to grow by 7.6 percent (yoy) coming from the increases of land transport
sub-sector, sea transport sub-sector and other supporting transport sub-sector recording
growths by respectively 6.6 percent (yoy), 2.8 percent (yoy), and 6.8 percent (yoy). The
increasing number of passengers and varying land and sea transport modes had supported
this bolstering sub-sector.
Processing industry sector in 2011 was to significantly grow by 6.2 percent (yoy). This
realization reflected a great increase in comparison with previous year’s performance of
4.7 percent (yoy). This upsurge was due to growth in non-oil and gas sub-sector reaching
6.8 percent (yoy). Meanwhile, oil-gas industry sub-sector experienced contraction of
0.9 percent (yoy). The growth of non-oil and gas sub-sector was supported by basic metal,
iron and steel industries, food, beverage and tobacco industries and textile, leather made
items and footwear industries. These three sub-sectors contributed by respectively 13.1 percent
(yoy), 9.2 percent (yoy) and 7.5 percent (yoy). Contraction in non-oil and gas sub-sector
was particularly due to minus growth of liquid natural gas industry (see Table 2.2).
Trade, hotel and restaurant sector experienced growth from 8.7 percent (yoy) in 2010 to 9.2
percent (yoy) in 2011. Such growth was attributed to sound performance of large trades and
retail sectors, which grew by 10.0 percent (yoy). Meanwhile, hotel sub-sector and restaurant
sub-sector recorded growths of 9.0 percent (yoy) and 4.1 percent (yoy) respectively.
Agriculture, livestock, forestry and fishery sectors in 2011 were relatively stagnant to previous
year’s performance, i.e, 3.0 percent (yoy). The largest contribution for this agriculture sector
growth was from fishery sector of 6.7 percent (yoy). In the mean time, food crop sub-sector
was the main contribution for this sector, which experienced slowdown if compared with
2010’s performance, i.e. from 1.6 percent (yoy) to 1.3 percent (yoy). This lower growth of
food crop sub-sector was because of climate factors causing decrease in agriculure production,
notably paddy.
Financial Notes and Indonesian Budget 2013
2-5
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
TABLE 2.2
ECONOMIC GROWTH BY SECTORS
2007-2011 (percent)
Sector
2007
2008
2009
2010
2011
Agriculture
3,5
4,8
4,0
3,0
3,0
Mining
1,9
0,7
4,5
3,6
1,4
Industry
4,7
3,7
2,2
4,7
6,2
10,3
10,9
14,3
5,3
4,8
Construction
8,5
7,6
7,1
7,0
6,7
Trade, Hotel and Restaurant
8,9
6,9
1,3
8,7
9,2
Transportation and Communication
14,0
16,6
15,8
13,4
10,7
Finance, Real Estate & Corporate Services
8,0
8,2
5,2
5,7
6,8
Services
6,4
6,2
6,4
6,0
6,7
Electricity, Gas and Water Supply
Sou r ce: Cen t r a l Bu r ea u of St a tist ics (BPS)
Rupiah Exchange Rate
In 2007, the rupiah exchange rate was relatively stable at Rp.9,136 per US dollar on the
average. The fluctuation followed strengtening trends in previous years. Until the third quarter
of 2008, rupiah exchange rate remained stable at Rp.9,051 to Rp.9,500 range per US dollar.
Entering the fourth quarter 2008, this exchange rate sufferred great pressure arising from
global economic slowdown as a result of global financial crisis and commodity price upheavals
in international markets. During such period, rupiah volatility showed upward trend and
ranged at Rp.9,500 to Rp.12,400 per US dollar. As of the end of 2008, the rupiah exchange
rate to US dollar was at Rp.9,678.3 per US dollar on the average implying a decrease of
around 5.9 percent to the last year’s rate.
Until quarter I 2009, depreciation to rupiah exchange rate continued and hit the lowest rate
on 6 March 2009 at Rp.12,065 per US dollar due to worries of spreading global financial
crisis. In gradual fashion, starting from Quarter II 2009, the rupiah exchange rate was
strengthening and reached Rp.9,985 per US dollar on 8 June 2009. This stronger rupiah
was supported with the bolstering economic foundations and balanced supply and demand
of foreign currencies in domestic markets. In addition, the amount of foreign reserves was
also to hike and yield of rupiah was relatively high if compared with peer countries that gave
positive signals to investors on the economic resilience of Indonesia against international
market turmoils. As of the end of 2009, rupiah exchange rate was at Rp.10,399 per US dollar
on the average or to decrease by 7.4 percent compared with previous year.
The intense inflow of foreign capital and proportional demands and supplies of foreign
exchange in domestic markets had maintained the stability of rupiah exchange rate during
2-6
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
2010. Rupiah, in quarter I, received great pressure from negative sentiment of market actors
against Greek’s fiscal deficit, which was worried to spread to other Europen countries.
However, with the bouyance of optimism on global economic recovery, the conditions of
economic foundations in Asian regions starting to improve marked with attractive rupiah
yields, and the influx of foreign capitals to domestic markets. Rupiah exchange rate to US
dollar in 2010 was at Rp.9,085 per US dollar on the average reflecting an increase of 12.7
percent higher than previous year’s average rate.
Positive trend of strengthening rupiah
GRAPH 2.5
exchange rate during 2010 continued in
RUPIAH EXCHANGE RATE TREND TO USD
2011. The ongoing economic recovery
2007 - 2011
Rp per US$
process in US and uncertain economic 12.500
recovery in Europe had forced investors 12.000
11.500
to switch their investments to emerging 11.000
10.399
10.500
markets,
including
Indonesia. 10.000
9.678
9.136
9.085
9.500
Competitive rupiah yield coupled with 9.000
8.779
higher Indonesia’s credit rating to 8.500
8.000
investment grade level became attractive
JFMAMJ JASONDJFMAMJ JASONDJFMAMJ JASONDJFMAMJ JASONDJFMAMJ JASOND
factors of investments and more foreign
2007
2008
2009
2010
2011
capitals entered to domestic markets. On
the average rupiah exchange rate in 2011 Source:: Bank Indonesia
was at Rp.8,779 per US dollar, indicating
an increase of 3.4 percent higher than average rate in previous year (see Graph 2.5).
To maintain the stability of rupiah exchange rate, the Government together with Bank
Indonesia continually attempted to improve the coordination and synergy of monetary, fiscal
and sector policies and prudent monetary policy introduction and tight supervision over
foreign currencies traffics. These policies were expected capable of maintaining the stability
of rupiah exchange rate and preventing excessive volatility and assuring the adequacy of
foreign exchange reserve to meet economic foundation requirements. Policy of maintaining
stable rupiah exchange rate was as anticipative measure to prevent sudden reversal that
might incite Asian economic crisis as once in 1997-1998. In addition, improved policy
coordination and more effective regulations and foreign currencies traffic monitoring were
maintained to fortify monetary policies. These policies were simultaneously applied by
accomodating more flexible rupiah exchange rate policy while paying attention to exchange
rates of currencies in neighboring regional countries so as to maintain rupiah competitiveness.
At international and regional level, commitment to accelerate economic activities was
exercised with the signing of agreement on financial sector to reinforce global and regional
economic recoveries.
Inflation
Inflation rates in Indonesia for the last few years are considerably subject to the volatility of
energy and food commodity prices in international markets. The volatility of such commodity
prices are due to disrupted production in producting countries by climate anomaly, natural
disaster and geopolitical conflicts. This disturbed production has exerted pressure to output
gap in international markets and in turn incite price turmoil of similar commodities in
domestic markets. Inflation rate in 2007 was relatively stable at 6.6 percent (yoy), which
Financial Notes and Indonesian Budget 2013
2-7
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
was consistent with stable prices of energy and food commodities in global markets. The
government policies in pricing were minimum. In 2008, the soaring energy and food
commodity prices in international markets had forced the Government to rise fuel price in
June 2008. The pressure of energy and food commodity prices at international and domestic
markets increased the inflation rate in 2008 at 11.06 percent (yoy) (see Graph 2.6).
In 2009, the inflation rate showed sharp
GRAPH 2.6
downturn to 2.78 percent (yoy), attributed
INFLATION TREND, 2007 - 2011
14%
mtm
to, among others, the plummeted prices 3,0%
2,5%
12%
yoy (RHS)
of international energy commodities,
2,0%
10%
especially crude oil. This condition forced
1,5%
8%
the Government to decrease the fuel price 1,0%
6%
by end of 2009 when the fuel price was 0,5%
4%
continually dropping since the end of 0,0%
2%
2008. The rise of prices for food and energy -0,5%
0%
J FMAMJ J A SONDJ FMAMJ J A SONDJ FMAMJ JA SONDJ FMAMJ J A SONDJ FMAMJ J A SOND
commodities in international markets in
2010 increased again the inflation rate
2007
2008
2009
2010
2011
until hitting 6.96 percent (yoy). Inflation
pressure came from external sources
generated additional burden to domestic inflation rate since in the same time, the domestic
markets experienced disrupted supplies of food and energy due to the immediate impacts of
a series of natural disaster in some production centers. This pressure had sparked price upsurge
for food and energy commodities in domestic markets and increased inflation in 2010.
Source: Central Bureau of Statistics
In 2011, pressure from external factors was to abate. On the other side, domestic production
was to rise coupled with improved distribution flow and stable rupiah exchange rate. Inflation
rate in 2011 was at 3.79 percent (yoy) because of lower inflation in food commodities. It
further decreased causing the largest deflation for the last 10 years to 0.32 percent (mtm) in
March 2011.
SBI-3 month Rate (Bank Indonesia Certificate) and SBN-3 Month Rate (Government Bonds)
In 2007, Bank Indonesia relaxed its monetary policies by lowering BI rate in phases consistent
with the decreasing interest rate for SBI-3 month. In 2007 SBI rate reached 8.04 percent on
the average. High inflation in the mid 2008 forced BI to increase BI rate with immediate
consequence of higher SBI-3 month rate hitting 9.47 percent on the average.
In 2009 when the inflation rate was to drop, BI rate decreased from 8.75 percent in early
year to 6.5 percent by end of year. With this declining BI rate, the average BI-3 month rate
was also to drop at 7.49 percent. This decrease continued until 2010 when reached 6.57
percent, even though Bank Indonesia maintained BI rate at 6.5 percent in the whole year.
The auction of SBI-3 month in 2010 was until October only as anticipation of BI against
sudden capital reversal, which was worried to spark excessive fluctuation of rupiah exchange
rate. The stoppage of SBI-3 month auction was expected to attract foreign capitals to
investment instruments with longer tenors.
With such SBI-3 month auction stoppage by Bank Indonesia, pursuant to the terms and
conditions, the Government must issue another bonds with auction system equal to SBI-3
month as basis in calculating the interest rate of Government Bonds (SUN) with variable
2-8
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
rate. In March 2011, the Government started to issue State Treasury Bill (SPN) with 3month tenor as basis to calculate the interest rate of Government Bonds (SUN) with variable
rate.
In the first auction in March 2011, 3-Month SPN rate reached 5.19 percent and thereafter
steadily to rise until hitting 5.44 percent in June. This upward trend was due to uncertain
global market compounded with the escalating issue of Greek’s debt crisis. In the next month,
the interest rate of 3-Month SPN was to decline until the lowest point in 2011, i.e. 3.75
percent in August. This decrease was mainly because of market optimism about Greek’s debt
crisis settlement through budget saving and IMF’s European Union assistance package (see
Graph 2.7).
Entering October 2011, the interest rate
of 3-Month SPN showed upward trend
until hitting the highest level in 2011 at
5.45 percent. This increase was primarily
due to operation twist policy of US that
encourage liquidity transition from
emerging market to US Treasury
instrument with long tenor. The said
Federal Reserve policy was a measure to
recover the economic conditions of USA
suffering fiscal crisis. In November 2011,
the interest rate of 3-Month SPN was to
plummet at lowly 4.47 percent.
GRAPH 2.7
3-MONTH SPN RATE TREND 2011
persen
6,0
5,5
5,47
5,19
5,0
4,5
5,44
5,19
5,02
5,23
4,88
4,0
3,5
4,63
4,81
4,72
4,47
4,18
3,75
3,0
Source: the Ministry of Finance
Additional assistance package for European crisis salvation, from €440 billion to €1.0 trillion
from European Financial Stability Facility (ESFS), brought positive sentiment to global and
domestic market. European Financial Stability Facility (EFSF) provided additional assistance
package for European crisis salvation leaving a total €1.0 trillion from previously €440
billion.
During 2011, the Government had offered 3-Month SPN for 15 times with interest rate 4.81
percent on the average. The interest of investors was relatively high as indicated with
oversubscribed during the offering. These enthusiastic investors were inseparable from robust
domestic economic foundation and sound fiscal management that would assure wellmaintained fiscal sustainability. Higher credit rating from international credit rating agencies
reflected the confidence of international communities to Indonesia’s economy. In the mid
December 2011, the Fitch promoted the position of Indonesia to Investment Grade level.
Indonesian Crude Oil Price
From early 2007 through the mid of 2008 the crude oil price at global markets indicated
significant increase. This soaring price was consistent with the increasingly global oil demands.
The average price of Brent crude oil in 2007 reached US$74.7 per barrel and further increased
to USD$96.7 per barrel in 2008. During 2008, Brent crude oil recorded upsurge in price and
hit USD$139.3 per barrel in June 2008. Approaching the second semester, the price of Brent
crude oil showed plummenting trend to US$41.8 per barrel in December 2008.
Financial Notes and Indonesian Budget 2013
2-9
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
In the next years, the crude oil price indicated a strengthening trend as a result of higher
crude oil consumption. For the last four years, the average global oil consumption was to
rise from 85.4 million barrel per day in 2008 to 88.0 million barrels per day in 2011. This
phenomenon was notably recorded in non-OECD countries following the recovering economy
of non-OECD countries in Asia, South America and Russia. Consequently, the crude oil
price at global level was steadily to rise until the end of 2011. Brent crude oil in 2009 was at
US$63.1/barrel on the average and further increased in 2010 to US$79.8/barrel. Thereafter,
the average price of Brent crude oil was constantly moving upward and hit US$111.3/barrel
in 2011. It was attributed to exceeding crude oil demands in Japan after the shutdown of
nuclear power plants around Japan following tsunami. (See Graph 2.8).
160
92
140
90
US$/narrel
120
88
100
86
80
84
60
Juta Barel/hari
GRAPH 2.8
INTERNATIONAL CRUDE OIL PRODUCTION, CONSUMPTION AND PRICE
TREND, 2007 - 2011
82
40
80
20
Konsumsi (RHS)
Produksi (RHS)
WTI
Brent
ICP
78
Jan
Feb
Mar
Apr
Mei
Jun
Jul
Ags
Sep
Okt
Nov
Des
Jan
Feb
Mar
Apr
Mei
Jun
Jul
Ags
Sep
Okt
Nov
Des
Jan
Feb
Mar
Apr
Mei
Jun
Jul
Ags
Sep
Okt
Nov
Des
Jan
Feb
Mar
Apr
Mei
Jun
Jul
Ags
Sep
Okt
Nov
Des
Jan
Feb
Mar
Apr
Mei
Jun
Jul
Ags
Sep
Okt
Nov
Des
0
2007
2008
2009
2010
2011
Source: Bloomberg & the Ministry of ESDM
The fluctuation of global oil price during such period was offset by global oil supply increase
especially from non-OPEC countries. The average global crude oil supply in 2008 recorded
85.3 million barrel per day and then increased to 87.0 million barrel per day in 2011. In
addition, geopolitical factor in Middle East and European debt crisis had considerably affected
the volatility of global oil price.
Indonesian Crude Price (ICP) was fluctuating to the global oil price trends, when in early
2007 oil price at global level increased significantly until the second half of 2008. The average
ICP rate during these two years reached respectively US$72.3 per barrel and US$97.0 per
barrel. After a drastic upsurge, the ICP then plummented until the lowest point for the last
four years at USD38.5 per barrel in December 2008. With the reviving global crude oil price,
the ICP in 2010 and 2011 indicated the same trends. Average ICP in 2010 was US$79.4 per
barrel, and increased to US$111.5 per barrel in 2011. It was due to the skyrocketing crude oil
demands especially for Minas, which was adopted as the main reference in setting ICP.
2-10
Financial Notes and Indonesian Budget 2013
I
9
5
2
7
0
3
0
2
0
2
0
8
6
0
7
0
3
0
5
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
Indonesian Lifting
The realization of Indonesian Lifting during
GRAPH 2.9
2007-2010 showed upward trends with
INDONESIA OIL LIFTING , 2007-2011
(thousand barrel per day)
average production of 899 thousand barrels
1000
per day in 2007. This lifting volume then
increased to 931 thousand barrels per day 900 950 899 927 931 960 944 965 954 945 899
in 2008, and steadily to rise for the next 800
two years from 944 thousand barrels per 700
day (2009) to 954 thousand barrels per day 600
(2010). This increasingly lifting was 500
reached after introducing a number of 400
2007
2008
2009
2010
2011
policies in oil sector including more
APBN-P Realization
equitable investment and funding policies, Source: the Ministry of ESDM
improved partnership system and
mechanism of business actors in oil and gas provision and usage, tax incentives, suspended
VAT payment, and import tax exemption for oil and gas equipment (see Graph 2.9).
In 2011, the realized lifting was to decrease to 898 thousand barrels per day. The contributing
factors of this declining oil production were diminishing natural production of the existing
oil fields compounded with license-related problems, overlap licenses and troubled lease-use
agreement with the related institutions, hampered floating facility procurement, and lots of
repair and maintenance works to production facilities following some occupational accidents
and extreme weather, such as the broken gas pipeline supplying team generator facility in
Duri field managed by PT Chevron Pacific Indonesia (CPI), burned production collection
facility of Lentara Bangsa used to store production of China National Offshore Oil Corporation
(CNOOC) in Jakarta bay and production platform collision of Pertamina Hulu Energi-West
Madura Offshore (PHE-WMO) in Madura strait. All of these had contributed in the loss of
oil production opportunity reaching around 40 thousand barrels per day.
2.2.3 Economic Projection in 2012
2.2.3.1 Global and Regional Economy
Entering 2012, the global economic performance moves with unpredicted changes. US
economy shows positive progress and heads to recovery direction. In the first quarter, the
US economy in 2012 records positive growth of 1.9 percent (yoy), with downward
unemployment rate until 8.2 percent as of May 2012. With such positive trend, US economy
is expected to grow by 2.0 percent (yoy).
At variance with USA, Europe starts to suffer recession with minus 0.1 percent (yoy) growth
during the first quarter 2012 or much lower than the performance of the fourth quarter
2012 recording 0.7 percent (yoy). The changing political constellation in some European
countries has threatened fiscal discipline and economic recovery around Europe. By end of
2012 the European economy is predicted to experience contraction by 0.3 percent.
Economic growths in China and India being the pillars of Asian growth are expected to
slightly slow down. In the first quarter 2012, China and India grow by respectively 8.1 percent
(yoy)and 5.3 percent (yoy) much lower than the records chalked up in the previous year. As
Financial Notes and Indonesian Budget 2013
2-11
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
of the end of 2012, China’s economy is predicted to grow by 8.0 percent (yoy) and India to
rise by 6.1 percent (yoy). This condition will bring impacts to other developing countries
being the trade partners of these two countries. In quarter I 2012, the Indonesian economic
is expected to grow by 6.3 percent (yoy), Malaysia 4.7 percent (yoy), Thailand 0.3 percent
(yoy), the Philippine 6.4 percent (yoy) and Vietnam 4.0 percent (yoy). (see Table 2.3).
TABLE 2.3
THE ECONOMIC GROWTHS OF COUNTRIES AROUND THE WORLD
2011 - 2012 (y-o-y, percent)
Country/Region
2011
2012
Q1
Q2
Q3
Q4
Q1
USA
Europe
Japan
Singapura
2,2
2,4
-0,2
9,1
1,6
1,7
-1,8
1,2
1,5
1,3
-0,5
6,0
1,6
0,7
-0,6
3,6
2,0
-0,1
2,8
1,6
China
India
Indonesia
Malaysia
Thailand
Phillipine
Vietnam
9,7
9,2
6,4
5,1
3,2
4,9
5,4
9,5
8,0
6,5
4,3
2,7
3,6
5,6
9,1
6,7
6,5
5,7
3,7
3,2
5,8
8,9
6,1
6,5
5,2
-8,9
4,0
5,9
8,1
5,3
6,3
4,7
0,3
6,4
4,0
Souce: Bloom berg
GRAPH 2.10
PURCHASING MANAGER'S INDEX (PMI)
65,0
60,0
55,0
50,0
45,0
Global
China
USA
Europe
Jun-12
Apr-12
Mei-12
Feb-12
Mar-12
Des-11
Jan-12
Nop-11
Sep-11
Okt-11
Jul-11
Agust-11
Jun-11
Apr-11
Mei-11
Mar-11
Jan-11
40,0
Feb-11
Based on the indicators of global economic and
trade activities during 2011 it is evident that
the global economy is to slump and this trend
is expected to continue in 2012. Purchasing
Manager’s Index (PMI) as the indicator of
supplies and prospective demands of people to
manufacture products records downward
trend. Until June 2012, PMIs for Europe and
USA still indicate contraction in manufacture
sector with index below 50, i.e. 45.1 and 49.7
respectively. Meanwhile, China’s PMI
experiences expansion 50.2 (see Graph 2.10).
Source: Bloomberg
Baltic Dry and IATA indices as indicators of transport service activities for the products relating
to international trading, which suffer decreasing trend since the mid of 2010 are expected to
continue in 2012. This decrease is due to, among others, lower global demands and uncertain
global and European economy. Until the mid of 2012, such indicators will remain weakening.
Baltic Dry index is to drop to 923 and IATA index to decrease reaching lowly minus 2.2 in
May 2012 (see Graph 2.11).
2-12
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
Global trade volume in 2012 is expected to
GRAPH 2.11
INTERNATIONAL TRADE INDICATOR
record low growth. Conditions and
4500
40
development in many countries will affect the 4000
35
30
global trade pattern during such period. It is 3500
25
20
understandable since the global trades are 3000
15
2500
10
considerably subject to international demands 2000
5
and purchasing power. The decreasing global 1500
0
-5
trade volume has been detected since 2011. It 1000
-10
-15
is obvious from the indicator of global trade, 500
Jan-10 Mei-10 Sep-10 Jan-11 Mei-11 Sep-11 Jan-12 Mei-12
which only grows 5.9 percent as a result of
Baltic Dry Index
IATA Index (RHS)
unrecovered European countries. Export and Source: Bloomberg
import volumes of developed countries in 2012
are also predicted to slow down by 2.3 percent (yoy) and 1.9 percent (yoy) respectively.
Meanwhile the volumes of exports and imports of developing countries are expected to reach
5.7 percent (yoy) and 7.8 percent (yoy) respectively. Subject to the existing conditions, the
global trade volumes are projected to grow by 3.8 percent in 2012 (see Graph 2.12 and
Graph 2.13).
GRAPH 2.12
GLOBAL TRADE VOLUME TREND (%)
15,0
10,0
GRAPH 2.13
EXPORT-IMPORT GROWTHS OF THE
DEVELOPED AND DEVELOPING COUNTRIES (%)
12,8
20
7,9
5,9
3,8
2,9
5,0
5,1
15
10
0,0
5
2007
2008
2009
2010
2011
2012*
2013*
-5,0
0
-10,0
-5
2007
2008
2009
2010
2011
2012
2013
-10,5
-15,0
-10
Trade Volume
Export
*) Projection
Source: WEO - IMF, July2012
Import
-15
Dev'd Country Export
Dev'd Country Import
Dev'ing Country Import
Dev'ing Country Export
Source: WEO-IMF, Juli 2012
On the other side, the prices of international commodities in 2011 recorded upsurge and
expected to decline in 2012. The higher prices of international commodities in 2011 were
attributable to less foreign supplies as a result of faltering global trade activities. The oil price
at global level was to rise by 30.6 percent with the prices of food and beverage commodities
to increase by 21.6 percent. These two commodities record price hike higher than in 2010.
The increase of commodity prices had forced global inflation rate in 2011 to reach 4.6 percent
(yoy), higher than previous year, which was only 4.2 percent (yoy).
The trends of commodity prices in international prices are expected to decline in 2012 as a
result of the slumping demands. It will exert pressure to inflation rate in 2012, which is
predicted to record 4.0 percent (yoy). However, geopolitical situation in countries supplying
world oil will be potential to raise the global oil price and global inflation rate (see Graph
2.14).
Financial Notes and Indonesian Budget 2013
2-13
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
Consistent with such conditions, the economic growth at global level in 2012 is predicted to
reach 3.5 percent (yoy), lower than previous year 3.9 percent (yoy). This global economic
downturn is due to slumping economy in developed countries and developing countries,
which are expected to grow by 1.4 percent (yoy) and 5.6 percent (yoy) respectively in 2012.
TABLE 2.4
GRAPH 2.14
COMMODITY PRICE INDEX AND GLOBAL
INFLATION TREND
GLOBAL COMMODITY PRICE FLUCTUATION
Oil
Food
Agriculture
Metal
250
6,00
200
5,00
2007
10,7%
15,1%
5,0%
17,4%
4,00
2008
36,4%
23,3%
-0,8%
-7,8%
3,00
2009
-36,3%
-13,1%
-17,0%
-19,2%
2010
27,9%
11,8%
33,2%
48,2%
2011
31,6%
19,4%
22,7%
13,5%
10,3%
-9,1%
-13,2%
-10,5%
-2,1%
n.a
n.a
3,0-3,5
150
5,03
100
4,35
4,19
4,45
3,13
50
3,98
2,00
1,00
0
2007
2008
2009
2010
*) WEO April 2012
**) WEO July 2012
Source: WEO-IMF, April & July 2012
2011
2012*) 2012**)
Global Inflation (%, yoy) (RHS)
Oil
Food
Agriculture
Metal
*)
2012
2012
**)
n.a
*) Est i m a t e W EO-A pr i l 2 0 1 2
**)
Est im a t e W EO-Ju l y 2 01 2
S ou r ce: IMF
2.2.3.2 National Economy
Economic Growth
Entering 2012 the impacts of global economic slowdown are expected to start affecting the
domestic conditions through exports. Since the mid of 2011 the exports shows downward
performance. However, with relatively high purchasing power of people and customers’
confidence, and responsive fiscal and monetary policies, domestic demands are predicted
capable of supporting GDP growth. In light of that, as of semester I 2012, the Indonesia’s
economy is to grow by 6.3 percent (yoy), slightly lower than performance in semester I 2011
reaching 6.4 percent (yoy). The economic growth for semester I 2012 is particularly supported
by sound performance of domestic demands, i.e. consumption and investments. Meanwhile,
external performance (net export) is still under pressure of lowering global demands. From
production wise, the growth is driven by agriculture sector, mining sector, electricity, gas
and water supply sector and construction sector.
In semester I 2012, the household consumption is to grow by 5.0 percent (yoy), higher than
the same period in last year, which only recorded 4.5 percent (yoy). This condition is due to
well-controlled inflation at low rate capable of enhancing the purchasing power of people.
Household consumption increase is supported by higher food and non-food consumption.
Food consumption grows by 4.0 percent and 5.8 percent for non-food consumption. The
role or distribution of household consumption is relatively high, i.e. 53.9 percent with
contribution share to growth 2.8 percent.
Meanwhile during the same period, government consumption grows by 6.5 percent (yoy),
higher than the growth recorded in semester I 2011 reaching 3.7 percent (yoy). This growth
is the highest rate since early 2011. It correlates with budget acceleration and absorption
program by the Government with the formation of Budget Expenditure Evaluation and
2-14
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
Supervision Team (TEPPA). The government consumption comes from material and
personnel expenditures, which grow by 9.6 percent and 2.7 percent respectively. The role or
distribution of government consumption remains small, i.e. only 8.0 percent with contribution
0.4 percent only.
Gross Fixed Capital Formation (PMTB) / investment also shows better performance in
semester I 2012, i.e. to rise by 11.2 percent (yoy), higher than last year’s performance of 8.3
percent (yoy). Nearly types of PMTB/investments positively grow, except for other
investments from domestic sources, which experience contraction. The main factors
contributing for PMTB/Investment growth are construction investment, foreign
transportation and other investments from overseas sources. Investments in construction is
to grow by 7.2 percent (yoy) consistent with widespread infrastructure development by the
Government following additional budget allocation for government capitals and the
continuation of MP3EI program. Investments on foreign transport modes are to hike by
46.4 percent (yoy) with the purchase of aircrafts by some Indonesian air carriers and trains
by PT KAI. The bolstering investments are also reflected from the realization of PMA-PMDN
(foreign – domestic) investments, which grow at 28.1 percent. Investments play leading
roles in economic growth by 32.3 percent with contribution 2.6 percent.
Export performance is stalled during I 2012 at 4.8 percent (yoy), lower than its performance
in semester I 2011 of 14.7 percent (yoy). The declined exports are followed with import
decrease in semester I 2012 when the import is to grow at 9.5 percent (yoy), much lower
than its realization in semester I 2011 of 14.9 percent (yoy). In nominal terms, total export
values of Indonesia amount US$96.8 billion or to grow negative 1.76% (ytd). Commodities
playing significant roles in non-oil and gas export are coals, CPO, rubber, and electronics.
Exports from manufacture sector still dominates total non-oil and gas exports by around 60
percent, followed by mining sector with 17.1 percent and agriculture sector for the remaining
portion. Countries as the main destinations of non-oil and gas export are China, Japan,
USA, India, ASEAN and South Korea. Meanwhile, in the same period, total imports of
Indonesia reach US$96.4 billion or to grow by 15.3 percent (ytd) with the main non-oil and
gas commodities of machines, electronics, and metal-steel. The majority of import commodities
comes from China, Japan, USA and South Korea. The overwhelming majority of Indonesian
imports (93 percent) consist of raw materials/supporting materials and capital goods, with
consumption goods of some 7.0 percent.
In terms of production, all economic sectors record positive growths in Semester I 2012. Of
nine economic sectors, four sectors chalk up higher growths than their realization in semester
I 2011, with the other sectors experience slowdowns or standstill. Five sectors recording
increases are: agriculture, livestock, fishery and forestry sector; mining sector; electricity,
gas and water supply sector; and construction sector. Trade, hotel and restaurant sector
achieves relatively unchanged performance. For sectors suffering slowdown they include
processing industry sector; transport and communication sector; finance, real estate and
corporate service sector; and service sector.
Agriculture sector in semester I 2012 is to grow by 4.0 percent (yoy), higher than its
performance in semester I 2011 of 3.6 percent (yoy). Great harvest season in this semester
has increased the growth of food crop farming sub-sector by 3.9 percent. Other sub-sectors
contributing the growth of agriculture sector are plantation sub-sector and fishery sub-sector
with respectively 4.4 percent and 6.2 percent growths. Meanwhile, forestry sub-sector is just
Financial Notes and Indonesian Budget 2013
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Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
to grow at dismal 0.4 percent. The role or distribution of agriculture sector is at the second
rank with 15.0 percent and contribution of 0.5 percent.
Processing industry sector in semester I 2012 grows by 5.5 percent (yoy), slightly lower than
realization in the same period of last year reaching 5.6 percent (yoy). This non-oil and gas
industry remains the main driving motor of industrial sector and grows by 6.1 percent (yoy).
Some industries contributing in the growth of non-oil and gas industries include food, beverage
and tobacco industry (growing by 7.0 percent); fertilizer, chemical and rubber made items
industry (growing by 5.6 percent); and cement and non-metal quarry materials industry
(growing by 6.9 percent). Processing industry sector is at the first rank to economic growth,
i.e. 23.6 percent with contribution 1.4 percent.
Trade, hotel and restaurant sector is to grow 8.6 percent (yoy) in semester I 2012, relatively
same as the last year’s period. This growth is mainly from large scale trade and retail subsector, which grows by 9.4 percent. Hotel sub-sector records 9.0 percent growth, same as its
performance in semester I 2011. Restaurant sub-sector is relatively stalled at 3.2 percent
growth. The growth of large trade and retail sub-sector is reflected from widespreas modern
retail shops. The roles of trade sector in economic growth reaches 13.7 percent with
contribution 1.5 percent.
Transport and communication sector in Semester I 2012 is to grow by 10.2 percent (yoy),
lower than the same period of previous year recording 12.1 percent (yoy). This growth is
supported with communication sub-sector growing at 12.5 percent (yoy) and transport subsector records 6.4 percent (yoy) growth. The negative trend since quarter II 2011 continues
in railways transport. This sub-sector suffers contraction (minus 8.2 percent). It is due to the
revocation of tickets for unseat passengers in business and economic classes. Transport and
communication sector plays role or distribution of 6.5 percent with contribution 0.98 percent.
In view of realization in semester I 2012, the economic growth in 2012 is expected to reach
6.3 – 6.5 percent (yoy), with supports from domestic demands i.e. consumption and
investments.
In 2012, public consumption is predicted to solidly grow at 4.8 – 5.0 percent, higher than its
realization in 2011 of 4.7 percent. This growth comes from higher real income of people as
reflected with revision to minimum wage rates (UMP) in some provinces and salary increase
of public servants and private employees. Stable inflation rate is also a contributing factor for
the well-maintained purchasing power of people. Various government-sponsored programs
will be instituted especially for low-income people. They are contained in MP3KI program
divided into 4 clusters, i.e. cluster 1 of schoolarship provision, health insurance (Jamkesmas)
for low-income peoples, rice for poor people (Raskin), Prosperous Family Program (PKH),
etc.; cluster 2 of community empowerment program (PNPM); cluster 3 of people’s business
credits (KUR); and cluster 4 of very affordable houses, low-cost transport, clean water for
people, low-cost and saving electricity, living condition improvements for fishermen, and
living condition improvement for people in urban outskirts. The Government also takes policy
to highten threshold of non-taxable income so as to increase the disposible income of people.
In addition, intensive infrastructure development by the Government and private companies
is expected to create more employment opportunities, and in turn augment the income of
people.
2-16
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
The Government consumption is expected to grow by 6.8 – 7.0 percent (yoy), much higher
than previous year, which only reached 3.2 percent (yoy). This Government consumption
growth stems from policy aimed at promoting effective budget expenditures. Generally
speaking, fiscal policy in 2012 is prepared with reference to Government Work Plan (RKP)
2012, i.e. to stimulate economic growth (fiscal stimulus) while maintaining fiscal stability
and sustainability.
Investments are expected to hit a double digit growth, i.e. 10.5 – 10.7 percent (yoy), higher
than performance in 2011 at 8.8 percent (yoy). Factors supporting investment growth in
2012 include the buoyed confidence of investors to Indonesia after the inclusion of this country
in investment grade category, well-maintained macroeconomic stability, increased
government capital expenditure especially for infrastructure projects. In addition, the
Government also provides PPh facility for capital investors as set out in Government
Regulation (PP) Number 52 of 2011 concerning the Second Revision to PP 1 of 2007
concerning The Provision of PPh Facility for Cetain Business Sectors and/or Certain Regions.
The provision of tax holiday tax is also applicable for capital investments in five pioneer
industries. Various policies to support such investments have been issued so as to enhance
legal certainty, which constitutes determinant factor for investors to make investments and
business expansion.
To establish more optimum APBN, Budget Expenditure Evaluation and Supervision Team
(TEPPA) has been established to supervise and evaluate the implementation of budget and
expenditures in individual Ministries/Agencies. It is expected that the expenditures and
implementation of budget be more focussed and timely according to the specified plan. Efforts
to improve budget spending and expenditure performance will be coupled with the issuance
of presidential regulation (Perpres Number 54 of 2010 as a measure to improve and accelerate
goods and services procurement by government institutions. TEPPA formation and Perpres
Number 54 of 2010 are not only directed to material expenditure and personnel expenditure
(government consumption components) but also to capital expenditure and government
investments (PMTB components).
From international trade aspect, the exports and imports are expected to grow by respectively
7.0 – 7.2 percent and 8.5 – 8.7 percent (yoy), implying a slowdown if compared with their
growths in previous year recording 13.6 percent and 13.3 percent (yoy) respectively. The
unrecovered global economy especially in USA and Europe will decrease demands on export
commodities from Indonesia through the main export destination countries of China, Japan,
and India. However, since the prices of non-oil and gas export commodities of Indonesia still
show upward trends, it is expected that pressure to Indonesia’s export is not so significant.
Consistent with such export conditions, the imports, which in majority consist of raw materials
and capital goods will also suffer a slowdown.
From production side, the economic growth of 6.3 – 6.5 percent in 2012 is particularly
supported by agriculture sector, processing industry sector, construction sector, and trade,
hotel and restaurant sector. Agriculture sector is expected to rise by 3.5 – 3.7 percent (yoy),
higher than the last year’s performance 3.0 percent. (yoy). As one of priority targets in food
resilience program, policies in agriculture sector will be directed: (a) to increase food supplies
especially paddy, corn, soybeans, sugar cane, meat and fish so as to achieve 10 million ton
rice surplus in 2014; (b) to improve the access of people to basic needs including the provision
Financial Notes and Indonesian Budget 2013
2-17
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
of reserves for food stabilization as anticipation of commodity price hike; (c) to enhance the
quality of food consumption; and (d) to provide rice reserve for the Government in case of
market operation and food shortages as a result of disaster. Various government programs
on agriculture will be continued, including non-energy subsidy consisting of (a) fertilizer
subsidy to meet the demands of farmers on fertilizer at affordable price, to increase productivity
and revitalize agriculture products, and support food resilience program; and (b) seed subsidy
to assist in the provision and distribution of quality seeds at affordable price through SOE
responsible for seedling.
Processing industry sector is expected to rise by 5.7 – 5.9 percent (yoy), lower than last year’s
growth, 6.2 percent (yoy). It is due to less exports. The development of industrial sector will
be focused on: (a) industrial revitalization (especially fertilizer and sugar) and other priority
industrial branches according to National Industry Policy (PP Number 28 of 2008);
(b) supporting MP3EI program; especially the development of 6 (six) economic corridors of
downstream oil coconut based industry cluster, general machine and equipment industry
cluster, and steel industry cluster; (c) supporting the acceleration of Papua, West Papua and
Nusa Tenggara Timur development with the provision of development facilities such as
cement industry, urea and petrochemical factories, salt processing industry, and small and
medium scale enterprises development, and seaweed processing; and (d) assisting in elevating
the competitiveness of domestic industries agains import products with promotion on the
consumption of national production by providing data on local contents of domestic industrial
products, SNI strenghening coupled with capacity building for metal testing infrastructure
in training centers and research and development centers and standardization, and the
promotion of oil coconut based industry branches (oleochemical) and oil and gas condesate
based industry branches. In addition, fiscal support will be provided consisting of tax subsidy
for strategic national industry development.
Construction sector is expected to grow at 7.6 – 7.8 percent (yoy), higher than last year’s
realization at 6.7 percent (yoy). This increase is supported by widespread property construction
of housing complexes and shopping centers in a number of regions. In addition, this growing
construction sector is attributed to intensive infrastructure development to be executed by
the Government for MP3EI program and additional capital expenditure budget allocated in
2012.
Trade, hotel and restaurant sector is projected to rise at 7.1 – 7.3 percent (yoy), implying a
decrease if compared with previous year’s performance reaching 9.2 percent (yoy). It is
because of lower exports and imports. The said growth is due to relatively well-maintained
purchasing power of people, sound performance demonstrated by industry sector, the
mushrooming retail trades in the society, and more domestic and foreign tourists. The relatively
crippled global economy has pushed to exporters to switch their export targets to domestic
markets.
Balance of Payment
Despite a slowdown and soaring prices of primary commodities in international markets
during 2007, the global economy demonstrates high growth. The performance of Indonesia’s
Balance of Payment (NPI) is subject to such conditions. In 2007, the NPI recorded enormous
surplus, i.e. US$12.7 billion. This surplus was from the surplus of current transaction reaching
2-18
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
US$10.5 billion and surplus of capital and financial transactions of US$3.6 billion. Compared
with the previous year’s realization, this current transaction surplus was a little bit lower, i.e.
by US$0.4 billion. As to capital and financial transaction surplus, it was higher by
US$0.6 billion. As a reflection of NPI surplus, the foreign exchange reserve was to rise by
US$56.9 billion as of the end of 2007. The worsening global financial crisis since September
2008 exerted significant pressure to NPI performance. In 2008, NPI recorded deficit of
US$1.9 billion, which was completely different from its performance in 2007 booking surplus
US$12.7 billion. However, the current transactions recorded surplus US$0.1 billion, despite
lower than surplus of 2007 (US$10.5 billion). Meanwhile, capital and financial transactions
made deficit US$1.8 billion after in 2007 recorded surplus US$3.6 billion. In light of foregoing,
the foreign exchange reserve was to drop to US$51.6 billion by end of such period.
Entering 2009, the performance of Indonesia’s Balance of Payment (NPI) either from current
transactions or capital and financial transactions improved from previous year. The former
recorded surplus US$10.6 billion attributed to balance of trade surplus. As for the latter, it
booked surplus US$4.9 billion coming from exceeding surplus of direct and portfolio
investments. In overall, this balance recorded surplus US$12.5 billion and the foreign
exchange reserve was to reach US$66.1 billion.
With the bolstering global and domestic economic prospects, the performance of balance of
payment in 2010 further improved, which was much better than previous year. It was due
to high export demands while the imports were also to rise. In addition, the inflow of foreign
capital, either direct or portfolio investments had enhanced this NPI performance. Current
transactions in 2010 recorded surplus US$5.1 billion, lower than 2009 reaching
US$10.6 billion. This decrease was mainly because of lower surplus of balance of trade and
higher deficit of balance of income. Capital and financial transaction in 2010 booked surplus
US$26.6 billion. This surplus was primarily from direct investments, portfolio investment
and other investments thanks to the relatively stable investment climate and macroeconomic
conditions. Based on the foregoing balance of payment, surplus US$30.3 billion was garnered
in 2010 and the foreign exchange reserve was to amount US$96.2 billion.
The decreased global demands and weakening commodity prices as negative impact of
European debt crisis had affected NPI performance in 2011 that amid such unfavorable
condition made surplus US$11.9 billion. The current transactions and capital and financial
transaction contributed to such surplus by respectively US$1.7 billion and US$14.0 billion.
The surplus of current transactions was from excellent export performance. The exports
recorded high growth despite crumpling global demands and commodity prices. Meanwhile,
the imports were steadily to rise as a response to the strong domestic demands. Surplus of
capital and financial transactions was from the inflow of direct foreign investment, portfolio
investments and withdraw of private foreign loans. This was supported with favorable
investment climate and stable macroeconomy. With such progress, foreign exchange reserve
was to increase from US$96.2 billion by end of 2010 to US$110,1 billion by end of 2011.
Year 2012 is opened with balance of payment deficit in quarter I 2012 amounting
US$1.0 billion, or better than deficit recorded in quarter IV 2011 of US$3.7 billion. This
improvement was from the inflow of foreign portfolio investments as a result of postive
perception to domestic markets. This condition has made capital and financial transactions
record surplus US$2.2 billion, after in the previous quarter booked decifit US$1.0 billion. On
the other side, current transaction in quarter I 2012 still suffers deficit US$2.9 billion, attributed
Financial Notes and Indonesian Budget 2013
2-19
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
to increased domestic demands that in turn promotes import activities. Meanwhile, the
weakening global economy exerts adverse pressure to Indonesian export performance.
However, better performance of balance of payment brings implication to foreign exchange
reserve, i.e. US$110.5 billion. The realization trends of Balance of Payment from 2007 to
Quarter I 2012 are presented in Table 2.5.
TABLE 2.5
BALANCE OF PAYMENT, 2007-2011
(US$ billion)
ITEM
2007
2008
2009
2010
2011
2012
Trw-I
A. CURRENT TRANSACTIONS
1. Blance of Trade
a. Export, fob
b. Import, fob
2. Services
3. Revenue
4. Transfer
B. CAPITAL AND FINANCIAL TRANSACTION
1. Capital Transactions
2. Financial Transactions
a. Direct Investment
b. Portfolio Investment
c. Other Investment
C. TOTAL (A+B)
D. NET CALCULATION DIFFERENCE
E. OVERALL
NERACA KESELURUHAN
BALANCE SHEET
(C+D)
(C+D)
Foreign Exchange Reserve
10,5
32,8
118,0
-85,3
-11,8
-15,5
5,1
3,6
0,5
3,0
2,3
5,6
-4,8
14,1
-1,4
12,7
56,9
0,1
22,9
139,6
-116,7
-13,0
-15,2
5,4
-1,8
0,3
-2,1
3,4
1,8
-7,3
-1,7
-0,2
-0,2
-1,9
51,6
10,6
30,9
119,6
-88,7
-9,7
-15,1
4,6
4,9
0,1
4,8
2,6
10,3
-8,2
15,5
-3,0
12,5
66,1
5,1
30,6
158,1
-127,4
-9,3
-20,8
4,6
26,6
0,0
26,6
11,1
13,2
2,3
31,8
-1,5
30,3
96,2
1,7
33,9
200,6
-166,6
-10,6
-25,8
4,2
14,0
0,0
14,0
11,1
4,5
-1,6
15,7
-3,9
11,9
110,1
-2,9
3,5
48,2
44,7
-2,0
-5,3
1,0
0,0
2,2
0,0
2,2
2,0
2,8
-2,6
0,0
-0,7
0,0
-0,3
0,0
-1,0
0,0
110,5
Source: Bank Indonesia
Rupiah Exchange Rate
Early 2012, the rupiah exchange rate was
GRAPH 2.15
again under pressure as the continuation
RUPIAH EXCHANGE RATE TREND TO USD , 2012
in quarter IV 2011. The pressure was from
Rp per USD
higher risks in European regions exerted
9.700
9.600
from uncertain economic recovery and
9.500
crisis management process in Greek, Italy, 9.400
Portugal, Spain and Ireland (GIPSI), and 9.300
9.200
indication of economic downturn in
9.100
China, India and Brazil, which thus far 9.000
become main driving motors of 8.900
international economy. Moreoever, the 8.800
Jan-12
Feb-12
Mar-12
Apr-12
Mei-12
Jun-12
reviving US economy has incited flight to
quality, which increases pressure to
regional currencies. Some sources of this pressure have hampered the non-resident fund
flows to domestic financial instrument. Consequently rupiah exchange rate is weakening
Source: Bank Indonesia
2-20
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
consistent with the plummeting regional currencies to US dollar. During two quarters in
early 2012, rupiah tends to weaken at Rp.9,203 per US dollar on the average or depreciated
by 5.21 percent if compared with its average rate during the same period in 2011. Owing to
strong economic foundation coupled with positive economic growth outlook, the inflation
rate is relatively controllable with adequate foreign exchange reserve and higher rating of
Indonesia. These indicators are expected capable of maintaining the stability of rupiah
exchange rate along 2012. However, amid this optimism buoyance the Government and
Bank Indonesia need to take attention on global economic recovery process, especially in
Europe, and the increasingly prices of food and energy commodities in international markets.
With such progress, rupiah exchange rate in 2012 is expected at Rp.9,250 per US dollar on
the average.
Inflation
GRAPH 2.16
INFLATION TREND
2011 - 2012
1,0%
mtm
yoy (RHS)
8,0%
0,8%
7,0%
0,6%
6,0%
5,0%
0,4%
4,0%
0,2%
3,0%
0,0%
2,0%
-0,2%
1,0%
-0,4%
0,0%
Jan
Fe b
Mar
Apr
Me i
Jun
Jul
Ags
Se p
Okt
Nov
De s
Jan
Fe b
Mar
Apr
Me i
Jun
For the first six months in 2012, inflation
rate is relatively controllable consistent with
minimum Government policies in prices
and well-maintained food and energy
supplies. Despite no deflasion as happened
in previous year, inflation rate during such
first six month period in 2012 is well
controlled. Cummulative inflation rate as of
June 212 is at 1.79 percent (yth), slightly
higher than the same period in previous year
at 1.06 percent (yth). On annuity basis,
inflation rate as of June 2012 is 4.53 percent
(tyh), lower than in the same period of
previous year, i,e, 5.54 percent (yoy).
2011
2012
Source: BPS
Jan
Feb
Mar
Apr
Mei
Jun
Jul
Ags
Sep
Okt
Nov
Des
Jan
Feb
Mar
Apr
Mei
Jun
Until semester I 2012, the prices are
GRAPH 2.17
generally controllable, except for rice, which
INFLATION TREND BY COMPONENTS ,
shows increase since early 2012. In terms of
2011 - 2012 (yoy)
components forming inflation, through 20%
Inti
18%
Volatile
June 2012, component inflation of volatile 16%
Administered
foods reach highest rate following price hikes 14%
12%
of rice and spices commodities in domestic 10%
8%
markets. In June 2012, the annual inflation
6%
4%
of volatile foods component reaches 7.52
2%
percent (yoy), implying a decrease if
0%
compared with the same period in previous
year, i.e. 8.57 percent (yoy). Rise in rice price
2011
2012
is sparked by worries about scarcity of Source: BPS
national rice supplies from domestic sources
as the impacts of exceeding agriculture land conversion to non-agriculture purposes.
Meanwhile, the anxieties of shortage of spices (chilli, onions and garlics) relate to horticulture
importation policy that increases prices of spices in domestic markets.
Financial Notes and Indonesian Budget 2013
2-21
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
Meanwhile, the components of core inflation are 4.15 percent (yoy), which is lower if
compared with the realization during the same period of previous year reaching 4.63 percent
(yoy). Worries about economic recovery process in European regions and geopolitical conflict
settlement in Middle East have exerted pressure from external factors (imported inflation).
To reduce such pressure and high inflation expectation of people, the Government along
with Bank Indonesia continually forge synergy to maintain the stability of rupiah exchange
rate. In addition, the acceleration of transport facility and infrastructure development through
MP3EI initiative is expected capable of improving regional distribution flows (intra-island
and inter-island).
Inflation component of administered prices reaches 2.90 percent (yoy), or lower than the
rate of same period in previous year, 5.61 percent (yoy). This relatively low inflation
component is due to minimum changes of Government policy on price setting, especially
the cancellation of price rise for subsidized fuel per 1 April 2012.
By expenditure groups, food group, clothing group and processed food group are the main
three groups sparking increase of annual inflation, On annuity basis, as of June 2012, food
group records inflation 7.19 percent (yoy) following price hike of staples in domestic markets.
Clothing group also makes an increase of 6.06 percent (yoy) mainly contributed by gold
price fluctuation in international markets. Meanwhile, food group records an increase of
5.39 percent (yoy). As to other expenditure group, it is relatively stable.
Inflation rate in semester II 2012 is expected to experience a little bit pressure. The source of
pressure that should cause concern includes from seasonal factors such as tuition fees during
the start of academic year and price hike of staples during the observance of religious days
(e.g. fasting month, Ied-dul Fitr, Christmast and New Year). From external side, inflatory
pressure is shadowed by worries about price turmoils of food and energy commodities and
the prospect of international economic recovery as the impacts of occuring financial crisis in
Europe. In this respect, the Government attempts to secure food stocks and supplies and
maintain well-advanced food distribution flows to curb inflation rate in semester II 2012. In
view of the foregoing factors and inflation realization as of June 2012, according to outlook
of APBN 2012 Implementation Report for Semester I inflation rate in 2012 is assumed at
4.8 percent.
3-Month SPN Rate
During semester I 2012, the 3-month SPN rate is fluctuating. In the first offering in 2012,
the rate of this 3-month SPN was at 3.87 percent or lower than average rate in 2011 reaching
4.81 percent. This decreaseing rate is continuing until early February when hit the lowest
rate, i.e. 1.69 percent. This signficant decrease is mainly due to buoyed confidence of investors
with the inclusion of Indonesia in investment grade level by Fitch in the mid of December
2011 and Moody’s in the mid of January 2012.
In the next months, the interest rate suffers pressure and reaches 3.08 percent during offering
of 20 March 2012. This higher interest rate is attributed to inflation expectation from
subsidized fuel price increase plan to be exercised in April 2012. Investors prefer to take wait
and see stance. The subscription is then to decrease. The pressure continues in April from
negative sentiment to the limitation of subsidized fuel consumption.
2-22
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
Through June 2012, the Government has offered 3-Month SPN for 9 times with average
interest rate of 2.87 percent. The interest rate of 3-month SPN is subject to both external and
internal factors. The external factors include capital inflows, global interest rate, and prices
of international commodities. Pressure to the interest rate is basically from sentiment arising
out of prolonged crisis in Europe. Uncertain economic conditions of Europe is magnified
with the demotion of debt rating of Greek and Spain banks aggravated by no government in
Greek. Meanwhile, the maturity date of Greek’s debts is in June 2012. As to internal factors
they come from expectation to the inflation. Given the above external and internal factors,
the interest rate of 3-month SPN in 2012 is projected at 3.9 percent range on the average.
US$/barel
US’ Energy Information Agency
GRAPH 2. 18
estimated that oil consumption at
GLOBAL CRUDE OIL PRODUCTION, CONSUMPTION AND
PRICE TREND 2012
global level in 2012 would grow by
140
93
0.8% with the global oil supply to rise
92
120
91
100
higher, i.e. 2.1%. International
90
80
89
Monetary Fund (IMF) in World
88
60
87
Economic Outlook (WEO) of July
40
86
20
85
2012 has revised the economic growth
0
84
in 2012 to 0.1%. With such
Jan
Feb
Mar
Apr
Mei
Jun
Production (RHS)
Consumption (RHS)
WTI
Brent
ICP
plummeting global oil demand, crude
oil Brent in 2012 is predicted at
US$106.3 per barrel or a little bit
decline from its average in 2011 reaching US$111.3 per barrel.
million barrel/day
Indonesian Crude Oil Price (ICP)
Source: Bloomberg & the Min/ EDSM
The Indonesian crude oil price in 2012 is projected high. As of the first six months in 2012,
the ICP records US$117.3 per barrel on the average implying an increase if compared with
previous year’s performance, i.e. US$111.0 per barrel. With such progress, the oil price in
2012 is estimated to amount US$110.0 per barrel on the average (see Graph 2.18).
Indonesian Lifting
The realization of oil lifting in semester
I 2012 (December 2011 – May 2012)
reaches 868 thousand barrels per day,
slighly lower than the same period of
last year reaching 879 thousand
barrels per day. Oil lifting in 2012
(December 2011 – November 2012)as
indicated in the outlook of APBN
2012 Implementation Report for
Semester I is predicted to reach 900
thousand barrels per day (see Graph
2.19).
Financial Notes and Indonesian Budget 2013
GRAPH 2.19
INDONESIAN OIL LIFTING TREND 2012
(million barrel/day)
1200
1000
968,4
800
884,4
862,2
860,8
842,9
Feb-12
Mar-12
Apr-12
Mei-12
790,5
600
400
200
0
Des-11
Jan-12
Source: the Ministry of ESDM
2-23
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
2.3 Challenges and Targets of Macroeconomic Policies in
2013
2.3.1 Global and Regional Economic Challenges
Global economic conditions in 2013 are predicted to be better than its situation in 2012. This
prediction stemps from global economic indicators and development in some countries
demonstrating positive trends during the first semester 2012, notably USA and Japan.
However, this global economic recovery process in 2013 remains under glooming shadow of
uncertain economic revival in Europe.
After recording slowdown in 2012, global economy in 2013 is projected to grow by 3.9 percent
(yoy). This is attributed to higher growths in both developed and developing countries by
respectively 1.9 percent and 5.9 percent. Out of regions around the world, the developing
countries in Asia will record the highest growth with 7.5 percent.
The reviving global economy will be
GRAPH 2.20
coupled with the bolstering trade
ECONOMIC GROWTH AND GLOBAL TRADE
activities across the world, which is
VOLUME TREND (yoy)
12,8%
expected to rise by 5.1 percent, or 14%
higher than previous year of 3.8 12%
percent (see Graph 2.20). These 10%
5,9%
active trade activities are evident both 8%
5,1%
3,8%
in developed and developing countries, 6%
4%
5,3%
however the margin of export-import
3,9%
3,9%
3,5%
2%
activities will be more significant in 0%
industrial
countries.
It
is
2010
2011
2012
2013
Global Eco. Growth
Trade Vol. Growth
understandable since the recession
pressure is more perceived in developed Source: WEO-IMF, July 2012
countries. Their economic recovery
will increase demands and intensify economic and trading activities. Export and import of
developed countries in 2013 is expected to rise by 4.3 percent and 4.2 percent respectively, or
higher than previous years of 2.3 percent and 1.9 percent respectively. In the mean time,
exports in developing countries in 2013 are projected to grow by 6.2 percent or higher than
5.7 percent of previous year’s performance. The imports of developing countries will slightly
decrease, i.e. from 7.8 percent in 2012 to 7.0 percent in 2013.
Global economic recovery in 2013 is expected to face challenges arising from the relatively
high government debts in European regions. These exceeding debts will hamper stimulus
attempts required by the countries in such region. In addition, investments and capital inflows
will not be fully recovered as the impacts of credit rating degradation for some European
countries in 2012.
The potential risks against global economy include price fluctuation of global energy
commodity. For the last few years, the price of global crude oil commodity shows grave
fluctuation. Unbalanced supply and demand compounded with speculation and geopolitics
have soared the price of global crude oil to exceeding rate. While it is then decreasing, this
unmanageable fluctuation can disrupt economic stability and spark negative sentiment in
various countries including Indonesia.
2-24
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
Such potential upheavals can hamper global economic recovery process that in turn disturb
domestic economic conditions and the implementation of development program. Pressure
on global demands will become barrier to Indonesia’s export performance. Meanwhile, any
turmoil in capital traffic in global markets will shatter the stability of exchange rate and fund
inflows to the domestic markets.
2.3.2 Domestic Economic Challenges
Apart from external challenges, some problems will arise from domestic side. The first domestic
challenge concerns with high fuel consumptions. Exceeding fuel consumptions are the logical
consequence of increased income and better purchasing power of people and intensifying
economic activities. The problem will raise if this increased consumption is not followed with
more oil production. Consequently, oil import must be opened and APBN subsidy will be
necessary to cover the disparity of buying price of oil in international markets and selling
price of fuels in domestic markets. Amid uncertain global economy, the price of global price
tends to rise and fuel subsidy in APBN will swell up. This can disrupt fiscal sustainability and
in turn may aggravate national development process. In this respect, challenges to cope
with are needs of breakthrough to encourage energy saving in domestic fuel consumption
and diverification on the use of non-fuel energy sources. In this context, APBN 2013 the
Government proposes the inclusion of gas lifting asumption as alternative instrument in lieu
of fuel.
The second challenge concerns infrastructure development. In 2013, infrastructure
development has been set as one of priority national development program and directed to
reinforce the competitiveness of real sector to bolster climate, which is conducive for
investment and business. Reinforcing the competitiveness of real sector will require smooth
domestic product distribution to various regions. Well-managed distribution network and
inter-region traffic will lessen pressure of price disparity. It will also support the realization
of economic scale and enhance production efficiency. Under this context, national connectivity
acceleration will become another challenge.
To address such challenges, the development policies in 2013 will be directed to accelerate
infrastructure development in transporation sector in order to establish an integrated
transportation infrastructure networks at national level capable of connecting various regions
throughout the country. Infrastructure development will be supported with national
information system strengthening using technology consisting of broadband infrastructure
network that will be able to connect all regions in Indonesia into a national optical fibre
network.
Another challenge is inadequate energy support causing inequal distribution throughout
Indonesia and overal social components. Needs on energy supply, especially electricity are
mounting in line with the ever-increasing production activities and national economy. To
date, the national electrification is just 72.95 percent with ratio of electrified villages
92.58 percent.
In addition, there are some problems relating to infrastructure development to support energy
self-contain program, including: (a) energy mix, which to date has yet to give optimum
results, (b) limited national energy supplies, either in terms of quantity and quality, and their
reliability, (c) foreign domination over national technology and exceeding financing,
Financial Notes and Indonesian Budget 2013
2-25
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
(d) regulations that must be further improved to follow the latest energy development and
must be consistently followed with technical policies in the field, (e) needs of revising pricing
policy, (f) needs of enhancing energy efficiency and conservation, and (g) lack of local
government participation in energy provision for their citizens.
For infrastructure development financing scheme under Public Private Partnership (PPP)
its realization to date is relatively minimum. Some challenges to be dealt with in 2013 with
regard to this PPP include: (a) reluctance of ministries/agencies or regional governments to
allocate budget for the preparation and transaction of PPP projects, (b) low commitment of
Government Contracting Agency (PJPK) in PPP projects. Some PJPK officials switch PPP
projects to government projects under APBN and PHLN and assignment to SOEs, and
(c) projects proposed for PPP scheme consisting of non-priority projects with low financial
feasibility.
Lastly, with regard to Indonesian Economic Development Acceleration and Expansion Master
Plan (MP3EI), since its launching to end of December 2011, groundbreaking had been made
to 94 investment projects in real sectors and infrastructure development with total investments
Rp.499.5 trillion. In 2012 it is planned to conduct groundbreaking for 84 investment projects
in real sector and infrastructure development totalling Rp.536.3 trillion.
In view of the realization of infrastructure projects under MP3EI in 2011 and 2012, it implies
that in 2013 more infrastructure projects should be executed under MP3EI. However a
challenge that should cause concern is that of certainty and facilitation in land acquisition.
The past experience in MP3EI infrastructure projects implied the needs of deregulation on
land acquisition affairs.
2.3.3 Macroeconomic Policy Targets in 2013
Macroeconomic policy in 2013 will be focused on national development theme for 2013 as
mentioned in the Government Work Plan (RKP) 2013, i.e. “Reinforcing Domestic Economy
for People’s Welfare Augmentation and Expansion”. This RKP theme is further elaborated
into 4 (four) strategic issues, i.e.: (a) to fortify the competitiveness, (b) to buttress economic
resilience, (c) to augment and expand people’s welfare, and (d) to strengthen social political
stability. Within this framework, the basic assumptions of macroeconomy adopted as
reference for the preparation of APBN 2013 are planned as follows: (a) economic growth
6.8 percent, (b) rupiah exchange rate Rp.9,300/US$, (c) inflation rate 4.9 percent,
(d) 3-Month SPN bond 5.0 percent, (e) oil price US$100/barrel, and (f) oil and gas lifting
2.260 million oil equivalent barrels.
2.3.3.1 Economic Growth
One development target set in RKP 2013 is to assure higher national economic growth in
2013 when the global economy is anticipated to start recovering. This recovery will bring
about positive impacts to global trade volume that will increase indirectly demands on export
goods by some countries being the export destinations of Indonesia. Better coordination of
fiscal, monetary and real sector policies are expected capable of curbing inflation at stable
rate that in turn will elevate the purchasing power of people and augment public
consumptions. These higher export volumes and public consumptions will enhance investment
and import performance.
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Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
In view of macroeconomic policies and
external-internal environment, the
economic growth in 2013 is projected
to record 6.8 percent (yoy). This growth
is supported with public and
government consumptions and PMTB/
investments. From production side,
agriculture sector, processing industry
sector, construction sector, trade, hotel
and restaurant sector and transportation
and communication sector will remain
the primary driving motors for
economic growth.
%, yoy
8
Chapter 2
GRAPH 2.21
INDONESIA'S ECONOMIC GROWTH ,
2010 - 2013
6,8
7
6,2
6,5
6,3-6,5
2011
2012*
6
5
4
2010
*) Estimate
Source: BPS & Min. Finance
2013*
Fundamental change to the economic growth in 2013 concerns with potential shifting of the
primary driving motors of economic growth. It is expected that in 2013 investments will be
the primary driving motors in promoting Indonesia’s economy. It is obvious from the
contributions of investments in 2013, which record enormous increase much higher than
public consumption’s contribution. The latter is always the largerst contributor for economic
growth. However in 2013 its role will be replaced by Investments/PMTB.
Sources of Economic Growth by Expenditures
According to agreement between the Government and Parliament (DPR) during preliminary
discussion of RAPBN 2013, the target economic growth in 2013 is set at 6.8 – 7.2 percent.
Due to national and international economic growths as of semester I 2012, the target economic
growth for 2013 is predicted to reach 6.8 percent. This growth will be achieved through
public and government consumption increase, and investment performance improvement
(see Table 2.6).
TABLE 2.6
ECONOMIC GROWTH BY USE 2012 - 2013 (percent, yoy)
2012 *
2013 *
Public Consumption
4,8 - 5,0
4,9
Gov ernment Co nsumptio n
6,8 - 7 ,0
6,7
10,5 - 10,8
1 1,9
Ex po rt
7 ,0 - 7 ,2
1 1 ,7
Minus Import
8,5 - 8,7
1 3,5
PDB
6,3 - 6,5
6,8
Use
PMTB (Inv estment)
*Est im a t e
Sou r ce: t h e Min ist r y of Fin a n ce
Public consumption is predicted to rise by 4.9 percent (yoy). The relatively stable inflation
rate is expected capable of maintaining purchasing capacity of people that will boost this
Financial Notes and Indonesian Budget 2013
2-27
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
public consumption. Some government expenditure policies have been directed to maintain
such purchasing capacity of people, including: (a) the payment of the 13th salary and pension
and the increase of basic salary and pension for public servants/Armed Forces – Police (PNS/
TNI-Polri), and the increase of salary for judges; (b) social program improvement and
expansion, i.e. operational assistance for schools (BOS), schoolarship for students and
universtity students of low income households, prosperous family program (PKH), pro-people
program strenghtening for cluster 4 as prescribed in Poverty Alleviation Acceleration and
Expansion Master Plan (MP3KI); and (c) continuing community empowerment program
through PNPM Mandiri. Besides, policy of increasing the limits for non-taxable income
(PTKP) is expected to give incentive for higher purchasing capacity of people. Efforts to
bolster people’s purchasing capacity are aimed at maintaining public consumption with some
policies: (a) to maintain the price stability of domestic goods, notably to meet the basic
needs; (b) to empower small and medium scale enterprises; (c) to improve goods supply
flows including the distribution system to assure their supplies, especially commodities for
basic needs; and (d) to enhance domestic business climate so as to expand business
opportunities and to protect national customers.
Government consumption is expected to grow by 6.7 percent (yoy). This growth comes
from increase in personnel and material expenditures. In 2013 the personnel expenditure
policy will include: (a) to increase the basic salary of PNS/TNI-Polri and of judges,
(b) to continue the payment of the 13th salary, (c) to accommodate budget requirements for
K/L (Ministries/Agencies) remuneration for bureaucracy reform, and (d) to restructure the
number and distribution of PNS personnel with reference to zero growth and competency
based mechanism. Material expenditure policy is (a) to maintain well-advanced governance
operation to enhance quality of public service delivery, (b) to enhance efficiency and
effectiveness of material expenditure through flat policy for office operational goods
procurements, efficiency in the expenditures of duty travels, seminars and working committee
meeting, maintain the allocation according to the needs in view of the expected output and
budget capacity with the introduction of reward and punishment, and (c) to maintain state
assets with routine maintenance to roads/bridges/other infrastructure assets, and capacity
building to support national development programs. In addition, the Government will continue
Budget Expenditure Evaluation and Supervision Team (TEPPA) tasked to supervise and
evaluate the implementation of budget and expenditure in K/L to be more guided and timely.
This effort will be coupled with more transparent goods and service procurement process
under Perpres Number 54 of 2010.
Investment/PMTB (Gross Fixed Asset Formation) is estimated to rise by 11.9 percent (yoy).
The Government gives supports to any initiative of improving investment and business climate
with the inclusion of this strategic issue as a priority target in RKP 2013. The bolstering
investment climate and ease of doing business are carried out by a number of activities such
as: (a) the development of electronic investment information and licensing service system
(SPIPISE) with target of developing 1 capital investment master data package, regional
one-stop integrated service instruments (PTSP) connected to SPIPISE (50 districts/cities),
the development of 1 Geography Information System (GIS) package and data recovery
center (DRC), and provinces and districts/cities following socialization and training
(60 districts/cities); (b) regional economic growth improvement with targets of 530 provinces/
districts/cities establishing one-stop integrated services (PTSP), the application of electronic
investment information and licensing service system (SPIPISE) by regional PTSP
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Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
(256 province/districts/cities), 318 provinces/districts/cities capable of reducing business costs;
(c) the development of trade distribution facilities with targets of developing pilot markets
(23 units) and distribution centers (3 units), (d) export and import facilitation management
with targets of issuing export-import facilitation policies (2 regulations), developing electronic
system for public service facilitation (2 activities), 4000 companies using online
export/import licenses served through INATRADE application, 5 activities of technical
assistance in trade facilitation affairs, 60 coordination activities in trade facilitation,
17 participation activities in domestic and overseas meeting on trade facilitation, and
5 evaluation reports of the implementation of monitoring to trade facilitation with regard to
automatic issuance of origin notices (SKA) (850 thousand SKA notices); (e) facilitation for
public-private partnership investment acceleration with targets of masterplan proposals for
5 infrastructure projects under PPP schemes, 1 infrastructure investment package to support
Indonesian economic corridor, facilitation of 5 infrastructure projects ready to offer to
investors, and 10 marketing activities of ready for offer infrastructure projects.
The investment growth is also supported by improved APBN structure that will further
encourage the quality of Government expenditures. In 2013, the Government plans to refine
expenditure budget allocation in a manner that will be capable of pushing economic growth
to higher level. With such policy, the Government expects on additional funds for allocation
as capital expenditure especially for infrastructure development.
Meanwhile, investment climate and business facilitation improvement will be focused on
(a) simplifying and accelerating investment and business procedures, (b) simplifying
regulations in project implementation, (c) enhancing national logistic system efficiency
through expanded national single window (NSW), (d) developing special economic zones
(KEK) in economic corridors benefiting geoeconomy and geostrategic advantages, and
(e) improving manpower climate and strengtening industrial relationship institution.
This investment growth is also due to infrastructure development acceleration to improve
domestic connectivity. The sustainability of MP3EI program focusing on infrastructure
development is expected to be a driving motor in this investment performance. In addition,
investment grade rating attached to Indonesia since 2011 will be potential to attract more
investors to make their investment in this country. The contribution of investments in 2013
is predicted to replace the position of public consumption as the main contributor for economic
growth of Indonesia. In 2013, the investments are expected to give contribution 3.03 percent
to national economic growth, which is higher than public consumption contribution of 2.69
percent. The sources of investments are from foreign and domestic investment (PMA/PMDN)
realization, government capital expenditures, capital expenditures (capex) of SOEs, retained
profits, and bank loans.
From international trade aspect, export-import performance records growths of respectively
11.7 percent (yoy) and 13.5 percent (yoy). The condition of global economy in 2013 is predicted
to recover. With such reviving global economic growth, the global trade volume will increase
that will indirectly promote Indonesia’s export to some countries being the export destinations.
With such export performance improvement, the import will be also to rise. The import of
capital goods and raw materials is necessary to support investment activities and production
sector. Meanwhile, some public consumption still needs of import consumption goods, despite
small percentage.
Financial Notes and Indonesian Budget 2013
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Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
The focus of export policy is divided into 3 (three) aspects, i.e. (1) export market diversification
consisting of (a) enhancing the quality of export promotion and institution, (b) developing
export market and information, (c) improving the roles and capacity of international trade
diplomacy, (d) fostering cooperation and negotiation at ASEAN region, (e) reinforcing bilateral
cooperation and negotiation, and (f) intensifying promotion and image; (2) enhancing the
quality and diversity of export products by (a) developing creative export and economic
products, (b) establishing trade standardization, (c) developing human resources in export
affairs, and (d) intensifying coordination for export promotion and development; and
(3)improving export facilitation by (a) supporting trade sector with the development of special
economic zones, (b) export and import facilitation management, (c) market acess security
and protection, (d) international and regional trade facilitation development, (e) policy
formulation and development on customs and excise information technology, (f) policy
formulation and technical assistance for customs facilitation, (g) coordination for the
development and introduction of national single window (NSW) sysem and ASEAN single
window (ASW), (h) coordination for economic and financing cooperation with Europe, Africa
and Middle East, (i) coordination on economic and financing cooperation in Asia, and
(j) coordination on regional economic and financing cooperation (ASEAN and APEX).
Economic Growth by Sector
In terms of production, all sectors will demonstrate better performance than 2012. Agriculture
sector, processing industry sector, construction sector and trade, hotel and restaurant sector
will remain the main contributors for GDP growth.
Agriculture sector in 2013 is projected to grow by 3.7 percent, This sector will be improved by
strengthening national food resilience to reach the target of 10 million ton rice surplus in
2014 and to increase the production of other commodities, food diversification and price
stabilization of domestic foods, and welfare augmentation of farmers and fishermen. Food
resilience policies include: (a) increasing food production notably to reach 10 million rice
surplus per year starting from 2014, and fishery production of 22.39 million tons in 2014;
(b) price stabilitation especially for domestic foods, i.e. rice; (c) strengthening local resources
based food diversification; and (d) farmer protection and empowerment and farmers’ welfare
augmentation. As a strategic issue in food resilience, some activities to pursue 10 million
tons rice surplus will include: (a) the provision and development of crop farm, horticulture
and plantation statistics with target of 100 percent data and information of farmer households,
agriculture commodities, small-scale farmers and farm land distribution in 2013 put in place;
(b) agriculture land expansion and management with targets of 100 thousand has of paddy
fields established, 16,238 ha of horticulture/planation/livestock farming areas, 146,770 ha
of lands optimized, converted, rehabilitated and reclaimed, and 200 thousand ha of lands for
system of rice intensification; (c) irrigation water management for agriculture with targets
of 524,084 ha for water network development and optimalization (with irrigation network
development/rehabilitation at farmer level (JITUT), village irrigation network (JIDES), and
micro water management (TAM) to support food crops, horticulture, livestock and plantation,
institutional development for 710 units of Water User Association (WUA) (with WUA
empowerment and participatory irrigation development) to support food crops, horticulture,
livestock and plantation, 485 thousand hectares of optimized tertiary irrigation networks
(JITUT, JIDES and TAM); (d) cereal farming production management with targets of 4,625
thousand hectares of integrated cropping management field schools (SLPTT) for paddy to
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Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
reach productivity 0.3 – 1 ku/ha, 260 thousand ha of SLPTT for corns to reach productivity
0.3 ku/ha;(e) food crop seed provision system management with targets of 112,625 tons
superior seed assistance (BLBU) for paddy, 3,900 tons BLBU for corns, 18,200 tons BLBU
for soybeans, 13 thousand ha of seed nursery; (f) subsidized fertilizer distribution, with targets
of 7.3 million tons of subsidized fertilizer; and (g) the development and management of
irrigation networks, marsh areas and other irrigation networks with targets of 482,250 ha of
irrigation network services improved and rehabilitated, 2,336 thousand of irrigation networks
operated and maintained, 163,075 ha of marsh irrigation network built/improved and
rehabilitated, 950,102 ha of marsh irrigation networks operated and maintained, 896
groundwater wells built, rehabilitated, operated and maintained, 56,342 ha of pond water
irrigation networks services built/improved, rehabilitated, operated and maintained.
Processing industry sector is projected to record steadily growth in line with reindustrialization
program. In 2013, this sector is predicted to rise at 6.5 percent (yoy). Industrial development
aims to increase the added value of various specialty commodities from many regions in
Indonesia, especially from economic corridors within MP3EI framework. Industrialization
will be accelerated through the development of: (a) mining product processing industries;
(b) agriculture product processing industries; (c) intensive labor industries and domestic
requirement supplies; and (d) strong, sustainable and self-reliant small and medium scale
industries (IKM). Policy in industri sector is intended to intensify industrial development in
economic corridors such as: (a) metal basic material industry revitalization and development;
(b) textile and miscellaneous industry revitalization and development; (c) forest and plantation
product revitalization and development; (d) food, marine and fishery product industry
revitalization and development; (e) land transport mode industry development;
(f) strengthening industrial research and standardization; and (g) small and medium scale
distribution and promotion. Priority activities in industry sector include: (a)
machinery revitalization of 165 textile industries and 25 sugar factories, and the development
of their industrial cluster; (b) coconut oil processing industry cluster development; and
(c) affordable public transport industry development; and (d) new entrepreneurs in industrial
sector.
The policy of industry sector and its development focus will be directed as follows:
(1) the development of natural resources processing industries as the main employment
generators with priority focus given to industrial development, including: a) mine product
based industries, i.e. aluminum industry in Kuala Tanjung of North Sumatra and alumina
industry in West Kalimantan; steel industry in Kulonprogo of DIY and Batulicin of South
Kalimantanl nickel, copper, coal, petrochemical and oil and gas based industries; b) agriculture
product processing industries, i.e. oil coconut industry in KEK Sei Mangke of North Sumatra,
Maloy of East Kalimantan and Dumai of Riau; rubber, cacao, pulo and paper processing
industries; sugar cane based industries; and vegetable oil and fat industries; c) human
resources based industries to meet domestic market demands, i.e. in textile, garments,
footwear; electronic components and motor vehicles accessories, and ship making; domestic
wares, furniture and rattan industries; medicine and health equipment industries; (2) strong,
viable and self-reliance small and medium industries (IKM) with focus given to the
development of priority industries, i.e.: the promotion of small and medium enterprises evident
from increased IKM population, IKM innovation, creative industries, and IKM as the suppliers
for large scale industries.
Financial Notes and Indonesian Budget 2013
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Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
Construction sector in 2013 is predicted to grow by 7.5 percent (yoy). This growth is supported
with various infrastructure projects as the continuation of MP3EI and one of national
priorities. The infrastructure development is accelerated to buttress national connectivity,
energy and food resilience through government financing, business world and public-private
partnership. Infrastructure development, institutional capacity building and health and
education improvement are crucial to magnify economic productivity. Infrastructure
development acceleration is carried out with: (a) capacity maintainance and expansion of
national roads; (b)the development and management of infrastructure and facilities to support
railways transporation; (c) the development, rehabilitation and maintainance of airport
infrastructure; the development of river, lake and ferry transport (ASDP) facilities and
infrastructure and their management; (e) the management and operation of ports and
dredging; (f) the management and conservation of dams, embungs, situ and water collector
structures; (g) the development of low-cost multi-storey houses; (h) the promotion of selfhelp housing development; and (i) home quality improvement. National infrastructure
development is a priority with the largest budget allocation. Activities relating to domestic
connectivity and economic corridor development will be the main focus. The completion of
Semarang-Surabaya double tracks, capacity expansion of Bakauheni-Merak ports, airport
and seaport capacity expansion for Western and Eastern Regions of Indonesia and capacity
expansion of national links are expected capable of escalating national economic growth.
Trade, hotel and restauran sector in 2013 is estimated to rise by 8.9 percent (yoy). The
purchasing capacity of people is expected to be well-maintained as the driving motor of this
sector. In addition, the performance of this sector is also subject to the performance of industry
and import sectors. Retail trades either local or modern, are projected to mushroom in line
with the growing people’s needs. The number of foreign and domestic tourists are expected
to hike that will promote tourism sector and occupancy rate of hotels and restaurant. In
detail, the estimated economic growth from sector side can be seen in Table 2.7.
TABLE 2.7
ECONOMIC GROWTH BY SECTORS, 2012 - 2013
(percent, yoy)
2012 *
2013 *
Agriculture, Livestock
3,5-3,7
3,7
Mining and Excavation
2,9-3,1
2,8
Processing Industries
5,7-5,9
6,5
Electricity, G as and Water Supply
6,2-6,4
6,6
Construction
7,6-7,8
7,5
Trade, Hotel and Restaurant
7,1-7,3
8,9
11,6-11,8
12,1
Finance, Real Estate & Corporate Services
6,6-6,8
6,1
Services
6,6-6,8
6,0
6,3-6,5
6,8
Sector
Transport and Communication
Gross Domestic Product
*Est im a t e
Source: the Ministry of Finance
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Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
2.3.3.2 Rupiah Exchange Rate
The Government and Bank Indonesia continually take any measure to maintain the volatility
of rupiah exchange rate by strengthening the synergy of fiscal and monetary policies, the
introduction of prudent monetary policy, foresign exchange traffic control, and domestic
financial market development and expansion. These policies are expected capable of
maintaining the stability of rupiah exchange rate, preventing excessive volatility and assuring
the adequacy of foreign exchange reserve to meet economic foundation. The introduction of
mixed prudential macro policies with the application of term deposit instrument is to attract
the incoming capitals to Indonesian financial markets that in turn will generate favorable
impacts to economic development. In future, pressure to rupiah exchange rate will come
from the declining surplus of balance of trade and economic downturn in China, India and
Brazil, which are worried to abate the attractiveness of capital inflows to emerging markets
and to encourage flight to quality. With such domestic and international economic
development, rupiah exchange rate to US dollar is estimated to fluctuate at Rp.9.000 to
Rp.9,300 per US dollar with upper cap at Rp.9.300 per US dollar on the average during the
whole 2013.
2.3.3.3 Inflation
Low and stable inflation is pre-requisite for people’s welfare augmentation and sustainable
economic growth. To realize this condition, amid strong inflation pressure coming from
both external and internal sources, it is deemed necessary to set out proper policies to maintain
macroeconomic stability and to curb the inflation in future. Coordination of monetary, fiscal
and real sector policies must be improved both at national and regional level. Such coordination
may consist of monitoring to price trends, supply trends and distribution of several strategic
commodities, and establishing fast and appropriate anticipative policy and measures to deal
with the potential price upheavals. With such broader and more integrated coordination, the
stability of goods and services prices can be reached and maintained.
The national economic development must be focused to increase production capacity in line
with the bolstering investments and as such national needs can be complied with and output
gap can be minimized. To support production capacity increase, the Government plans to
introduce strategy of accelerating infrastructure development. This infrastructure
development acceleration is necessary to ascertain well-advanced distribution of basic needs
either at domestic or inter-island level in Indonesia. In this respect, the Government will
increase the allocation of infrastructure budget by, among other things, refining expenditure
budget allocation of subsidized expenditure for realocation to infrastructure development.
With well-controlled price pressure from demand and supply sides, improving infrastructure
and distribution of basic needs and relatively stable rupiah exchange rate, it is expected that
the inflation rate be maintained at low and stable rate, convergent with inflations of other
regional countries.
Thanks to such policy synergy of the Government and Bank Indonesia coupled with sound
coordination and in view of domestic and global economic trends, inflation in 2013 is predicted
at 4.9 percent range.
Financial Notes and Indonesian Budget 2013
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Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
2.3.3.4 3-Month SPN Rate
The trend of 3-month SPN rate in 2013 will remain vulnerable to both internal and external
factors. From external side, it is expected that global economic recovery still continues despite
gloom shadow of European crisis. In line with such recovering economy, the capital inflows
will go to the developing countries, including Indonesia despite less intensity.
More synergic coordination of Bank Indonesia and the Government is expected capable of
establishing interest rate at tolerable level so as to maintain domestic inflation at controllable
rate in 2013. Given such factors, the 3-month SPN rate in 2013 is estimated at 5.0 percent on
the average.
2.3.3.5 Indonesian Crude Oil Price (ICP)
The recovering global economy will spark high global demands on oil in 2013. On the other
side, the global oil supplies and distribution are predicted to show stable trend due to disciplined
stance taken by OPEC members in controlling their oil production capacity. According to
Energy International Agency (EIA), the oil prices of WTI and Brent in 2013 are to range
respectively at USD$88.5 per barrel and US$98.3 per barrel on the average, which are slightly
lower than estimates in 2012 at US$92.8 per barrel and US$106.3 per barrel respectively.
This high estimate is attributed to higher demand growth projection and lower supply growth
of non-OPEC countries. In view of such factors, ICP in 2013 is set at US$100 per barrel.
2.3.3.6 Oil and Gas Lifting
One variable used to calculate oil and gas revenue thus far is oil lifting. In reality, in Indonesia
this oil revenue is also subject to gas lifting. While taking challenges inherent to production
capacity and crude oil lifting of Indonesia, the Government plans to propose additional variable
in 2013 to offset potential revenue decrease from crude oil resources. The preference to natural
gas is due to the fact that Indonesia as one of largest gas exporters, the crucial position of gas
as alternative energy to oil, and efforts that have been taken to optimize the consumption of
gas energy throughout the country.
At variance with the depleting oil reserves, gas reserves in Indonesia are relatively abundant.
According to data 2010, total gas reserves around the country reached 157.14 trillion standard
cubic feet/tscf) or about 3.0 percent of total gas reserve in this world, consisting of proved
reserves 108.4 tscf and potential reserves 48.74 tscf. These total gas reserves are distributed
in some regions in Indonesia, with the largest portions found in Natuna (51.46 tscf) and
Papua (24.32 tscf).
Gas production of Indonesia records relatively stable trend. In 2010, gas production reached
1,577 thousand oil equivalent barrel per day (mboepd), implying an increase of 159 mboepd
from 1,418 mboepd in 2009. This production increase is attributed to the operation of new
field and optimized production. However, in 2011 the natural gas production of Indonesia
decreased to 1,461 thousand oil equivalent barrel per day. This declining gas production
trend continued in 2012, which is expected to reach 1,348 thousand oil equivalent barrel per
day. Oil and gas projects to boost gas production until 2016 consist of 12 project. Priority
projects in 2012 include Peciko field with gas production 170 million standard cubic feet per
day (MMSCFD), Gajah Baru and Terang Serasun (300 MMSCFD). For 2013 the priority
projects are Sumpal (74 MMSCFD) and Sebuku (100 MMSCFD).
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Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
In view of the above progress, gas lifting in 2013 is predicted at 1,360 thousand oil equivalent
barrel per day. Today, there are 56 Production Sharing Contractors (KKKS) that will support
the realization of such gas lifting. Five dominant KKKS to pursue the above target gas lifting
are Exxon Mobil Oil Indonesia, Chevron Indonesia Company, Premier Oil Natuna Sea B.V,
Santos (Madura Offshore) Pty. Ltd, and PHE West Madura Offshore.
On the other side, oil lifting in 2013 is expected to reach 900 thousand barrel per day. Thus,
in cumulative wise, oil and gas lifting in 2013 is projected to reach 2,260 thousand barrels.
BOX 2.1
MANPOWER AND POVERTY
In National Mid-Term Development Plan (RPJMN) 2010 – 2014, which is implemented in
RKP and RAPBN every year, it is mentioned that one of macroeconomic policy goals is to
push quality economic growth. Quality economic growth is a growth capable of generating
employment and thereafter lessening unemployment and poverty. Unemployment and
poverty are two issues always garnering great concern from the Government in designing
every development program.
EMPLOYMENT COMPOSITION BY ECONOMIC
SECTORS (% to Total)
2007 - 2011
Others
Social Service
2011
Finance
2010
Transport & Comm
2009
Trade Hot & Rest.
Construction
2008
Elect. Gas Water
2007
Industry
Mining
Agriculture
0%
10%
20%
30%
40%
Source: Central Bureau of Statistics
50%
The Government is always attempting to push the
economy not only to grow but must be quality
growth to augment people’s welfare. In this sense
the growth must give broader room for the
creation and expansion of employment to reduce
poverty rate and more Indonesian households
will enjoy the outcomes of development. With
economic growth 6.8 percent as set in APBN 2013,
the Government is expecting that open
unemployment rate be decreased at 5.8 – 6.1
percent and poverty rate be dropped to 9.5 – 10.5
percent.
Manpower
The relatively sound domestic economic performance is able to bring about positive impacts
for employment generation and unemployment reduction. During 2007 to February 2012,
total population at productive age had surged by 9.5 percent, i.e. from 109.41 million persons
in 2007 to 120.41 million persons in February 2012. During such period, this exceeding
productive population is coupled with enormous productive population, i.e. to rise from
99.93 million persons to 112,8 million persons. It implies that the employment opportunities
have increased by 12.9 percent. With such progress, the unemployment is to drop from 9.11
percent in 2007 to 6.32 percent in February 2012.
Based on the main employment fields from 2007 – February 2012, the employee composition
was dominated by workforce in agriculture sector 36.5 percent, followed by trade sector
21.3 percent. During such period, the largest employment increase was in public service
sector. Total workforce engaged in this sector in 2007 recorded 12.02 million persons, and
to jump to 17.37 million persons in February 2012. Significant employment rise was also
identified in trade and industry sector, which recorded respectively from 20.6 million persons
and 12.4 million persons in 2007 to 24.0 million persons and 14.2 million persons in 2012.
Meanwhile, employment capacity of agriculture sector suffered downward trend.
Financial Notes and Indonesian Budget 2013
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Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
In 2012 amid global economic slowdown, economic stimulus policy and infrastructure
development programs are expected to give pushing force for national development, from
which new employment opportunities can be generated. In February 2012, the open
unemployment rate reaches 6.32 percent. This percentage surpasses the target set by the
Government, i.e. at 6.4 – 6.6 percent. By end of 2012 it is predicted that this open
unemployment rate will further drop to 6.32 percent.
Consistent with the economic growth target in 2013 and infrastructure development support
and agriculture and industry revitalization, the generated employment opportunities are
expected to bring greater impacts. MP3EI program focusing on economic corridor
development in a number of regions across the country supported with better domestic
connectivity will be able to broaden employment opportunities in more equitable manner.
With such Government work program, the target unemployment of 5.8 – 6.1 percent in 2013
can be realized, even though it is lower than last year’s target. The lowering unemployment
will give positive impacts for income generation and equitable people’s welfare.
Poverty The bolstering domestic economy coupled with more employment generation in 2007 –
2011 had reduced poverty rate. In 2007 total poor people in Indonesia recorded 37.17
million persons or 16.58 percent of total population. These number and percentage were
further declining in 2011. Based on survey in March 2011, poor people in urban areas and
rural areas reached 30.02 million persons or in other words, the poverty rate was decreased
to 12.49 percent. If compared with poverty reduction trend during such period between
urban areas and rural areas rural areas recorded higher poverty alleviation rate than in
urban areas. Poverty rate in villages dropped from 20.37 percent in 2007 to 15.72 percent
in 2011 or to decrease by 4.65 percent. Meanwhile, poverty rate in the cities decreased from
12.52 percent in 2007 to 9.23 percent in 2011.
2012
2011
1,6
15,2
2,4
4,6
15,4
35,9
Agriculture
1,7
Industry
36,5
2,5
4,6
Elect. Gas Water
Construction
Trade Hot & Rest.
Transport & Comm
21,3
21,3
5,4
5,8
13,3
12,6
Finance
Others
Better welfare of poor people is not only evident from the decreasing poverty rate but also
higher living standard quality. Poverty Depth Indicator (PI) indicating average consumption
of population living below poverty line is to constantly decreasing. It shows that while remain
in below poverty line status; the income and welfare of low-income households are improving.
The same is also evident from poverty severity indicator (P2). These two indicators confirm
that poor people experience welfare improvement implying more equitable development.
People’s welfare augmentation not only relates to income, but also access to education and
health. Better living quality of Indonesian people, which is obvious from higher Human
Development Index (HDI), i.e. from 0.591 in 2007 to 0.617 in 2012. This higher IPM is
attributed to improved education, health, income and life expectancy indices.
2-36
Financial Notes and Indonesian Budget 2013
Macroeconomic Trend and Fiscal Policy Highlights 2013
Chapter 2
Survey in March 2012 revealed that the national poverty rate had reached 11.96 percent, an
indication of further reduction if compared with poverty rate in March 2011 recording 12.49%.
In line with improving economic growth in semester II 2012 and lower unemployment rate,
poverty rate by end of 2012 is expected
to decrease at 10.5 percent to 11.5
Poverty Level, 2005 - 2013
percent.
20,0
This lower poverty rate is attributable to
the decreasingly number of poor people 16,0 15,97 17,75 16,58
15,42
11,5
in urban areas as well as in rural areas. In 12,0
14,2
10,5
13,33
12,36
March 2011, total poor people in cities
10,5
9,5
dropped by around 0.4 million persons, 8,0
i.e. from 11.05 million to 10.65 million 4,0
persons. Likewise, during the same
period, poverty rate in rural areas was 0,0
2005
2006
2007
2008
2009
2010
2011
2012
2013
also to drop around 0.48 million persons
or from 18.97 million to 18.48 million
persons. Thus in percentage wise, poor population in urban areas as of March 2012 is to
decrease from 9.23 percent to 8.78 percent and the percentage of poor people in villages was
to decline from 15.72 percent to 15.52 percent.
Success in coping with poverty is due to
the relatively high economic growth as
the
consequence
of
pro-poor
empowerment programs and fervent
efforts to satisfy the basic rights of people.
It must be admitted however that some
external and internal problems have
hampered the effective implementation
of poverty alleviation policies. Given that,
the Government will attempt to tune
poverty alleviation programs with MP3EI
in order to achieve the target poverty
reduction in 2013 set at 9.5 percent to
10.5 percent.
THE PERCENTAGE OF POOR PEOPLE
Region/Year
Urban
Mar-11
Sep-11
Mar-12
Rural
Mar-11
Sep-11
Mar-12
Urban + Rural
Mar-11
Sep-11
Mar-12
Total Poor People
(million)
Percentage of
Poor People
11,05
10,95
10,65
9,23
9,09
8,78
18,97
18,94
18,48
15,72
15,59
15,12
30,02
29,89
29,13
12,49
12,36
11,96
Source: Central Bureau of Statistics (BPS)
These poverty alleviation initiatives will
POOR PEOPLE AND POVERTY RATE
be focused on several aspects. One of
2007 -2011
18
them, which is the most important 40
35
concerns with the assurance of food
16
14,15
16,58
provision to poor people. In this case, the 30
13,3
15,42
14
Government will take any measure to 25
12,49
11,96
20
meet the food supplies for low-income
23,61
12
22,19
20,62
19,93
18,97
18,48
people with price stabilization policy and 15
10
10
rice allocation for the poor. These
13,56
12,77
11,91
11,1
11,05
10,65
5
attempts will be coupled with data update
0
8
and distribution system improvement to
2007
2008
2009
2010
2011
2012
million poor persons - urban
ensure that such policy will reach the
million poor persons - rural
appropriate targets. PNPM policy will be Source: BPS
Poverty Rate
further improved to bring about more
impacts for the neediest people and capable of developing the capacity and prosperity of
people in self-reliant fashion. In this respect, the activities will be focused on capacity building,
Financial Notes and Indonesian Budget 2013
2-37
Chapter 2
Macroeconomic Trend and Fiscal Policy Highlights 2013
employment expansion and broader access to basic services and sustainable business. To
support employment and business expansion, loan/financing programs for micro, small and
medium enterprises (UMKM) and People Credit Program (KUR) will be intensified. In addition,
the Government will launch low-cost house provision programs for low-income people
including the supporting facilities and infrastructure.
2-38
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
CHAPTER 3
GOVERNMENT REVENUES
3.1 General
Government revenues as the primary sources for State Budget (APBN) funding consist of
revenues earned from taxes, non-taxes and grants. The sums of these Government revenues
are subject to the targets achievable from the respective sources, while meticulously taking
into consideration various policies to be taken by the Government and economic indicators
trends reflected in basic assumptions of macroeconomy such as economic growth, inflation
rate, rupiah exchange rate to US dollar and other macroeconomic indicators.
In line with the efforts of optimizing these Government revenues so as to fortify self-reliance
in development funding, in nominal wise, the realization of Government revenues for the
last five years demonstrates significant increase. During 2007 – 2011 period the Government
managed to record revenue increase of 14.4 percent per annum on the average, which come
from taxes raising 15.5 percent per annum on the average, non-taxes increasing 11.4 percent
per annum on the average and grants showing an average growth of 32.6 percent per annum.
The development and dynamics of people’s needs in nation and state life require budget
allocation, which is increasing from time to time. Given that, the sources of revenues must
be continually optimized. In this respect, optimizing revenues become a great challenge that
must be dealt with. To address this issue, the Government has taken a number of measures
including policy measures and administrative measures with regard to these Government
revenues raising both from tax and non-tax sources.
3.2 Revenue Trend in 2007 – 2011 and the Estimated Revenues
in 2012
The Government revenues during period 2007 – 2011 showed steady increase. In such period,
in nominal terms, the revenues earned by the Government was to rise 14.4 percent per
annum on the average, i.e. from Rp. 707.8 trillion in 2007 to Rp. 1,210.6 trillion in 2011.
They consisted of domestic revenues with contribution 99.7 percent on the average and grants
with contribution 0.3 percent on the average. The trend of revenue realization from 2007 to
2011 is presented in Table 3.1.
In APBNP 2012, the Government revenues are targeted to garner Rp.1,358.2 trillion. In
view of realization in semester 2012 collecting Rp.593.3 trillion (43.7 percent of target set in
APBNP 2012), the realization of Government revenues in 2012 is predicted to amount
Rp.1,372.4 trillion (101.0 percent of the target). This sum comprises estimated domestic
revenues Rp.1,366.4 trillion (100.7 percent of the target in APBNP 2012) and estimated
grant revenue Rp.6.0 trillion (732.6 trillion of the target).
3.2.1 Domestic Revenues
Financial Notes and Indonesian Budget 2013
3-1
Chapter 3
Government Revenues
Domestic revenues were to rise by 14.3 percent on the average from 2007 to 2011. During
this period, these domestic revenues coming from taxes and Non-Taxes (PNBP) contributed
respectively 71.1 percent and 28.9 percent on the average. This increase was attributed to
relatively high economic growth and tax and non-tax policies exercised in consistent and
sustainable manner.
In APBNP 2012, the target of domestic revenues is set at Rp.1,357.4 trillion. Owing to
realization in semester I 2012 reaching Rp.592.6 trillion (43.7 percent of the target), the
domestic revenues in 2012 are expected to amount Rp.1,366.4 trillion (100.7 percent of the
target in APNBP 2012). This sum consists of realized tax revenues Rp.1,021.8 trillion (100.5
percent of the target) and non-tax revenue (PNBP) Rp.344.6 trillion (101.0 percent of the
target). The trend of domestic revenue from 2007 to 2011 is presented in Table 3.1.
3.2.1.1 Tax Revenues
TABLE 3.1
GOVERNMENT REVENUE TREND, 2007 - 2012
(trillion rupiah)
Description
I DOMESTIC REVENUE
1. Tax Revenue
a. Domestic Tax
1) Income Tax
a) Oil and Gas
b) Non Oil and Gas
2) Value Added Tax
3) Land and Building Tax
4) BPHTB
5) Excice
6) Other Tas
b. International Trade Tax
1) Import Tax
2) Export Tax
2. Non Tax Revenue
a. Naturan Resources Revenue
1) Oil and Gas
a) Oil
b) Gas
2) Non Oil and Gas
a) General Mining
b) Forestry
c) Fishery
d) Geothermal
b. Gov. Portion from SOE profit
c. Other Non Tax Revenue
d. BLU Revenue
II GRANT REVENUE
Total
2007
Real.
2008
Real.
2009
Real.
2010
Real.
2011
Real.
APBNP
2012
Outlook*)
706,1
491,0
470,1
238,4
44,0
194,4
154,5
23,7
6,0
44,7
2,7
20,9
16,7
4,2
215,1
132,9
124,8
93,6
31,2
8,1
5,9
2,1
0,1
0,0
23,2
56,9
2,1
979,3
658,7
622,4
327,5
77,0
250,5
209,6
25,4
5,6
51,3
3,0
36,3
22,8
13,6
320,6
224,5
211,6
169,0
42,6
12,8
9,5
2,3
0,1
0,9
29,1
63,3
3,7
847,1
619,9
601,3
317,6
50,0
267,6
193,1
24,3
6,5
56,7
3,1
18,7
18,1
0,6
227,2
139,0
125,8
90,1
35,7
13,2
10,4
2,3
0,1
0,4
26,0
53,8
8,4
992,2
723,3
694,4
357,0
58,9
298,2
230,6
28,6
8,0
66,2
4,0
28,9
20,0
8,9
268,9
168,8
152,7
111,8
40,9
16,1
12,6
3,0
0,1
0,3
30,1
59,4
10,6
1.205,3
873,9
819,8
431,1
73,1
358,0
277,8
29,9
0,0
77,0
3,9
54,1
25,3
28,9
331,5
213,8
193,5
141,3
52,2
20,3
16,4
3,2
0,2
0,6
28,2
69,4
20,1
1.357,4
1.016,2
968,3
513,7
67,9
445,7
336,1
29,7
0,0
83,3
5,6
47,9
24,7
23,2
341,1
217,2
198,3
150,8
47,5
18,8
15,3
3,1
0,2
0,3
30,8
72,8
20,4
1.366,4
1.021,8
970,9
499,0
76,6
422,4
347,3
31,7
0,0
87,9
5,0
50,9
26,1
24,8
344,6
220,2
201,1
144,5
56,6
19,0
15,3
3,1
0,2
0,5
30,8
73,2
20,4
1,7
2,3
1,7
3,0
5,3
0,8
6,0
707,8
981,6
848,8
995,3
1.210,6
1.358,2
1.372,4
*) According to Outlook in APBN 2012 Implementation Report Semester I
Source: the Ministry of Finance
3-2
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
Tax revenues from domestic tax and international trade tax with contributions of respectively
95.4 percent and 4.6 percent on the average showed an increase of 15.5 percent on the
average from 2007 to 2011. Domestic tax revenue for the said period was to rise by 14.9
percent per annum on the average with the international trade revenue recording average
rise of 26.8 percent per annum.
Domestic tax revenues are composing of income tax (PPh), Value Added Tax and Sales Tax
of Luxury Goods (PPN and PPnBM), Land and Building Tax (PBB), Excise and Other Taxes.
The domestic tax revenues in 2007 – 2011 were primarily from PPh tax (oil and non-oil)
with contribution 52.0 percent on the average and PPN and PPnBM with average contribution
33.2 percent. Meanwhile, revenues from international trade tax during 2007 – 2011 period
were from import tax. For excise revenues, they were basically still low. However, as from
2011, the revenues of export tax showed significant rise, which equalled the import tax
revenues as a result of soaring CPO price to which higher export tax tariff was applied.
Tax revenues in APBNP 2012 is targeted to reap Rp.1,016.2 trillion. With their realization in
semester I 2012 reaching Rp.456.8 trillion
(44.9 percent of the target in APBNP 2012),
GRAPH 3.1
TAX REVENUE TREND, 2007-2012
the realization of tax revenues in 2012 is
projected to hit Rp.1,021.8 trillion (100.5 percent
trillion Rp
(%)
Tax Revenue
Tax Ratio
percent of the target). This realization is 14
1200
mainly supported by PPN and PPnBM, PBB,
1.016,2 1.021,8
13,3
1000
Excise and International Trade Tax. Some
873,9
13
factors contributing the rise of tax revenues
12,4
800
12,3
723,3
include soundly-maintained economic
658,7
619,9
11,9
11,8
600
growth, domestic consumption growth and 12
491,0
the introduction of excise tariff increase to
11,3
400
11,0
tobacco at 16.3 percent on the average. The 11
trend of tax revenues in 2007 – 2012 can be
200
seen in Graph 3.1.
10
General Taxation Policies
0
2007
2008
Source: the Ministry of Finance
2009
2010
2011
APBNP Outlook
2012
Tax revenues in 2007 – 2011 were
supported with various policies taken by the Government in taxation sector, including: (a)
tax administration reform; (b) regulation and law reform; and (c) potential [tax] supervision
and exploration reform. The reforms that have been carried out in tax administration are
inclusive of establishing modern tax office and launching project for Indonesia tax
administration report (PINTAR) program. In regulation and law sector, during the said
period, the Government has amended three tax laws, i,e, General Provision and Tax
Procedure in 2007, Law on Income Tax in 2008, and Law on Value Added Tax of Goods and
Services and Sales Tax of Luxury Goods in 2009. According to the new laws, PPh tariff for
corporation is to decrease from 28 percent in 2009 to 25 percent in 2010. Special for public
companies, which minimum 40 percent of their shares are owned by public they shall receive
incentive of PPh corporation tariff cut of 5 percent below normal rate. In potential [tax]
supervision and exploration, the Government has established a structured, measurable,
standardized, systematic and accountable tax revenue potential supervision and exploration
method. This method has been developed since early 2007 covering mapping, profiling and
Financial Notes and Indonesian Budget 2013
3-3
Chapter 3
Government Revenues
benchmarking.
Box 3.1
Tax Ratio
The Ratio of Tax Revenue to Gross Domestic Product/GDP (Tax Ratio) of Indonesia in 2009 –
2009 is to range from 11.0 percent to 12.3 percent. The calculation of this tax ration only takes
into account the tax revenue collected by the Central Government, and excludes regional tax
and revenue earned from oil and gas.
Should the said regional tax and oil and gas revenue be included in tax ratio calculation, the tax
ratio of Indonesia in 2009 – 2012 will record higher percentages, i.e. ranging from 14.1 percent
to 15.8 percent. Tax ration calculation that includes regional tax and oil and gas revenue is
known as tax ratio in broader sense.
In customs and excise, the policies taken by the Government in attempt to increase their
Indonesia Tax Ration Trend 2009―2012
(triliun Rupiah)
2009
2010
2011
2012
Tax Revenue (1)
619,9
723,3
873,9
1.021,8
Oil and Gas (2)
125,8
152,7
193,5
201,1
45,1
47,7
63,6
81,6
5.613,4
6.422,2
7.427,1
8.274,0
Regional Tax (3)*
PDB (4)
Tax Ratio (narrow meaning) = 1 : 4
11,0%
11,3%
11,8%
12,3%
Tax Ratio (broad meaning)=(1 + 2 + 3) : 4
14,1%
14,4%
15,2%
15,8%
Source: the Ministry of Finance
Nore:
*) Regional tax revenue in 2010 - 2012 is derived from APBN data.
revenue include: (a) developing automated customs and excise service system; (b) facilitation
in custom services (pre entry classification, customs advice, valuation ruling, and prenotification); (c) facilitation to import substitution industries and export oritented industries;
(d) primary service office and medium Customs and Excise Supervision and Service Office
(KPPBC); (e) tight supervision to import and export traffics; (f) supports to international
trade cooperation either bilateral and regional or mulitalteral; (g) the introduction of national
single windows (NSW) and Indonesian portal of national single windows (INSW); (h)
improved custom services through major partner lines (MITA) and priority lines; (i) law
enforcement in customs affairs through risk management, risk assessment, profiling, and
targeting; and (j) compliance of customs service users in fulfilling their obligations.
Tax revenue policy is introduced in sustainable manner to support the realization of targets.
In 2012, the non-oil and gas tax policies include: (a) PPN system and regulation restructuring
with electronic SPT (e-SPT) and re-inventory of WP corporation performing PPN collection;
3-4
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
(b) revisions to some policies on PPh that in future will be tailored to the progress of business;
(c) maximum use of data to optimize tax potential exploration with the operation of external
data processing office (KPDE); (d) improved tax receivable administration for better tax
payable management; (e) improved WP compliance especially WP of APBD treasurers; (f)
tax base expansion with improved national tax census strategy (SPN) that had been started
in September 2011; (g) enhanced effectiveness of verification and investigation to improve
the compliance of WP; (h) WP reallocation to certain KPP; (i) the appointment of certain
independent survey agencies as experts of DJP (Directorate General of Taxes); and (j) the
operation of Mining and Oil and Gas Tax Office (KPP) (per April 2012).
In customs and excise sector, the policies introduced in 2012 include: (a) improving the
physical custom verification accuracy, classifiction and assessment; (b) optimizing the use
of land and sea operation/patrol facilities, especially in border areas; (c) intensifying the
supervisory functions with risk management; (d) increasing excise tariff; (e) proposing new
excisable goods; (f) intensifying patrol or supervision to excisable goods; (g) organizational
transformation with the establishment of 76 new modern offices in 2012; (h) 24-hours and
7-Day customs service in some ports; (i) automated customs and excise service in KPPBC;
and (j) export tax extensification with the charge of export tax to mineral mining products
consisting of raw materials (ores).
Apart from introducing policies aiming to boost tax revenue, the Government provides tax
facilities to further develop certain sectors. In 2012, the Government grants tax facility of
Government-borne tax (DPT) with allocation Rp.4.2 trillion consisting of PPh DPT for
geothermal mining Rp.0.8 trillion, PPh DPT for Government Bonds (SBN) Rp.2.8 trillion,
and import tax DPT for certain sectors Rp.0.6 trillion. In addition to tax and BM DTP facilities,
the Government provide facility of uncollected PPN and PPnBM for taxable goods receiving
tax exemption facility, for example for the import of goods used in upstream oil and gas and
geothermal exploration activities. This policy is a replacement to the revoked PPN DTP facility
of import tax for oil and gas exploration (PDRI) in 2011.
Thereafter, to augment the welfare of manpower, in 2012 the Government plans to revise
non-taxable revenues (PTKP), which remain unchanged since 2009. This PTKP revision has
been decided under Regulation of Finance Minister Number 162/PMK.011/2012 that takes
into effect as from 1 January 2013.
Domestic Tax Revenue
Domestic tax revenue is to rise by 14.9 percent per annum on the average during 2007 –
2011. Reviewed from its contribution to domestic tax revenue, the non-oil and gas PPh revenue
becomes the largest contribution with 42.5 percent on the average, followed by PPN and
PPnBM with contributions respectively 33.2 percent on the average. The trends of these two
taxes exert significant influence to domestic tax growth. Revenue from non-oil and gas PPh
is to rise 16.5 percent per annum on the average with PPN and PPnBM record average
growth of 15.8 percent per annum. Meanwhile, excise as the third largest contributor with
9.2 percent contribution on the average is to rise by 14.6 percent. The average growth and
contribution of each tax under domestic tax category can be seen in Graph 3.2 and Graph
3.3 respectively.
Financial Notes and Indonesian Budget 2013
3-5
Chapter 3
Government Revenues
In APBNP 2012, the revenues from domestic tax are targeted to amount Rp.968.3 trillion.
In view of their realization in semester I 2012, which amounted Rp.432.2 trillion or 44.6
GRAPH 3.2
DOMESTIC TAX REVENUE TREND , 2007−2012
90
75,0
87
70
2007
50
Persen (y-o-y)
30
10
18
2008
28,8
24
17
7
2
-10
11
20
2009
24
26
-7
2010
2011
2012
43
35,7
19
2021
-8
14
6,9
24
18
-4
27
1814,7 17
11 16 8
16
5
20
10,8
0
-1
3
-1
-6,4
-30
-50
-35
PPh
Oil and Gas
PPh
Non Oil and Gas
VAT
Land and
Building Tax
Source: the Ministry of Finance
percent of the target, the realization of domestic
tax revenues in 2012 is expected to hit Rp.970.9
trillion or 100.3 percent of the target. This
projection is supported with increases in PPN
and PPnBM, PBB and Excise revenues.
Revenue Land
Rights and
Building Tax
Excise
Other Tax
GRAPH 3.3
AVERAGE CONTRIBUTION OF DOMESTIC TAX REVENUE , 2006−2011
Revenue
Land Rights
and Building
Tax
0,9%
LBT
4,2%
Other Tax
0,5%
Oil and Gas
Excise
IT
9,2%
9,5%
Income Tax (PPh)
VAT
Non Oil and
Gas IT
33,2%
Income tax revenue was to rise by 16.00 percent
42,5%
per annum on the average during period 2007
– 2011. PPh revenue consists of oil and gas PPh
and non-oil and gas PPh with average
contributions 18.2 percent and 81.8 percent
respectively. In APBNP 2012, PPh revenue is
targeted to reach Rp.513.7 trillion composing of oil and gas PPh Rp.67.9 trillion and non-oil
and gas PPh Rp.445.7 trillion. Considering its realization in semester I 2012 reaching Rp.233.6
trillion or 45.5 percent of the target in APBNP 2012, the realization of PPh revenue in 2012
is predicted to amount Rp.499.0 trillion (97.1 percent of the target in APBNP 2012).
Oil and Gas PPh
The revenue of Oil and Gas PPh was to increase by 13.5 percent per annum on the average
during 2007 – 2011. Oil and Gas PPh consists of Oil PPh and Gas PPh with contribution of
respectively 37.3 percent and 62.7 percent on the average. Oil and Gas PPh revenue is
considerably subject to ICP, rupiah exchange rate to US dollar and oil lifting. The trend of oil
and gas PPh revenue realization from 2007 to 2012 can be seen in Table 3.2.
In APBNP 2012, revenue from oil and gas PPh is set to reach Rp.67.9 trillion. This oil and gas
PPh revenue consists of oil PPh revenue Rp.27.6 trillion and gas PPh revenue Rp.40.4 trillion.
In view of its realization in semester I 2012 reaching Rp. 34.8 trillion or 51.2 percent of the
3-6
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
TABLE 3.2
OIL AND GAS PPh REVENUE TREND , 2007-2012
(trillion rupiah)
2007
Description
Real.
2008
% to
Real.
Total
2009
% to
Real.
Total
2010
% to
Real.
Total
2011
% to
Real.
Total
2012
% to
APBNP
Total
% to
Outlook *)
Total
% to
Total
PPh Oil
16,3
37,0
29,6
38,5
18,4
36,7
22,8
38,8
25,9
35,5
27,6
40,6
27,6
36,1
PPh Gas
27,3
62,0
47,4
61,5
31,7
63,3
36,0
61,2
47,2
64,5
40,4
59,4
49,0
63,9
0,4
1,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
44,0
100,0
77,0
100,0
50,0
100,0
58,9
100,0
73,1 100,0
67,9
100,0
76,6
100,0
PPh other oil and gas
Total
*) Accordinto Outlook in APBN 2012 Implementation Report Semester I
Source: the Ministry of Finance
target, realization of oil and gas PPh revenue in 2012 is expected to hit Rp.76.6 trillion or
112.7 percent of the target in APBNP 2012. This high projection for oil and gas PPh revenue
is due to ICP estimate, which exceeds its assumption in APBNP 2012.
Non-Oil and Gas PPh Revenue
The revenue from non-oil and gas PPh was to rise by 16.5 percent per annum on the average
during period 2007-2011. This non-oil and gas PPh revenue was mainly from PPh Pasal 25/
29 Corporation and PPh Pasal 21 with average contribution of 43.3 percent and 19.5 percent
respectively. The revenue of PPh Pasal 25/29 Corporation increased by 17.6 percent per annum
on the average, with revenue of PPh Pasal 21 to rise at 141 percent per annum on the average.
The trend of non-oil and gas PPh revenue can be seen in Table 3.3.
In APBNP 2012, the target of non-oil and gas PPh revenue is set at Rp.445.7 trillion.
Considering its realization in semester I amounting Rp.198.8 trillion (44.6 percent of the
target), in 2012 the realization of non-oil and gas revenue is expected to reach Rp.422.4
trillion (94.8 percent of the target in APBNP 2012). This projection is based on economic
growth, which is assumed lower than the target set in APBNP 2012.
Value Added Tax (PPN) and Luxury Sales Tax (PPnBM) Revenue
Revenue from PPN and PPnBM during 2007 – 2011 was to rise at 15.8 percent per annum
on the average. During such period, PPN revenue contributed 95.0 percent on the average
with the average constribution of PPnBM 5.0 percent. PPN and PPnBM revenue can be
differentiated into two categories, i.e. domestic PPN and PPnBM and Import PPN and PPnBM.
The domestic PPN and PPnBM increased 13.9 percent per annum on the average with import
PPN and PPnBM to rise 18.8 percent per annum on the average.
In APBNP 2012, PPN and PPnBM revenue is planned to record Rp.336.1 trillion. This sum
consists of domestic PPN and PPnBM revenue Rp.207.6 trillion and import PPN and PPnBM
revenue Rp.128.5 trillion. In general, public and government consumption growths in 2012
are expected to be driving force in achieving such domestic PPN and PPnBM target.
Meanwhile, the relatively high import realization in 2012 is the main factor that will increase
Financial Notes and Indonesian Budget 2013
3-7
Chapter 3
Government Revenues
TABLE 3.3
OIL AND GAS PPh REVENUE TREND , 2007-2012
(trillion rupiah)
2007
Description
Real.
2008
2009
2010
2011
2012
% thd
% to
% to
% to
% to
Real.
Real.
Real.
Real.
APBNP
Total
Total
Total
Total
Total
% to
Total
% to
Total
Outlook *)
PPh Pasal 21
39,4
20,3
51,7
20,6
52,1
19,5
55,3
18,6
66,8
18,6
89,2
20,0
90,6
21,4
PPh Pasal 22
4,0
2,0
5,0
2,0
4,4
1,6
4,7
1,6
4,9
1,4
7,9
1,8
4,3
1,0
PPh Pasal 22 Impor
16,6
8,6
25,1
10,0
19,2
7,2
23,6
7,9
28,3
7,9
38,2
8,6
33,5
7,9
PPh Pasal 23
15,7
8,1
18,1
7,2
16,0
6,0
16,3
5,5
18,7
5,2
28,5
6,4
19,4
4,6
PPh Pasal 25/29 Pribadi
1,6
0,8
3,6
1,4
3,3
1,3
3,6
1,2
3,3
0,9
5,6
1,3
5,7
1,4
PPh Pasal 25/29 Badan
80,8
41,6
106,4
42,5 120,3
45,0
131,5
44,1
157,9
44,1
191,1
42,9
190,8
45,2
PPh Pasal 26
14,6
7,5
14,9
5,9
18,4
6,9
23,0
7,7
27,2
7,6
29,8
6,7
22,9
5,4
PPh Final dan Fiskal
21,6
11,1
25,8
10,3
33,8
12,6
40,1
13,5
50,8
14,2
55,4
12,4
55,3
13,1
PPh Non Migas Lainnya
0,01
0,01
0,02
0,01
0,02
0,0
0,03
0,0
0,04
0,0
0,04
0,0
0,02
0,0
194,4 100,0 250,5 100,0 267,6 100,0 298,2 100,0 358,0 100,0
445,7
100,0
422,4
100,0
Jumlah
*)*)Sesuai
Accordinto
denganOutlook in APBN 2012 Implementation Report Semester I
Sumber
: Kementerian
Keuangan
Source: the
Ministry of Finance
Import PPN and PPnBM revenue. Given
that, as of the end of 2012 PPN and
PPnBM revenue is expected to outpace the
target, i.e. Rp.347.3 trillion or 103.4
percent. The trend of PPN and PPnBM in
2007 – 2012 can be seen in Table 3.4 and
Graph 3.4.
GRAPH 3.4
VAT AND PPnBM REVENUE TREND ,
2007─2012
( trillion Rp )
( miilon US$)
DOM VAT & PPnBM
350
VAT & PPnBM Import
Import Value
200000
180000
300
160000
250
140000
120000
200
100000
PBB (Land and Building) Revenue
150
80000
60000
100
PBB revenue is to rise by 5.9 percent on
the average during 2007 – 2011. During
this period, this PBB revenue is mainly
from Mining PBB, Urban PBB and Rural
PBB. These three types of PBB revenue
give average contribution of respectively 69.7 percent, 21.4 percent and 5.4 percent. Starting
2011, the revenue of Urban PBB and Rural PBB has been transferred to the regions provided
that the local governments are ready to collect such PBB tax. Thus, urban and rural PBB
revenue in APBN will constantly decrease and reach nil when all regional governments
collect this kind of revenue by 2014. With such urban and rural PPB revenue transfer to
regions, starting from 2014 PBB revenue managed by the Central Government will only
consist of mining PBB, forestry PBB and plantation PBB.
40000
50
20000
0
0
2007
3-8
2008
2009
2010
2011
APBNP Outlook
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
TABLE 3.4
PPN AND PnBM REVENUE TREND, 2007 - 2012
(trillion rupiah)
2007
Description
a. PPN
Real.
2008
% to
Total
Real.
2009
% to
Total
Real.
2010
2012
% to
% to
Real.
Total
Total
Real.
% to
APBNP
Total
% to
Total
Outlook*)
% to
Total
147,4
95,4
198,2
94,5
184,2
95,4
218,2
94,6
264,4
95,2
318,5
94,8
327,9
94,4
Domestic PPN
93,3
60,3
116,7
55,7
120,4
62,4
133,9
58,1
157,2
56,6
195,7
58,2
179,6
53,4
Import PPN
53,9
34,9
81,1
38,7
63,4
32,9
84,2
36,5
107,0
38,5
122,3
36,4
148,1
44,1
Other PPN
0,3
0,2
0,3
0,1
0,3
0,1
0,2
0,1
0,2
0,1
0,4
0,1
0,3
0,1
7,1
4,6
11,5
5,5
8,9
4,6
12,4
5,4
13,4
4,8
17,6
5,2
19,4
5,6
Domestic PPnBM
4,7
3,0
7,5
3,6
6,1
3,2
7,6
3,3
8,0
2,9
11,4
3,4
10,4
3,1
Import PPnBM
2,4
1,6
4,0
1,9
2,8
1,5
4,8
2,1
5,4
1,9
6,2
1,8
9,0
2,7
Other PPnBM
0,021
0,01
0,012
0,01
0,015
0,01
0,00 0,002
0,008 0,003
0,018
0,005
0,001
0,000
Total (1+b)
154,5 100,0
193,1 100,0 230,6 100,0
277,8 100,0
336,1
100,0
347,3
100,0
b. PPnBM
209,6 100,0
*)*)Sesuai
Accordinto
denganOutlook in APBN 2012 Implementation Report Semester I
Sumber
Source: the
: Kementerian
Ministry of Finance
Keuangan
In APBNP 2012, the Government revenue from PBB tax is expected to reach Rp.29.7 trillion.
The realization of PBB revenue as of semester I 2012 records Rp. 2.3 trillion (7.7 percent of
the target). The relatively low realization is due to unrealized oil and gas PBB payment in
Quarter I and Quarter II 2012. Despite only 7.7 percent of the target, the realization of PBB
revenue in 2012 is expected to reach Rp.31.7 trillion (106.9 percent of the target). This is
because of the mining PBB that will be only realized in the second semester of 2012. The
trend of PBB revenue realization fro, 2007 to 2011 can be seen in Table 3.5.
Excise Revenue
During 2007 – 2011, the excise revenue grows by 14.6 percent per annum on the average.
From its contribution, the excise revenue is dominated by tobacco excise, i.e, 96.7 percent on
the average. Meanwhile, excise from ethile alcohol (EA) contributed 0.6 percent and excise
of ethile alcohol contained beverage (MMEA)had contribution 2.7 percent. The trend of excise
revenue realization from 2007 – 2011 can be seen in Table 3.6.
The increase of excise revenue in 2007 – 2011 is mainly subject to policy of rising excise tariff
for tobacco products every year. In general, basis underlying excise tariff setting includes:
(a) baseline excise tariff of retail selling price (HJE) layer applicable during previous period;
(b) the amount of increase, which takes economic growth, inflation growths and tobacco
consumption into account; (c) the priority of excise tariff policy consistent with the roadmap
of tobacco product industries (Government revenue, health and manpower); and (d) the
Financial Notes and Indonesian Budget 2013
3-9
Chapter 3
Government Revenues
TABLE 3.5
PBB AND BPHTB REVENUE TREND, 2007 - 2012
(trillion rupiah
Description
2007
2008
2009
2010
2011
% to
% to
% to
% to
% to
Real.
Real.
Real.
Real
Real
APBNP
Total
Total
Total
Total
Total
2012
% to
Total
% to
Total
Outlook*)
PBB Rural
1,7
7,3
1,4
5,6
1,4
5,9
1,2
4,3
1,2
3,9
0,7
2,5
1,8
5,6
PBB Urban
4,9
20,5
5,0
19,6
5,5
22,7
6,4
22,3
6,6
22,1
5,1
17,3
6,5
20,4
PBB Plantation
0,4
1,7
0,6
2,4
0,7
2,9
0,9
3,2
1,0
3,3
1,3
4,3
1,1
3,6
PBB Forestry
0,1
0,5
0,2
0,6
0,2
0,7
0,2
0,8
0,3
0,8
0,3
1,0
0,2
0,5
PBB Mining
16,6
69,9
18,2
71,6
16,5
67,8
19,8
69,4
20,5
68,5
22,3
75,0
22,2
69,9
Other PBB
0,03
0,1
0,02
0,1
0,00
0,0
0,00
0,0
0,4
1,3
0,0
0,0
0,0
0,0
28,6 100,0 29,9 100,0
29,7
100,0
31,7
100,0
Total
23,7 100,0
25,4 100,0
24,3 100,0
*)*)Sesuai
Accordinto
denganOutlook in APBN 2012 Implementation Report Semester I
Sumber : Kementerian Keuangan
Source: the Ministry of Finance
TABLE 3.6
EXCISE REVENUE REALIZATION TREND, 2007 - 2012
(trillion rupiah)
2007
Description
Tobacco Product Excise
Real.
2008
% to
Total
Real
2009
2010
% to
% to
Real.
Real.
Total
Total
2011
% to
Total
Real.
2012
% to
% to
% to
APBNP
Outlook *)
Total
Total
Total
43,5
97,4
49,9
97,4
55,4
97,6
63,3
95,7
73,3
95,1
79,9
95,9
84,4
96,1
Ethyle Alcohol Excise (EA)
0,4
1,0
0,4
0,8
0,4
0,7
0,1
0,2
0,2
0,2
0,1
0,1
0,1
0,1
Ethyl Alcohol containing beverage
excise (MMEA)
0,7
1,5
0,9
1,7
0,9
1,6
2,7
4,1
3,6
4,7
3,3
3,9
3,3
3,7
Excise administration fine
0,005
0,01
0,012
0,02
0,016
0,03
0,013
0,02
0,011
0,01
0,000
0,00
0,024
0,03
Other excise
0,028
0,1
0,015
0,0
0,010
0,0
0,015
0,0
0,011
0,0
0,000
0,0
0,018
0,0
Total
44,7 100,0
51,3 100,0
56,7 100,0
66,2 100,0
77,0 100,0
83,3 100,0
87,9 100,0
*) Accordinto Outlook in APBN 2012 Implementation Report Semester I
Source: the Ministry of Finance
simplification of specific excise tariff by reducing layer of each HT type. From the structure
aspect, excise tariff policy will be changed every year to control revenue from tobacco product
excise and to support tobacco product industry roadmap. The said changing tariff policy can
be seen in Table 3.7.
The revenue of international trade tax comes from import tax and export tax. In 2007 –
2011, the international trade tax revenue recorded increase of 26.8 percent on the average.
3-10
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
TABLE 3.7
TABACCO PRODUCT EXCISE TARIFF POLICY TREND 2007 - 2012
AVERAGE EXCISE TARIFF
TYPE
SKM
SPM
SKT
CLASS
2007
PRODUCTION LIMITS
(piece)
2008
2009
2010
2011
2012
Adv
(%)
Spesific
(Rp)
Adv
(%)
Spesific
(Rp)
Full
Spesific
(Rp)
Full
Spesific
(Rp)
Full
Spesific
(Rp)
Full
Spesific
(Rp)
I
more than 2 billion
40%
7
36%
35
277
297
312
342
II
not more than 2 billion
36%
5
35%
35
173
193
208
253
III
less then 0.5 billion
26%
3
22%
35
I
more than 2 billion
40%
7
34%
35
235
270
288
365
II
not more than 2 billion
36%
5
30%
35
128
157
167
183
III
less then 0.5 billion
26%
3
15%
35
I
less then 0.5 billion
22%
7
18%
35
160
175
190
225
II
more than 500 million but less then
2 billion
16%
5
10%
35
82
97
100
115
III
less than 500 million
8%
3
0%
30
40
65
65
75
delete
delete
Notes
Year 2012, the production limits for Type SK Class II was revised to >300 million but < 2 billion
In the meantime, cigarette production in 2007-2011 recorded average growth of 5.8 percent.
In 2012, the cigarette production is expected to rise 1.8 percent if compared last year’s
production. Given the said cigarette production and excise tariff, the excise revenue in APBNP
2012 is expected to amount Rp.83.3 trillion. In view of realization in semester I 2012 reaching
Rp.44.5 trillion or 53.5 percent of APBNP 2012 target, the realization of excise revenue in
2012 is projected to reach Rp.87.9 trillion or 105.5 percent of APBNP 2012 target.
The revenue of tobacco products excise is expected to amount Rp.84.4 trillion or 105.7 percent
of APBNP 2012 target. The main factor for the realization of such tobacco product excise is
the introduction of excise tariff increase by 16.3 percent and eradication of illegal cigarettes
with tight supervision to excisable goods distribution. Meanwhilse excise revenue from EA
and MMEA in 2012 is predicted to record Rp.0.1 trillion and Rp.3.3 trillion respectively.
Other Tax Revenue
The revenue from other taxes is to rise by 9.4 percent during 2007 – 2011. In such period,
this revenue is particularly from stamp duty reaching 92.4 percent on the average. The trend
of other tax revenue from 2007 – 2011 can be seen in Table 3.8.
In APBNP 2012, the revenue of other tax is targeted to reach Rp.5.6 trillion. In view of its
realization in semester I 2012 hitting Rp.2.1 trillion, the realization of other tax revenue in
2012 is expected to reach Rp.5.0 trillion or 88.6 percent of APBNP 2012 target.
International Trade Tax
Financial Notes and Indonesian Budget 2013
3-11
Chapter 3
Government Revenues
TABLE 3.8
OTHER TAX REVENUE TREND, 2007 - 2012
(trillion rupiah)
2007
Description
Real.
2008
%to
Real.
Total
Duty stamp
Other Indrect Tax
Tax collection interest
Total
%to
Real.
Total
2,6
95,0
2,8
0,02
0,7
0,001
0,1
4,3
0,2
2,7 100,0
2009
93,3
3,0 100,0
%to
Real.
Total
3,0
0,04 0,001
6,7
2010
0,1
97,4
2011
%to
Real.
Total
2012
%to
APBNP
Total
%to
Outlook *)
Total
%to
Total
3,3
84,2
1,1
27,0
5,2
91,5
4,8
96,3
0,04 0,001
0,02
2,6
64,9
0,002
0,0
0,007
0,1
15,8
0,3
8,1
0,5
8,5
0,2
3,6
2,5
3,1 100,0
0,6
4,0 100,0
3,9 100,0
5,6 100,0
5,0 100,0
*)*)Sesuai
denganOutlook in APBN 2012 Implementation Report Semester I
Accordinto
Sumber
: Kementerian
Keuangan
Source: the
Ministry of Finance
Based on its composition, the import tax contributed 71.1 percent on the average with the
contribution of export tax reaching 28.9 percent on the average. The trend of international
tax revenue is considerably subject to external economic conditions, especially global trades
and commodity price fluctuation, notably crude palm oil (CPO) in international market. In
addition, this international tax is dependent on the applicable import tax tariff structure.
In APBNP 2012, the revenue of international trade tax is expected to record Rp.47.9 trillion.
According to realization in semester I 2012 recording Rp.24.6 trillion, the revenue earned
from international trade tax as of the end of 2012 is projected to amount Rp.50.9 trillion or
106.2 percent of APBNP 2012 target. The trend of international trade tax revenue during
2007 – 2011 can be seen in Table 3.1.
Import Tax Revenue
The realization of import tax revenue in 2007 – 2011 period was to grow by 10.9 percent on
the average. The main factor contributing the revenue of import tax is that of higher value
of import foreign exchange and extra efforts in customs and excise sector.
In APBNP 2012 the revenue of import tax is expected to reach 24.7 trillion. Based on its
realization for the first six months, the revenue of import tax in 2012 is projected to amount
Rp.26.1 trillion or 105,5 percent of the target. It is mainly due to import increase during
2012.
Furthermore, to exercise commitment to international trade agreements, the Government
will decrease import tariff as aggreed in international cooperation agreement, including: (a)
ASEAN Trade In Goods Agreement (ATIGA) for AFTA; (b) ASEAN-China Free Trade Area
(ACFTA);(c) ASEAN-Korea Free Trade Area (AKFTA); (d) Indonesia-Japan Economic
Partnership Agreement (IJEPA); and (e) ASEAN-India Free Trade Area (AIFTA). In addition,
3-12
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
to foster trade cooperation between ASEAN-Australia-New Zealand (AANZ), the Government
has agreed on AANZ cooperation agreement that has been in force since December 2011.
The trend of revenue reaped from import tax and dutiable import from 2007 – 2011 can be
seen in Graph 3.5.
Export Tax Revenue
GRAPH3.5
IMPORT TAX AND DUTIABLE IMPORT REVENUE TREND 2007—2012
billion US$
Trillion Rp
30,0
Bea Masuk
25,0
Dutiable Impor
25,3
26,1
24,7
170
22,8
150
20,0
20,0
18,1
16,7
130
15,0
110
10,0
90
5,0
70
0,0
50
2007
2008
2009
Source: the Ministry of Finance
2010
2011
APBNP
Outlook
2012
The export tax revenue in 2007 – 2011 recorded average growth of 61.5 percent. The highest
export tax was collected in early 2008 and 2011 when CPO price in international market hit
US$1,200.0 per ton. In 2009, the revenue from export tax was to decline following the
downward CPO international price. The trend of CPO international price and export tax
GRAPH 3.6
INTERNATIONAL CPO PRICE AND EXPORT TAX TRENDS, 2007-2012
US$/Ton
billion Rp
1400
CPO Price
1200
Export Tax
4000
3500
3000
1000
2500
800
2000
600
1500
400
1000
500
200
0
0
-500
Source : the Ministry of Finance (proce ssed)
Financial Notes and Indonesian Budget 2013
3-13
Chapter 3
Government Revenues
revenue in 2007 – 2011 can be seen in Graph 3.6.
In 2012, the Government revenue from export tax is set to reach Rp.23.2 trillion. In view of
its realization in semester I and the introduction of policy on the extensification of export tax
to mineral ore under PMK Nomor 75/PMK.011/2012, which takes into effect since May
2012, it is estimated that export tax revenue in 2012 reach Rp.24.8 trillion or 106.9 percent of
APBNP target.
In the mean time, in setting export tax for oil coconut, CPO and the derivative products, the
Government devides the goods chargeable with export tax into 5 (five) groups according to
the downstream hierarchies of oil coconut based products, CPO and the derivative products,
to wit: (a) export tax charged to primary oil coconut products with the highest tariff 40
percent; (b) export tax charged to raw coconut oil with the highest tariff 22.5 percent; (c)
export tax charged to coconut oil processed products (requiring further processing) with the
highest tariff 15 percent; (d) export tax charged to raw materials for upstream oil coconut
industries with the highest tariff 13 percent; and (e) export tax charged to coconut oil based
ready to consume products (cooking oil and biodiesel) with the highest tariff 7.5 percent. The
export tax tariff for oil coconut, CPO and the derivative products can be seen in Table 3.9.
Downstream oil coconut industry policy aims to enhance the added value and competitiveness
TABLE 3.9
EXPORT TAX TARIFF FOR COCONUT OIL, CPO AND THE DERIVATIVE PRODUCTS
(PMK NOMOR 75/PMK.011/2012)
EXPORT TARIFF (%)
GROUP
I
II
III
IV
V
TYPE OF COMMODITY
≤750
>750 800
>800 850
>950 1000
>1000 1050
>1050 1100
>11001150
>1150 1200
>1200 1250
>1250
Palm fruits, seeds, kernel
40
40
40
40
40
40
40
40
40
40
40
40
Oil case and other solid
residue from palm fruits, seed
and kernel
20
20
20
20
20
20
20
20
20
20
20
20
Crude Palm Oil (CPO)
0
7,5
Other Group 2
0
7,5
9
10,5
12
13,5
15
16,5
18
19,5
21
22,5
9
10,5
12
13,5
15
16,5
18
19,5
21
Group 3
0
22,5
3
4
5
6
7
8
9
10,5
12
13,5
RBD Palm Olein
15
0
2
3
4
5
6
7
8
9
10
11,5
13
Hydrogenated RBD Palm
Olein , not including packed
with gross weight ≤ 25 kg with
Iodine Value ≤ 49 Wijs
0
2
3
4
5
6
7
8
9
10
11,5
13
Other Group 4
0
0
0
2
3
4
5
6
7
8
9
10
RBD Palm Olein in branded
packing ≤ 20kg
0
0
0
0
0
2
2
2
3
4
5
6
Biodeisel from crude palm oil
(fatty Acid Methyl Esters )
0
0
0
0
0
2
2
2
2
5
5
7,5
>850 -900 >900 -950
Source: the Ministry of Finance
of upstream oil coconut industries in domestic markets. This policy is an attempt to
compensate global market treatment which imposes import tax to CPO and crude palm
kernel oil (CPKO) at low level. Meanwhile, import tax for downstream CPO products and
the derivative products is charged at the highest rate causing the utilization of domestic or
3-14
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
national downstream CPO industries and the derivative products just to operate at around
50 percent per annum from the installed production capacity.
To control mineral ore export and highten the added values of domestic processing industries,
the Government has issued policy on the charge of export tax to mineral ores as indicated in
Box 3.2. It is in conformity with mandate of Law Number 4 of 2009 concerning Mineral
and Coal Mining regulating the obligations on raw material or mineral ore processing
management for domestic mines that will be applicable no later than 2014.
Box 3.2
Export Tax for Mineral Ores
Mineral is a non-renewable resource controlled by the State and exploited maximally for the
prosperity of people. Its management must generate added values for the national economy.
To realize this objective, the management of mineral mining must be based on benefit, justice
and proportionality principles solely for the sake of nation and state interests as prescribed in
Law Number 4 of 2009 concerning Mineral and Coal Mining.
As the immediate impacts of soaring prices of mining commodities in international markets,
Export Volume of Some Mining Commodities, 2006-2011
Thousand Ton
45.000
40.000
Bijih besi dan konsentratnya
35.000
Bijih nikel dan konsentratnya
30.000
Bijih alumunium dan konsentratnya
25.000
20.000
15.000
10.000
5.000
2006
2007
2008
2009
2010
2011
the export volumes of some mineral commodities records significant increase in period 2007
– 2011. In the mean time, the development of domestic processing and smelting industries
for mineral products not yet shows promising progress for the last few years. Added values
from mining processing industries to national economy remain insignificant.
In attempt to control raw material or ore sales abroad and to augment the added values and
supplies of mineral resources in domestic markets, the Government has introduced policy
on export tax charged to raw material or ore commodity export as established under the
Financial Notes and Indonesian Budget 2013
3-15
Chapter 3
Government Revenues
Regulation of the Minister of Finance Number 75/PMK.011/2012 concerning the
Establishment of Export Goods Chargeable with Export Tax and Duty, which is effective as
from 16 May 2012.
Legal basis for the charge of export tax to export commodities refers to Article 2A paragraph
(2) Law Number 17 of 2006 concerning Amendment to Law Number 10 of 1995 concerning
Customs with a view to: (1) securing domestic demands; (2) protecting natural resources;
(3) anticipating drastic price hike of certain export commodities in international market; or
(4) maintaining price stability of particular commodities in domestic markets.
Export tax tariff charged to mineral ore commodity export is established under flat advolarem
system of 20 percent so as to control raw material export in effective way and to assure that
the mining companies has augmented their added values from the processing and smelting
of domestic mining commodities.
EXPORT TAX TARIFF GROUP FOR MINERAL ORES
Tariff Charge Group
Export Tax Tariff
(percent)
A.
Metallic Mineral
20
B.
Non-Metallic Mineral
20
C
Rocks
20
3.2.1.2 Non-Tax (PNBP) Revenue
As a source of Government revenue, PNBP always plays leading role. In APBN structure,
PNBP is classified into: (a) natural resources revenue of oil and gas and non-oil and gas
including general mining, forestry, fishery and geothermal; (b) Government revenue for
SOE profit sharing; and (c) other PNBP; and (d) revenue from public service body (BLU).
During 2007-2011, PNBP in general experienced fluctuated growth at 11.4 percent on the
average. In 2011, the realized PNBP revenue amounted Rp.331.5 trillion or to rise by 23.3
percent from its realization in 2010. In terms of composition, this higher realization in 2011
was due to more revenue earned from natural resources of oil and gas recording 26.7 percent.
It is particularly because of soaring ICP price following the skyrocketing oil price in global
markets.
In APNBP 2012, the PNBP revenue is targeted to reap Rp.341.1 trillion. With its realization
in semester I 2012 reaching Rp.235.8 trillion, the realization of PNBP in 2012 is expected to
amount Rp.344.6 trillion (101.0 percent of APBNP 2012). This is consistent with the estimate
of weakening rupiah exchange rate to US dollar and higher ICP. Based on such estimated
realization, PNBP will contribute 28.9 percent to domestic revenues. The trend of PNBP
revenue during 2007-2012 can be seen in Table 3.1.
3-16
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
Natural Resources Revenues
Natural resources revenues garnered from oil and gas and non-oil and gas are the main
sources of PNBP revenues. In 2007-2011 these natural resources revenues contributed 64.0
percent on the average to total PNBP with average growth of 12.6% per annum. The highest
growth was in 2008 at 68.9% with nominal value reaching Rp.224.5 trillion. In APBNP
2012 revenues from natural resources are expected to reach Rp.217.2 trillion. Based on the
realization in semester I 2012, the natural resources revenues in 2012 are predicted to amount
Rp.220.2 trillion or 101.4 percent of APNBP 2012 target.
Natural Resources Revenues of Oil and Gas
Oil and gas are the main sources for revenues collected from natural resources sector with
contribution 91.9 percent on the average during 2007-2011. In such period, this kind of
revenue was to show fluctuated growths with average of 11.6 percent. This performance is
subject to ICP and crude oil production fluctuation.
In APBNP 2012, the natural resources revenues
from oil and gas is predicted to reach Rp.198.3
trillion consisting of Rp.150.8 trillion from oil and
Rp47.5 triliion from gas. With realization in
semester I 2012 recording Rp.68.7 trillion, it is
expected that revenues of natural resources from
oil and gas reach Rp.201.1 trillion or 101.4 of the
target. This increase is due to higher ICP
realization target and rupiah depreciation to US
dollar in 2012. In addition, optimizing oil and gas
revenue is dependent on cost recovery efficiency
by decreasing cost recovery ratio to gross revenue
of downstream oil and gas sector. The trend of
natural resources from oil and gas during 20072011 can be seen in Graph 3.7.
GRAPH3.7
OIL AND GAS REVENUE TREND , 2007-2012
trillion Rp
250
200
150
124,8
100
50
0
2007
2008
2009
2010
2011
APBNP
Outlook
Oil Revenue
Gas Revenue
Source: the Ministry of Finance
Natural Resources Revenues of Non-Oil and Gas
Revenue earned from non-oil and gas natural resources is non tax revenue reaped from the
management of natural resources for activities
GRAPH3.8
in general mining, forestry, fishery and Trillion Rp
NON OIL AND GAS REVENUE, 2007—2012
geothermal. During 2007-2011 revenue 25,0
20,3
collected from non-oil and gas natural 20,0
18,8 19
resources was to grow by 25.8 percent on the
16,7
12,8
13,2
average. It was mainly from general mining 15,0
and forestry. The trend of this revenue of non- 10,0 8,1
oil and gas natural resources during 20075,0
2012 is presented in Graph 3.8.
As the largest source of revenue from non-oil
and gas natural resources, general mining
constantly increased. In 2007 this sector was
Financial Notes and Indonesian Budget 2013
0,0
2007
2008
General Mining
2009
Forestry
2010
2011
Fishery
APBNP Outlook
Geothermal
Source: the Ministry of Finance
3-17
Chapter 3
Government Revenues
to rise by 29.2 percent on the average. In APBNP 2012 its revenue is set to amount Rp15.3
trillion. In view of its realization in semester I 2012, revenue from general mining sector is
projected to meet the specified target. It will be pursued by tightening mineral and coal
production supervision and the management of mineral and coal commodity exports.
As to the revenue collected from forestry sector, in 2007-2011 it showed upward trend with
average growth of 11.1 percent. In APBNP 2012. Forestry revenue is projected to meet the
set target, mainly from reforestation fund Rp.1,504.6 billion, forest resource rent provision
(PSDH) Rp.1,304.9 billion, Right of Forest Exploitation (HPH) Licence Fee (IHPH) Rp.38.1
billion and forest area utilization fee Rp. 227.3 billion.
As another non-oil and gas revenue source, fishery sector in 207-2011 showed average
increase of 12.1 percent. The main factor supporting this fishery revenue is more intensive
collection of PNBP liabilities to the license holders of capture fishing boats. In APBNP 2012,
revenue from fishery sector is expected to reach Rp.150 billion consisting of fishery exploitation
fee (PPP) Rp.9.5 billion and fishery extraction levies (PHP) Rp.140.5 billion. Based on
realization in semester I 2012, it is predicted that fishery sector can meet its revenue target
with improved fishery farming, more domestic fishing boat fleets to replace foreign boats
and better licensing services (mobile unit) and collection administration.
The revenue of geothermal mining comes from Government’s 34 percent portion of net
operating income (NOI) energy/power generation minus tax liabilities and other charges as
set out in laws. Geothermal mining is primarly to support the development of renewable
energy. It is expected that in future this geothermal give greater contribution since Indonesia
is bestowed with enormous geothermal potentials. In APBNP 2012, the revenue earned from
geothermal mining is projected to amount Rp.0.4 trillion. In view of its realization in semester
I 2012, revenue from goethermal mining sector will reach Rp.0.5 in 2012 or 151.8 percent of
APBNP target. This increase is attributed to: (a) accelerated payment from Star Energy; (b)
improved NOI from Chevron Geothermal Indonesia (CGI) after the award of Certified of
Emission Reduction (CER); (c) higher selling price of steam from PLTU Kamojang plant;
and (d) lower drilling costs of CGI.
Government’s Portion of SOEs’ Profits
During 2007 – 2011, the performance of state
owned enterprises (SOEs) shows positive trend in
terms of assets, equity, operating income and
profitability and capitalization of the listed SOEs.
In the same period, total assets of SOEs are to rise
by 14 percent on the average with the equity to
grow by 11 percent on the average, and operating
income and profitability to increase by respectively
14 percent and 22 percent on the average.
Rp trillion
(sale,
assets)
GRAPH 3.9
SOE ACCOUNTING PERFORMANCE 2007-2011
Rp trillion
(equities, G/L)
3500
900
Sales
Assets
Equities
Net Gain (loss)
2962,7
3000
2234,4
2000
1725,1
600
1977,8
500
1387,7
1500
1000
700
2505,5
2500
1161,7
865,6
800
985,7
1077,7
400
300
200
500
100
Data on the capitalization of listed SOEs in
0
0
2007
2008
2009
2010
2011
Indonesian Stock Exchange (BEI) indicates
Source: the Ministry of Finance
market capitalization values from 18 SOEs per 30
December 2011 worth Rp.814.4 trillion or 23.0
percent of total BEI capitalization. Some SOEs chalked up remarkable achievements and
3-18
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
listed in “Forces Global 2000” of 2012. They include Bank BRI, Bank Mandiri, PT Telkom,
Bank BNI, PT Perusahaan Gas Negara, and PT Semen Gresik. In general, as of January
2012, there are 141 SOEs consisting of SOEs of Perum, 109 SOEs of Persero, and 18 SOEs of
Listed Perseroan. Besides, the Government holds
GRAPH 3.10
minority shares in 15 limited liabilities companies. Rp trillion
SOE CONTRIBUTION TO APBN, 2007−2011
The trend of SOEs’ accounting performance in 180,0
Privatization
162,4
Tax
160,0
144,1
2007-2001 is shown in Graph 3.9.
Dividend
132,9
125,5
140,0
With the bolstering SOEs’ performance, their
contribution to APBN is steadily increasing at 7.9
percent growth on the average. Of such amounts,
20.4 percent is from dividends, 78.8 percent from
tax revenue, and 0.8 percent from privatization
proceeds. SOEs’ contribution to APBN during 2007
to 2011 can be seen in Graph 3.10.
During 2007 – 2011, the Government revenue
earned from SOEs’ profit sharing was to rise by
5.0 percent on the average. The highest sharing
was received in 2010 at Rp.30.1 trillion or 15.5
percent of total PNBP. This exceeding Government
revenue from SOEs’ profit sharing in 2010 was
mainly attributed to price increase of mining
commodities in global markets that augmented the
profitability of SOEs engaged in mining sector. The
trend of Government revenue from SOEs’ profit
sharing is presented in Graph 3.11.
120,0
106,2
100,0
80,0
60,0
40,0
20,0
0,0
2007
2008
2009
2010
2011
Source: the Ministry of Finance
GRAPH 3.11
GOVERNMENT PORTION OF SOE PROFITS ,
2007-2012
Rp trillion
35,0
25,0
30,1
29,1
30,0
26,1
30,8
30,8
28,2
23,2
20,0
15,0
10,0
5,0
0,0
2007
2008
2009
2010
2011
APBNP Outlook
Source: the Ministry of Finance
In APBNP 2012, the revenue of SOEs’ profit sharing is set to reach Rp.30.8 trillion. The
revenue of SOEs’ dividends in 2012 based on realized profit increase in 2011 and higher price
of mining commodities in international markets that in turn will boost the business turnover
of SOEs in mining sector. With such promising performance, and in view of realization in
semester I reaching 47.2 percent, it is predicted that the target of Government’s revenue
from SOEs’ profit sharing in 2012 be realized.
Other Non-Tax Revenue (PNBP)
The main source of other Non-Tax revenue (PNBP) comes from services rendered by the
ministries/agencies (K/L) respective of their major tasks and functions. Generally speaking,
other non-tax revenue is divided into several types, namely: (a) income earned from the
management of state owned assets (BMN) and from sales proceeds; (b) service income; (c)
interest income; (d) attorney general office and court institutions; (e) education fees; (f)
gratification and confisticated corruption money; (g) levies and fines; and (h) other incomes.
During 2007 – 2011, the revenue collected from other non-tax sources was to grow by 11.2
percent on the average. During such period, incomes from sales and leasing (now income
earned from the management of state owned assets (BMN) and sales proceeds) and service
fees recorded the highest growth by respectively 50.4 percent and 24.7 percent on the average.
The trend of other non-tax revenue from 2007 – 2012 can be seen in Graph 3.12.
Financial Notes and Indonesian Budget 2013
3-19
Chapter 3
Government Revenues
To optimize Non-Tax Revenue of K/L
(Ministries/Agencies), in 2012 the following
actions will be taken: (a) improving service
delivery and administration of Non-Tax Revenue
of K/L (Ministries/Agencies); (b) revising some
regulations on types and tariff of Non-Tax
Revenue of K/L (Ministries/Agencies); and (c)
monitoring, evaluation and coordination of K/L
(Ministries/Agencies) non-tax revenue
management. With such policies, other non-tax
revenue in 2012 is expected to record Rp.0.4
trillion or 100.6 percent of APBNP 2012 target.
GRAPH 3.12
OTHER NON TAX REVENUE TREND , 2007−2012
trillion Rp
80
60
72,8
69,4
70
63,3
59,4
56,9
53,8
50
40
30
20
10
0
2012
For the last few years, there are seven K/L with significant contribution to this non-tax
revenue. They are inclusive of the Ministry of Communication and Informatics
(Kemenkoinfo), the Ministry of National Education (now Kemendikbud), the Ministry of
Health (Kemenkes), The Police of Republic of Indonesia (Polri), the Ministry of Laws and
Human Rights (Kemenhkumham), National Land Agency (BPN), and the Ministry of
Transportation. The trend of other non-tax revenue from such ministries can be seen in
Table 3.10.
TABLE 3.10
PNBP TREND FOR THE 7 ;ARGEST K/L, 2007 – 2012
(trillion rupiah)
No
Ministries/Agencies (K/L)
2007
2008
2009
2010
2011
2012
APBNP
1
The Ministry of Comm. & Informatics
4,4
7,0
9,0
10,9
9,5
10,1
2
The Ministry of National Education
3,6
1,6
0,3
2,6
2,4
1,9
3
The Ministry of Health
3,0
2,9
3,3
0,4
0,4
0,2
4
National Police
1,5
1,7
1,8
2,6
3,4
4,6
5
National Land Agency
0,8
0,9
1,0
1,2
1,3
1,7
6
The Ministry of Laws and Human Rights
0,9
1,2
1,4
1,8
2,1
2,2
7
The Ministry of Transportation
0,4
0,5
0,9
0,8
1,2
0,7
14,6
15,8
17,7
20,3
20,3
21,3
Total
Source: various ministries/agencies
In 2007-2011, the Non-Tax revenue of the Ministry of Communication and Informatic
recorded average rise of 21.2 percent. In 2012, the non-tax revenue from this Kemenkominfo
is expected to amount Rp.10.1 trillion. To support its realization, the Government will take
some attempts, including: First, prepare new regulation to accelerate the opening of new
opportunities in the utilization of frequencies; Second, comprehensive review of formula
and rate of new variables in User Right Cost (BHP) of certain frequency band allocation;
Third, restructuring and updating database system; Fourth, licensing process automatization/
3-20
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
modernization; Fifth, intensifying non-tax collection
GRAPH 3.13
to frequency spectrum users, telecommunication Rp. trillionPNBP TREND OF KEMENKOMINFO, 2007-2012
equipment vendors, and telecommunication 12
10,9
10,1
operators; Sixth, verification and examination of 10
9,5
9,0
telecommunicaion BHP payments along with BPKP 8
7,0
auditors as counterparts; Seventh, intensive
6
4,4
socialization to telecommunication operators; Eighth,
4
law enforcement to illegal telecommunication, post
and broadcasting operators and frequency users; 2
Ninth, simplifying licensing process; and Tenth, 0
2007
2008
2009
2010
2011
2012
improving the competency of non-tax revenue
APBNP
Source: Kemenkominfo
managers to be more effective and efficient. The trend
of Kemenkominfo Non-Tax revenue can be seen in Graph 3.13.
Meanwhile, non-tax revenue of the Ministry of National Education (now the Ministry of
Education and Culture) during 2007 – 2011 was to
GRAPH 3.14
record diverse growth fluctuated at 9.6 percent on the
PNBP TREND OF KEMENDIKBUD,
average. In APBNP 2012, the Kemendikbud’s non- Rp trillion
2007-2012
4
3,6
tax revenue is targeted to amount Rp.1.9 trillion. To 4
pursue such target, several attempts will be taken: (a) 3
2,6
2,4
socialization of BLU financial management to state 3
1,9
1,6
universities (PTN); (b) developing non-tax revenue 2
2
management for PTNs; (c) dealing with findings 1
0,3
relating to the direct use of non-tax revenue with BPK, 1
BPKP, Inspectorate General of Kemendikbud, and 0
2007
2008
2009
2010
2011
2012…
other law enforcement officers; (d) recommending
Source: Kemendikbud
revisions to regulations on non-tax revenue for PTNs;
and (e) not increasing tuition fees for universities. The trend of Kemendikbud’s non-tax revenue
can be seen in Graph 3.14.
Non-tax revenue from the Ministry of Health during
GRAPH 3.15
2007 – 2011 was to record negative growth of 39.6
PNBP TREND OF KEMENKES, 2007-2012
percent on the average. It was due to changing Rp trillion
3,3
management pattern of state owned general hospitals 3,5 3,0
2,9
3,0
into BLU (Public Service Agency). In APBNP 2012,
2,5
the non-tax revenue of Kemenkes is set to reach 2,0
Rp.0.2 trillion. To pursue this target the following 1,5
actions will be taken: (a) improving the quality of 1,0
0,4
0,4
0,2
services and human resources; (b) enhancing the 0,5
0,0
integration of health facilities and infrastructure
2007
2008
2009
2010
2011
2012
according to the specified standards; (c) augmenting
APBNP
hospital cost recovery toward self-reliant and Source:Kemenkes
computerized financial administration; and (d)
developing safe, effectual and quality health service model. The trend of non-tax revenue
from the Ministry of Health can be seen in Graph 3.15.
During 2007-2011 the non-tax revenue collected by the National Police (Polri) was to rise by
23.1 percent on the average. Meanwhile, the target of Polri’s non-tax revenue in 2012 is set
Financial Notes and Indonesian Budget 2013
3-21
Chapter 3
Rp trillion
5,0
4,5
4,0
3,5
3,0
2,5
2,0
1,5
1,5
1,0
0,5
0,0
2007
Government Revenues
GRAPH 3.17
PNBP TREND OFKEMENKUMHAM, 2007-2012
GRAPH 3.16
PNBP TREND OF POLRI, 2007-2012
4,6
3,4
1,5
1,8
1,0
2,1
2,2
2011
2012
APBNP
1,8
2,0
2,6
1,7
Rp trillion
2,5
1,2
1,4
0,9
0,5
2008
Source: Kepolisian RI
2009
2010
2011
2012
APBNP
0,0
2007
2008
2009
Source: Kemenkumham
2010
at Rp.4.6 trillion that will be achieved with: (a) introducing SSB services (Driving License,
STNK and BPKB) and fast, proper, simple, low-cost, humane and transparent services with
the main targets of 15 minute services for Driving License and STNK renewals without any
middleman service during the whole process; (b)intensifying traffic law enforcement operation
to educate motorists who are still lack of traffic laws; (c) establishing online transparency
access with online SSB information system services; (d) mobile service facilities for reporting
notice (SKLD); (e) enhancing human resources quality and functional training on traffic;
and (f) low enforcement for traffic offenders to establish legal certainty and safety, security,
law and order and smooth traffics. The trend of Polri’s non-tax revenue can be seen in
Graph 3.16.
During 2007-2011, the non-tax revenue of the Ministry of Laws and Human Rights
experienced growth of 23.6 percent on the average with the main factor contributing for this
increase was revenue from imigration and legal services. In APBNP 2012, the non-tax revenue
of the Ministry of Laws and Human Rights is set at Rp.2.2 trillion. To achieve this target, the
Government will take some measures including: (a) improving services with more
immigration offices; (b) increasing the number of visa on arrival (VKSK) immigration
verification venues (VKSK); (c) developing technology equipment in immigration affairs;
and (d) automatization of intellectual right service system. The trend of Non-Tax Revenue
for the Ministry of Laws and Human Rights can be seen in Graph 3.17.
In 2007-2011, the non-tax revenue of National Land Agency (BPN) was to rise by 12.9
percent on the average. In APBNP 2012, the target non-tax revenue of BPN is set at Rp.1.7
trillion. To attain this target, the Government will take some actions, such as: (a) introducing
pro-active service model with Mobile Land Office for Land Certification (Larasita);
(b)developing the service capacity with additional serveyors and judicial data collection
officials, including involving licensed surveyors; and (c) increasing non-tax service tariff
according to PP No. 13 of 2010 concerning Tariff and Types of Non-Tax Revenue applicable
for BPN. The trend of non-tax revenue of BPN can be seen in Graph 3.18.
The non-tax revenue of the Ministry of Communication during 2007-2011 recorded average
increase of 30.7 percent. In APBNP 2012, the non-tax revenue to be reaped by the Ministry
of Communication is set at Rp.0.7 trillion. To realize such target, the Government will take
several attempts of: (a) optimizing the facilities generating non-tax revenue; (b) enhancing
the quality and capacity of research activities; and (c) intensifying cooperation, coordination
3-22
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
GRAPH 3.19
PNBP TREND OF KEMENHUB, 2007-2012
GRAPH 3.18
Rp trillon
PNBP TREND OF BPN 2007-2012
1,8
1,6
1,3
1,4
1,2
1,2
1,0
0,9
1,0
0,8
0,8
0,6
0,4
0,2
0,0
2007
Source: BPN
2008
2009
2010
2011
1,7
Rp trillion
1,4
1,2
1,2
0,9
1,0
0,8
0,6
0,8
0,7
0,5
0,4
0,4
0,2
0,0
2012
APBNP
2007
2008
2009
2010
Source: the Ministry of Transportation
2011
2012…
and socialization with users, customers or other stakeholders relating to non-tax revenue
from transportation sector. The trend of non-tax revenue of the Ministry of Transportation
can be seen in Graph 3.19.
Revenue from Public Service Agency (BLU)
Pursuant to PP Number 23 of 2005 concerning BLU for Finance Management, one target to
pursue from the establishment of BLU is to improve public services to the communities so as
to enhance public welfare and educate the nation. BLU revenue is considerably subject to
the volume of service activities, tariff of the services provided and rendered as established by
the Minister of Finance, quality of services and management administration of BLU.
During 2007-2011, BLU revenue showed constant increase at 75.3 percent on the average.
This realization was attributed to more working units (satker) changed into BLU. In 2007,
BLU was executed by nine K/Ls (ministries/agencies) engaged in goods/services sector and
financing sector. In 2012, BLU are carried out by
19 K/Ls in health sector, financing sector,
GRAPH 3.20
BLU REVENUE TREND , 2007−2012
telecommunication sector, education sector, Rp trillion
25
technology sector, regional management, etc.
Target of BLU revenue in APBNP 2012 is set at
Rp.20.4 trillion. To achieve such target, some
efforts will be taken, i.e. to enhance public services
with better human resources quality, to improve
effectiveness and efficiency of BLU finance
management, and to promote transparency and
accountability in finance management of
Government institutions. The trend of BLU
revenue can be seen in Graph 3.20.
20,1
20,4
2011
APBNP
2012
20
15
10,6
10
5
8,4
3,7
2,1
0
2007
2008
2009
2010
3.2.2 Grant Proceeds
The realization of grant proceeds in 207-2011 recorded an average growth of 32.6 percent.
In ABPNP 2012, revenue of grant proceeds is expected to amount Rp.0.8 trillion. In view of
its realization in semester 2012, grant proceeds expected to receive in 2012 can meet the
Financial Notes and Indonesian Budget 2013
3-23
Chapter 3
specified target. Factors contributing the realization
of grants include Government policy that facilitate
the donor agencies in granting their assistance to
the Government of Indonesia, i.e. the grant that
will be channelled in well-planned mechanism or
consist of direct grants. In addition, this kind of
revenue is dependent on policy taken by the
Government in introducing grant accounting
system and grant management mechanism. In this
case, K/L being the beneficiaries must record all
grant proceeds in APBN. The trend of grant proceeds
in 2007-2012 can be seen in Graph 3.21.
Government Revenues
GRAPH 3.21
GRANT REVENUE TREND ,
2007−2012
trillion
6,0
5,3
5,0
4,0
3,0
3,0
2,3
2,0
1,7
1,7
0,8
1,0
0,0
2007
2008
2009
2010
2011
APBNP
2012
Source: the Ministry of Finance
3.3 Challenges and Opportunities of Government Revenue Policies
In 2013, policies of Government revenue mobilization are expected to be more complicated.
On one side, demands on budget allocation will mount for the preparation of “the last round”
of RPJMN 2009-2014. On the other side, some macroeconomic development may be not
always positive to the accumulation of Government revenues.
Opportunities and challenges in tax collection as the primary sources in financing national
development concern with tax extensification and intensification to various tax sources,
especially from informal sectors, which have yet to give significant contribution to overall
Government revenue thus far.
In addition, many challenges potential to bring about negative impacts to Government
revenue from international trade sector are expected to emerge. In addressing free trade
challenges, Indonesia has inked some international trade agreements with other countries,
either at regional level such as ASEAN Trade In Goods Agreement (ATIGA) for AFTA, ASEANChina Free Trade Area (ACFTA), ASEAN-Korea Free Trade Area (AKFTA), and ASEANIndia Free Trade Area (AIFTA), or bilateral agreement like Indonesia-Japan Economic
Partnership Agreement (IJEPA). The signing of such agreements will affect Indonesian policy
with regard to import tax tariff, which tends to lower. However, international trade agreements
will open broader markets for Indonesian products that in turn revenue from import tax of
raw materials will rise and foresign exchange from Indonesian products will be also expected
to boost.
From export side, the charge of export tax for Indonesian export commodities, which are
downstream character or raw materials, is potential to hamper the export and as such generate
negative impacts to export tax revenue collection. However, foreign exchange from export
will increase when the Indonesian products are exported in processed goods, instead of raw
materials. Based on the latest conditions, it is identified that domestic upstreaam industrial
development has showed some successes, especially for CPO commodity. Now the export of
CPO has been shifted to the export of its derivative products.
Another challenge is export tax revenue that may fluctuate with the prices of export goods in
international markets. This happens because the objective of export tax is not an instrument
to support Government revenues but more aimed at: (a) satisfying domestic raw material
requirements; (b) preserving natural resources; (c) maintaining the stability of prices for
3-24
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
certain domestic commodities; and (d) anticipating the exceeding price hike for certain export
commodities in international market.
Challenges in Non-Tax Revenue mobilization in 2013 concern with the improved development
and supervision of non-oil and gas natural resources to optimize revenues from these sectors.
In addition, the Government will revise regulations on non-tax revenue and improve nontax revenue management mechanism, especially for non-tax revenue of K/L. Especially for
SOEs dividend policy, the Government has to deal with challenge of setting the most appropriate
pay out ratio in optimizing SOEs dividends.
3.4 Target Government Revenues in 2012
The Government revenues will play more leading roles in financing Government expenditures,
either for Central Government Expenditures or Transfer to Regions. This more significant
role is consistent with Government’s initiatives of cutting budget deficit and loans.
In 2013, the Government Revenues are projected to amount Rp.1,529.7 trillion. They consist
of domestic revenue Rp.1,525.2 trillion and grant proceeds Rp.4,5 trillion. These projections
are based on macroeconomic assumptions such as economic growth, inflation, rupiah
exchange rate to US dollar, oil and gas liftings, and oil price on top of policies taken by the
Government in 2013 can be seen in Table 3.11.
TABLE 3.11
GOVERNMENT REVENUE, 2012 - 2013
(trillion Rupiah)
2012
Description
I.
DOMESTIC REVENUE
1. Tax Revenue
a. Domestic Tax
1) Income Tax
a) Oil and Gas
b) Non Oil and Gas
2) Value Added Tax
3) Land and Building Tax
4) Excise
5) Other Tax
b. International Trade Tax
1) Import Tax
2) Export Tax
2. Non Tax Revenue
a. Natural Resources Revenue
1) Oil and Gas
a) Oil
b) Gas
2) Non Oil and Gas
a) General Mining
b) Forestry
c) Fishery
d) Geothermal
b. Gov. Portion of SOE's proft
c. Othe Non Tax Revenue
d. BLU Revenue
II. GRANT REVENUE
Total
APBNP
2013
Outlook *)
APBN
1.357,4
1.016,2
968,3
513,7
67,9
445,7
336,1
29,7
83,3
5,6
47,9
24,7
23,2
341,1
217,2
198,3
150,8
47,5
18,8
15,3
3,1
0,2
0,3
30,8
72,8
20,4
0,8
1.366,4
1.021,8
970,9
499,0
76,6
422,4
347,3
31,7
87,9
5,0
50,9
26,1
24,8
344,6
220,2
201,1
144,5
56,6
19,0
15,3
3,1
0,2
0,5
30,8
73,2
20,4
6,0
1.525,2
1.193,0
1.134,3
584,9
71,4
513,5
423,7
27,3
92,0
6,3
58,7
27,0
31,7
332,2
197,2
174,9
120,9
54,0
22,3
17,6
4,2
0,2
0,4
33,5
78,0
23,5
4,5
1.358,2
1.372,4
1.529,7
*) Accordinto Outlook in APBN 2012 Implementation Report Semester I
Source: the Ministry of Finance
Financial Notes and Indonesian Budget 2013
3-25
Chapter 3
Government Revenues
3.4.1 Domestic Revenue
Domestic revenue, which composes of tax and non-tax revenues are considerably dependent
on policies concerning Government revenues presently applied or to be applied by the
Government in 2013 and the prospect of domestic and international economic development.
In 2013, tax revenue is set at Rp.1,193.0 trillion with non-tax revenue projected to reach
Rp.332.2 trillion.
3.4.1.1 Tax Revenue
Target of tax revenue in 2013 is set at Rp.1,193.0 trillion consisting of domestic tax revenue
Rp.1,134.3 trillion and international tax revenue Rp.58.7 rillion. The domestic tax revenue
composes of income tax Rp.584.9 trillion, value added tax Rp.423.7 trillion, land and building
tax Rp.27.3 trillion, excise Rp.92.0 trillion, and other taxes Rp.6.3 trillion. On the other side,
revenue from international trade tax consists of import tax Rp.27.0 trillion and export tax
Rp.31.7 trillion. These targets will be supported with relatively stable macroeconomic
foundation in 2013 as reflected in economic growth, which is expected to rise by 6.8 percent,
and improved quality in tax administration and extra efforts. In narrow sense, (tax revenue
divided by GDP), tax ratio in 2013 will record 12.9 percent. In broad sense, tax ratio will
include tax revenue plus revenue from oil and gas natural resources and regional tax divided
by GDP that will produce tax ratio of 15.8 percent in 2013.
The Government will take any measure to boost tax revenue without disrupting economic
growth and investment climate and business world. In general, the highlights of tax policy
to take in 2013 are (a) to continue basic tax policies that have been introduced in 2012; (b) to
intensify potential tax sources; (c) to enhance the quality of verification and investigation;
(d) to improve tehnology information system; (e) to revise tax policy aimed at expanding
tax base; (f) to intensify national tax census; (g) to strengthen customs and excise supervision
and services; (h) excise extensification; (i) to increase PPnBM tax tariff for taxable luxury
goods other than motor vehicles; and (j) to provide fiscal incentives for strategic economic
activities, such as PPnBM exemption or cut for low-cost and hybrid and low carbon emission
motor vehicles, and facility of uncollected VAT and PPnBM tax for taxable goods receiving
import tax exemption under certain criteria.
To support the realization of tax revenue target in 2013, apart from generic policies, the
Government will exercise the following policies:
1. Revising policies on the exploration of potential tax sources from high-profile sectors,
including (a) strengthening major tasks and functions (tupoksi) of Special Tax Office
(KPP) for Mining and Oil and Gas Sector;(b) hiring surveyor agencies to reinforce primary
database in mining and plantation sector; and (c) actively participating in renegotiation
process of tax aspects on mining, oil and gas and other mineral exploitation sharing
agreements.
2. Developing quality assurance unit to enhance the quality of verification and investigation
to establish legal certainty, including firmer and more equitable law enforcement.
3. Optimizing the adoption of information technology with: (a) integration of DJP
information system into project for Indonesia tax administration reform (PINTAR); (b)
using approweb (web based profile application); and (c) introducing tax collection
dashboard application.
3-26
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
4. Revising national tax census program and integrating with other program tax base
expansion.
5. Improving international tax aspect to reinforce the national interest and to prevent tax
evasion.
6. Reinforcing tax revenue by synchronizing national clearance system (SKN) between
Bank Indonesia and Government Revenue Module (MPN).
To secure the target revenue from customs and excise in 2013, the Government will continue
technical policies in customs affairs or in service and supervision sectors. For the former, the
technical policies to take include: (a) improving the accuracy of custom value verification
and classification; (b) enhancing the effectiveness of physical examination to goods; and (c)
optimizing the collectability of customs and excise receivables. In service and supervision
sector, the technical policies to be adopted are: (a) developing customs and excise service
automatization; (b) consistent customs services, i.e. 24 hours per day and 7 days in a week
for some ports; (c) implementing integrated customs service regions (KPPT) to abate goods
accumulation in ports; (d) revising the implementation of Indonesia National Single Window
(INSW); (e) restricting work relation of supervisory units; (f) developing systematic profiling
pattern for risk management; (g) continuing the adoption of operation facilities; (h)
optimazing documentation and reporting standardization; (i) supervisory process
automatization either vertically or horizontally; (j) development an integrated complaint
resolution infrastructure; (k) macroeconomic review and fiscal policy to FTA scheme; (l)
automated customs and excise receivable administration; and (m) introducing billing system
for excise services.
With regard to the policies on international trade, the Government plans to maintain its
commitments to international goods trade cooperation agreements by decreasing import
tax tariff in 2013 as agreed in international agreements such as: (a) Indonesia-Japan Economic
Partnership Agreement (IJEPA); (b) ASEAN-India Free Trade Area (AIFTA); and (c)
ASEAN-Australia-New Zealand Free Trade Area (AANZFTA). In addition, to secure supplies
for domestic demands. To protect natural resources, to anticipate drastical price rise of certain
export commodities in international markets and to maintain price stability of certain
commodities in domestic markets, the Government will propose policies on the extensification
of goods taxable for export tax in 2013.
Policies in tax sector are not only aimed at increasing tax revenue but also to promote the
economy with fiscal incentives, such as PPnBM exemption and cut to encourage Government
program in motor vehicle industry development at affordable price, and the production of
hybrid and low carbon emission vehicles. The Government remains committed to grant tax
facilitation consisting of tax charged to the Government (DTP) for: (a) PPh DTP for
geothermal commodities; (b) PPh DTP for interest, yields and income of the third parties for
services rendered to the Government with regard to the offering of SBN (Government Bonds)
in international markets; and DTP for import tax.
Income Tax Revenue
Revenue garnered from income tax (PPh) in 2013 is expected to amount Rp.584.9 trillion
consisting of oil and gas PPh Rp.71.4 trillion and non-oil and gas PPh Rp.513.5 trillion. Oil
Financial Notes and Indonesian Budget 2013
3-27
Chapter 3
Government Revenues
and gas PPh contributes 12.2 percent with non-oil and gas PPh 87.8 percent. For the latter, it
includes PPh DTP (tax charged to the Government) Rp.3.8 trillion.
Target oil and gas PPh Rp.71.3 trillion is subject to several economic factors such as: ICP
assumption and oil and gas lifting. As to the estimated on-oil and gas PPh at Rp.513.5 trillion
in 2013 it will be vulnerable to economic growth and inflation. In addition, policies in tax
sector will be carried out in sustainable manner with a view of boosting PPh revenue in 2013
so that the target PPh revenue from non-oil and
GRAPH 3.22
gas natural resources can be achieved.
PPh NON OIL AND GAS REVENUE , 2012—2013
To optimize PPh revenue in 2013, the
Government has prepared a policy directed to
expand tax base and at the same time to increase
the purchasing capacity of low-income people and
small and medium enterprises with: (a)
simplifying PPh charge method for certain sector;
and (b) revising and restructuring policy on final
PPh charge; The projection of PPh revenue in 2012
and 2013 can be seen in Graph 3.22.
trillion Rp
Other
IT Final and Fiscal
IT article 21
600,0
500,0
445,7
422,4
400,0
110,0
85,7
300,0
55,4
55,3
513,5
111,8
67,5
103,7
89,2
90,6
191,1
190,8
230,5
2012
APBNP
2012
Outlook
2013
APBN
200,0
100,0
0,0
Source: the Ministry of Finance
PPN and PPnBM Revenue
The Government revenue from PPN (VAT) and PPnBM (Sales Duty for Luxury Goods) is
set to achieve target of Rp.423.7 trillion consisting of PPN Rp.402.8 trillion, PPnBM Rp.20.9
trillion, domestic PPN and PPnBM Rp.259.4 trillion and Import PPN and PPnBM Rp.164.3
trillion. This relatively exceeding target is due to high assumption of economic growth
supported with household consumption and import growths.
To attain such target, the Government will revise policies in PPN collection directed to PPN
system administration restructuring, including: (a) improving corporate taxpayers
confirmation (PKP) mechanism with re-registration program; (b) revising PPN information
and monitoring system with e-invoice system and tax invoice format mentioning the goods
applying harmonized system/HS code; and (c) restructuring PPN charge and collection system
with input tax recording mechanism that can be used as deemed tax.
In addition, the Government will intensify PPnBM. It is to increase the contribution of
PPnBM in total tax revenue, to protect small or traditional producers, and to assure
proportional consumption tax charge between high income customers and low income
customers. Some regulations adopted as legal basis in PPnBM collection intensification are
Law Number 42 of 2009 concerning PPN (VAT), PP Number 1 of 2012 concerning the
Implementation of VAT Law, and PP Number 12 of 2006 concerning the seventh amendment
of PP No. 145 of 2000 concerning Groups of Taxable Goods (BKP) as Luxury Items, which
are chargeable for Sales Duty for Luxury Goods. This PPnBM intensification is carried out
by increasing PPnBM tariff for taxable goods categorized as luxury goods other than motor
vehicles. Besides, the taxable luxury goods chargeable with PPnBP tax will be expanded. The
projection of PPN and PPnBM revenue in 2012 and 2013 can be seen in Graph 3.23.
3-28
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
Land and Building (PBB) Tax Revenue
Revenue from PBB tax in 2013 is expected to record Rp.27.3 trillion. This target has taken
into account the transfer of PBB collection for urban and rural sectors to the regional
governments. Of such target, PBB tax revenue from oil and gas mining, plantation and
forestry contributes respectively Rp.22.3 trillion, Rp.1.3 trillion and Rp.0.3 trillion. Meanwhile,
PPB from urban and rural sectors is expected to amount Rp.0.4 trillion and Rp.2.6 trillion
respectively.
In 2013, the Government will continue policy of transfering the administration of PBB revenue
from urban and rural sectors, which is previously considered as Central Government tax to
regional tax. It conforms with the mandate of Law Number 29 of 2009 requiring the transfer
of PPB tax from urban and rural sectors into regional government tax that has been
commenced since 2011 and planned to be accomplished in 2014. The projection of PPB
revenue in 2012 and 2013 can be seen in Graph 3.24.
GRAPH 3.24
LAND AND BUILDING TAX REVENUE,
2012—2013
GRAPH 3.23
VAT AND LST REVENUE , 2012−2013
Triliun Rp
33,0
VAT/LST Import
Domestic VAT/LST
450,0
350,0
164,3
250,0
157,1
29,7
29,0
200,0
28,0
150,0
100,0
31,0
30,0
300,0
128,5
31,7
32,0
400,0
259,4
207,6
27,3
27,0
190,2
26,0
50,0
25,0
0,0
2012
APBNP
2012
Outlook
2013
APBN
Source: the Ministry of Finance
2012
APBNP
2012
Outlook
2013
APBN
Sumber:the
Source:
Kementerian
Ministry of Keuangan
Finance
Excise Revenue
Excise revenue in 2013 is targeted to reach Rp.92.0 trillion, consisting of excises from tobacco
products Rp.88.0 trillion and MMEA and EA excise of Rp.4.0 trillion. Despite tobacco excise
tariff increase, revenue from this tobacco excise will not experience significant rise. It is
expected that cigarette productions suffer light slowdown in 2013. On the other side, extra
efforts on the eradication of illegal banderoles will decrease in line with the deminishing
illegal banderole distribution and less filtered cigarettes.
To optimize the Government revenue from excise, the Government will propose policy on
the extensification of excisable goods and excise intensification with excise tariff increase for
tobacco products in 2013 to the Parliament (DPR). The excise extensification policy will
refer to Article 2 paragraph (1) Law Number 39 of 2007 concerning Excise, regulating that
for certain goods, excise may be charged if the said goods contain the following properties or
characteristics: (a) their consumption must be controlled; (b) their distribution must be
supervised; their consumption can bring about negative impacts to human beings or
environment; or (d) their consumption is liable for duty charges. The projectionf of excise
revenue for 2012 and 2013 can be seen in Graph 3.25.
Financial Notes and Indonesian Budget 2013
3-29
Chapter 3
Government Revenues
Other Tax Revenue
The revenue collected from other tax in 2013 is predicted to record Rp.6.3 trillion. This target
is based on high economic growth in 2013 that will stimulate transactions requiring duty
stamps. Duty stamps are the largest source for other tax revenue. Its contribution for the last
five years was 79.4 percent on the average. The projection of other tax revenue in 2012 and
2013 can be seen in Graph 3.26.
GRAPH 3.25
EXCISE REVENUE , 2012−2013
GRAPH 3.26
OTHER TAX REVENUE , 2012−2013
trillion Rp
trillion Rp
92,0
95
90
85
7,0
6,3
5,6
6,0
87,9
5,0
83,3
5,0
4,0
3,0
80
2,0
75
1,0
0,0
70
2012
APBNP
2012
Outlook
2013
APBN
Source: the Ministry of Finance
2012
APBNP
2013
APBN
Source:the Ministry of Finance
Import Tax Revenue
In 2013 it is targeted that the import tax
revenue will amount Rp.27.0 trillion
including tax charged to the Government
(DPT) Rp.1.0 trillion. Import tax is prone to
the volume and value of imports, which follow
international trade volumes. The projection
of import tax in 2012 and 2013 can be seen in
Graph 3.27.
2012
Outlook
GRAPH 3.27
IMPORT TAX REVENUE, 2012−2013
trillion Rp
28
27,0
27
27
26,1
26
26
24,7
25
25
24
24
2012
APBNP
2012
Outlook
2013
APBN
Export Tax Revenue
The revenue from export tax in 2013 is set to
amount Rp.31.7 trillion. This target is however
subject to the charge of export tax to mineral
ore export and average CPO price in 2013 at
international markets. The projection of
export tax revenue in 2012 and 2013 can be
seen in Graph 3.28.
GRAPH 3.28
EXPORT TAX REVENUE, 2012−2013
trillion Rp
35
31,7
30
25
23,2
24,8
20
15
10
5
3.4.1.2 Non Tax Revenue (PNBP)
0
2012
APBNP
2012
Outlook
2013
APBN
In 2013, Non Tax Revenue (PNBP) will be Source: the Ministry of Finance
more optimized to give greater contribution
as domestic revenue source. At present, natural resources remain dominant sources for this
Non Tax Revenue (PNBP), especially from oil and gas sector. The Government will further
3-30
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
intensify revenue of non-oil and gas natural resources especially from general mining. Target
PNBP revenue in 2013 is Rp.332.2 trillion based on the established macroeconomic
assumptions, notably oil price, rupiah exchange to US dollar and oil and gas liftings.
Natural Resources Revenue
In 2013, revenue from natural resources is expected to record Rp.197.2 trillion. As the main
source of PNBP revenue, natural resources give contribution 59.4 percent. The majority of
natural resources revenue comes from oil and gas, i.e. 88.7 percent and the other 11.3 percent
from non-oil and gas resources.
Oil and Gas Revenue
In 2013, the Government revenue from oil and
gas resouces is predicted to reach Rp.174.9 trillion.
It comes from oil Rp.120.9 trillion and natural gas
Rp.53.9 trillion. This target is mainly subject to oil
price, oil and gas lifting as basis for the calculation
of oil and gas revenue, and policies to be taken in
2013. Some policies that will be taken are: (a) to
achieve target crude oil lifting and gas lifting; (b)
efficient cost recovery and to decrease cost recovery
ratio to gross revenue; and (c) to intensify the
collection of Government portion from oil and gas
sales. The projection of oil and gas revenue in 2012
and 2013 can be seen in Graph 3.29.
GRAPH 3.29
OIL AND GAS PNBP REVENUE,
2012 - 2013
trillion Rp
Oil
Gas
250
200
47,5
56,6
150
54,0
100
150,8
144,5
2012
APBNP
2012
Outlook
120,9
50
0
2013
APBN
Source : the Ministry of Finance
To achieve oil lifting taget, some efforts will be taken, i.e. (a) to optimize production of the
existing fields including the introduction of enhanced oil recovery (EOR); (b) to accelerate
the development of new fields and idle structure; (c) more attractive terms and conditions
for work areas in remote area and/or deep seas; (d) to improve coordination with the related
institution for dispute settlement on license regulation and overlap sites so as to increase the
national oil production; and (e) to exercise Inpres No. 2 of 2012 concerning National Oil
Production Increase.
Non-Oil and Gas Revenue
The revenue of non-oil and gas resources in
2013, which comes from general mining,
forestry, fishery and geothermal is expected to
record Rp.22.3 trillion. The revenue of general
mining is still dominating with contribution
78.8 percent. The projection of non-oil and gas
revenue in 2012 and 2013 can be seen in
Graph 3.30.
In 2013, the revenue of general mining is set
to achieve Rp.17.6 trillion. It comes from land
rent Rp.0.7 trillion and royalty Rp.16.9 trillion.
Financial Notes and Indonesian Budget 2013
GRAPH 3.30
NON OIL AND GAS PNBP REVENUE, 2012─2013
trillion Rp
General Mining
Forestry
25
20
Fishery
Geothe rmal
22,3
18,8
19,0
15
10
5
0
2012 APBNP
2012 Outlook
2013 APBN
Source: the Ministry of Finance
3-31
Chapter 3
Government Revenues
This target has taken domestic market obligation (DMO) under consideration to supply the
upward domestic coal demands.
To optimize general mining revenue, the Government will take some policies, i.e.: (a) to
adjust types and tariffs of PNBP applicable for mining activities; (b) to improve mineral and
coal production and marketing supervision, national mineral and coal production inventory;
and (c) PNBP potential inventory and verification from general mining sector.
The revenue from forestry sector in 2013 is planned to record Rp.4.1 trillion. It is from HPH
(Right of Forest Exploitation) License Fee (IHPH) Rp.12.6 billion, Forest Resource Rent
Provision (PSDH) Rp.1.9 trillion, reforestation fund Rp.1.8 trillion and forest area use Rp.395.2
billion. This target for forestry revenue in 2013 is mainly supported with higher PSDH revenue
from the increasingly forest products. The said target has taken into account the impacts of
policy on the moratorium of new IHPH license award.
The Government will continually attempt to increase revenue from forestry sector while
preserving the environment with the following policies: (a) developing information technology
based forest product management system (PUHH); (b) increasing production and
diversification of natural forest enterprises; (c) issuing Commercial Timber Forest Products
Utilization Permit – Natural Forests/Ecosystem Restoration at logged over area/LOA); and
(d) expanding reserve areas for plant forest utilization.
Revenue from fishery sector in 2013 is expected to reach Rp.0.18 trillion (0.1 percent of total
PNBP revenue) coming from fishery exploitation fee (PPP) including foreign fishing fee
(PPA), and fishery product levy (PHP). While the revenue of fishery sector is relatively small,
in national economic scale this sector is expected to increase. Such improving role is evident
from more intensive economic activities in fisherman activity centers at fishery ports and
fish markets, widespread fishery culture in many fish farming centers, and fish processing,
and regional revenue from marine and fishery charges.
Some policies to be taken by the Government to optimize revenue from fishery sector are:
(a) to improve services and administer business permits; (b) to intensify marine and fishery
resources supervision; (c) to increase facilities and infrastructure; (d) to rise PNBP tariff to
give certainty to the users of marine and fishery service sectors; (e) to increase the standard
price of fish (HPI); and (f) to assure business operation in marine and fishery sector.
Revenue from geothermal in 2013 is set at Rp.0.4 trillion. Some efforts to optimize geothermal
revenue include the introduction of income tax charged to the Government (PPh DTP) for
geothermal operators, whose licenses, concession permits or contracts are signed before the
enactment of Law Number 27 of 27 of 2003 concerning Geothermal. Other attempts are
intensification and extensification, regulation drafting and revision, and fiscal and non-fiscal
policy supports for investments in geothermal sector.
The Government’s Portion of SOEs’ Profit Sharing
In 2013 the Government’s portion of SOEs’ profit sharing is expected to amount Rp.33.5
trillion. This target comes from high profitability estimate in financial year 2012 as a result
of the bolstering performance of some SOEs. To optimize this revenue, the Government will
take some policies as follows: (a) pay out ratio (POR) 0 percent to 25 percent for SOEs in
forestry sector, insurance, and SOEs suffering loss accumulation; (b) POR 5 percent to 55
3-32
Financial Notes and Indonesian Budget 2013
Government Revenues
percent for SOEs booking profits without loss
accumulation; (c)POR 40 percent to 45
percent for PT Pertamina; (d) POR 30 percent
for PT PLN; and (e) no dividend withdrawal
for SOEs suffering cash flow difficulties. In
addition, SOEs are expected to optimize
investments (capital expenditure) notably
from the allowance of retained profits to
improve their performance. The projection of
Government’s portion of SOEs’ profit sharing
in 2012 and 2013 can be seen in Graph 3.31.
Chapter 3
GRAPH 3.31
GOVERNMENT PORTION FROM SOE PROFITS ,
2012—2013
trillion Rp
33,5
33
31
30,8
29
27
25
2012
APBNP
2013
APBN
Source: the Ministry of Finance
Other Non Tax (PNBP) Revenue
Other non-tax revenue in 2013 is planned to
book Rp.78.0 trillion. This target is mainly
from contribution of K/L non tax revenue for
their services rendered to the communities.
Of Ministries/Agencies (K/L) contributing in
other non-tax revenue, seven K/L with the
most significant contribution are: (a) the
Ministry
of
Communication
and
Telecommunication, (b) the Ministry of
Education and Culture; (c) the Ministry of
Health,(d) The National Police of Republic of
Indonesia, (e) the Ministry of Laws and
Human Rights, (f) National Land Agency,
and (g) the Ministry of Transportation.
GRAPH 3.32
NON INCOME TAX OF KEMENKOMINFO,
2012—2013
trillion Rp
12
10,1
9,9
2012
APBNP
2013
APBN
10
8
6
4
2
0
Source: the Ministry of Finance
Non-Tax revenue (PNBP) of the Ministry of Communication and Information is planned to
reach Rp.9.9 trillion. Efforts taken to realize this target include: (a) Intensify collection to
telecommunication operators and radio requrency specturm users in association with BPKP
tasked to audit the taxpayer; (b) law enforcement in telecommunication operation and radio
frequency useage; and (c) autmoatization/modernization of license processing to accelerate
and facility public service delivery. The projection of non-tax revenue from the Ministry of
Communication and Informatics in 2012 and 2013 can be seen in Graph 3.32.
Non-tax (PNBP) revenue of the Ministry of Education and Culture is planned to reach Rp.2.0
trillion. To achieve such target, the Government will: (a) introduce transparent and
accountable budget system and activity based budgeting; (b) optimize assets to augment the
added value of institutions according to the vision, mision and objectives of tertiary education;
(c) not increase tuition fee for state unversities; (d) adopt single tuition tariff state universities
starting from 2012, i.e. the tariff calculated based on unit price of all components relating to
learning process in universities; (e) provide operation aid for the state universities; and (f)
contribution without any connection with the recruitment process of new students in state
universities. The projection of non-tax revenue (PNBP) from the Ministry of Education and
Culture for 2012 and 2013 can be seen in Graph 3.33.
Financial Notes and Indonesian Budget 2013
3-33
Chapter 3
Government Revenues
GRAPH 3.33
PNBP OF KEMENDIKBUD, 2012 - 2013
2
GRAPH 3.34
PNBP OF KEMENKES, 2012 - 2013
trillion Rp
trillion Rp
1,9
2,0
0,3
0,3
0,3
0,2
1
0,2
0,2
0,1
0,1
0,0
0
2012
APBNP
Source: the Ministry of Finance
2013
APBN
2012
APBNP
2013
APBN
Source: the Ministry of Finance
The non-tax revenue (PNBP) of the Ministry of Health is predicted to amount Rp.0.3 trillion.
Without belittling the main tasks of this ministry to render health services to people, the said
target will be achived with the following efforts: (a) to improve non-tax revenue (PNBP)
management; (b) to enhance the quality of health services as required; and (c) to increase
the professionalism of human resources and science and technology. The projection of nontax revenue (PNBP) for the Ministry of Health in 2012 and 2013 can be seen in Graph 3.34.
The non-tax revenue of Polri (Police) is planned to reap Rp.4.8 trillion. This target will be
optimized with the following measures: (a) reinforcing the police precinct (polres) as the
spearheads of police services delivering one-stop service (samsat), driving license
administration unit (satpas) service, BPKB service and accident service and bringing the
service access closer to the communities; (b) developing human resources of the Police with
traffic technical and functional training and education; (c) developing online one-stop service
network in all police station (Polda) for online system national traffic management center
(NTMC); (d) preparing the development of traffic management centre (TMC) in regions,
which is integrated starting from Police Head Quarter to precint level so as to established
sound law and order and smooth traffics; (e) launching open government information (OGI)
for information disclosure to public in respect of SIM, BPKB, STNK and TNKB (SBST), with
participation in public service competition
GRAPH 3.35
organized by working unit of the President in
PNBP OF POLRI, 2012 - 2013
development supervision and control affairs trillion Rp
(UKP4); (f) supplying forms for service
provision in traffic functions and security
4,8
4,6
5,0
intellegent function and paying electricity bills,
4,0
telephone bills of administration service unit
3,0
(satpas) and honorarium for officers tasked
2,0
in Police’s non-tax revenue collection; and (g)
1,0
expanding police certificate provision services
0,0
(SKCK) up to sub-district level as the
2012
2013
spearheads of police services to the public. The
APBNP
APBN
projection of non-tax revenue from Police in Source: the Ministry of Finance
2012 and 2013 can be seen in Graph 3.35.
3-34
Financial Notes and Indonesian Budget 2013
Government Revenues
Chapter 3
Non-tax revenue (PNBP) from the Ministry
GRAPH 3.36
NON INCOME TAX OF
of Laws and Human Rights is projected to
trillion Rp
KEMENKUMHAM, 2012 - 2013
record Rp.2.5 trillion. The target will be
2,5
reached with some measures, including: (a) 2,8
2,4
2,2
introducing electronic limited residency 2,0
permit cards (E-Kitas) and electronic 1,6
permanent residency permit cards (E- 1,2
KITAP); (b) developing immigration 0,8
management information system (SIMKIN) 0,4
0,0
in sustainable manner; (c) socializing
2012 APBNP
2013 APBN
intellectual rights; (d) establishing legal
Source: the Ministry of Finance
service desk (fiducia) to bring the services
closer to the people; (e) facilitating fiducia payment via banks and at the same time promoting
transparent transactions; and (f) developing IT based services. The projection of non-tax
revenue from the the Ministry of Laws and Human Rights can be seen in Graph 3.36.
National Land Agency (BNP) is expected to
GRAPH 3.37
garner non-tax revenue (PNBP) in amount
PNBP OF BPN, 2012 - 2013
of Rp.1.7 trillion. This target will be pursued ttrillion Rp
2,0
1,7
1,7
with: (a) building public trust to BPN through
1,6
tariff socialization for land certificate
1,2
processing via printed media; (b) improving
0,8
land registration and certification services; (c)
ensuring the reinforcement of people’s rights 0,4
on lands; (d) resoluting land related problems 0,0
2012
2013
in disaster and conflict torn regions; and (e)
APBNP
APBN
developing national land information and
management system (SIMTANAS) and land
Source: the Ministry of FInance
document security system throughout
Indonesia. The projection of non-tax revenue expected to reap from BPN in 2012 and 2013
can be seen in Graph 3.37.
The non-tax revenue (PNBP) from the Ministry of Transportation is expected to amount
Rp.0.8 trillion. To pursue such a target, the Government will take some actions such as: (a)
improving the safety and quality of river lake and ferry traffics (LLASDP); (b) conducting
motor vehicle testing according to Euro-2 standard for petroleum fueled cars and motorcycles;
(c) making investment in public service facilities and infrastructure; (d) providing business
certainty in sea transport in order to develop and empower the economy of islands throughout
Indonesia, to serve and promote national economic growth with uninterrupted goods supplies;
(e) developing sound business climate to protect the sustainability and development of
navigation business, including the development of traditional and small scale entreprises; (f)
PNBP intensification with intensive collection to taxpayers; (g) reviewing service tariff as
established in PP 6 of 2009 concerning Types and Tariff of PNBP of the Ministry of
Transportation; and (h) PNBP extensification with optimizing state owned assets (BMN)
and enhancing the quality of facilities and infrastructure. The Projection of PNBP revenue
from the Ministry of Transportation in 2012 and 2013 can be seen in Graph 3.38.
Financial Notes and Indonesian Budget 2013
3-35
Chapter 3
Government Revenues
BLU (Public Service Agency) Revenue
In 2013, the revenue expected from BLU is planned to amount Rp.23.5 trillion. It is
particularly due to more working units (satker) in K/L (Ministries/Agencies) introducing
BLU financial management pattern to enhance their service quality.
BLU Financial Management Pattern is demoninated by working units (Satker) serving
education and health services. The majority of BLU revenue in 2013 come from education
services, which are predicted to reach Rp.11.5 trillion and hospital services projected to amount
Rp.5.8 trillion. In addition, revenue from telecommunication operation is projected to record
Rp.1.7 trillion with revenue from other sector is planned to reap Rp.4.4 trillion. The projection
of revenue from BLU in 2012 and 2013 can be seen in Graph 3.39.
trillion Rp
0,9
0,8
0,7
0,6
0,5
0,4
0,3
0,2
0,1
0,0
GRAPH 3.38
NON INCOME TAX OF KEMENHUB,
2012−2013
0,8
0,7
trillion Rp
GRAPH 3.39
GENERAL SERVICES AGENCY
REVENUE, 2012−2013
23,5
24
23
22
21
20,4
20
19
18
2012 APBNP
Source the Ministry of Finance
2013 APBN
2012 APBNP
2013 APBN
Source: the Ministry of Finance
3.4.2 Grant Proceeds
Grant revenue in 2013 is expected to record
GRAPH 3.40
Rp.4.5 trillion, This target is however
GRANT REVENUE, 2012−2013
considerably subject to commitments of trillion Rp
6,6
donor countries to grant their assisance and
6,0
6,0
commitments of K/L (Ministries/Agencies)
5,4
4,5
4,8
being the beneficiaries in reporting and
4,2
3,6
ratifying the grants they receive. In addition,
3,0
2,4
the Government is highly committed to
1,8
0,8
1,2
improve the management of grant proceeds
0,6
with better accountability and transparancy
2012
2012
2013 APBN
APBNP
Outlook
through
recording
system
and
administration for the received grants in Source: the Ministry of Finance
APBN. The projection of grant proceeds to
be earned in 2012 and 2013 can be seen in Graph 3.40.
3-36
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
CHAPTER 4
CENTRAL GOVERNMENT EXPENDITURE BUDGET
4.1
General
Normatively, the Government plays two groups of normative functions, i.e. non-economic
functions and economic functions. The non-economic functions that must be played by the
Government include defense and security function, justice function and public service
function; as to the latter, i,e. Economic functions as the result of market failure, they consist
of allocation function, distribution function, and stabilization function. With regard to attempts
in augmenting social welfare, the economic functions of the Government are more focused
on the quantity aspects of the welfare (e.g. income rate and growth rate). While non-economic
functions are more directed to quality aspects of the welfare (e.g. security, law and order and
environmental quality). Given that, in achieving the ideal social welfare, these two aspects
should receive great concerns. Consequently, budget allocation in State Budget (APBN) must
give equal treatment to these two aspects of welfare.
In line of that, budget for the Central Government Expenditure, as part of overall Government
spendings, should at least play two roles, which are paramount to pursue the national goals,
especially in enhancing people’s prosperity. First, the sums and composition of Central
Government expenditure in fiscal operation will have great influence over aggregate demands
being the determinant factors of national output, and the allocation and efficiency of economic
resources. The second role relates to fund allocation for the execution of the three economic
functions of the Government, i.e. allocation function, distribution function and stabilization
function. The quality of policy and allocation of Central Government expenditure are in a
very strategic position in supporting the realization of the envisaged national goals, either
expressed in long-term development, mid-term development or short-term development plan.
In fiscal operation, the allocation function role of Central Government expenditure is exercised
through funding to various productive investment programs and activities, such as expenditure
for infrastructure provision or financing to a wide variety of spendings, or goods and services
expenditure (consumption) in order to increase aggregate demands. Role of stabilization
function is carried out with the provision of subsidies, either price subsidy for basic
coommodities or targeted subsidy to certain objects. This is role is crucial to abate the burdens
of people in satisfying their basic needs, and at the same time to maintain the productivity of
producers, especially for products being the basic needs of people at affordable prices.
Role in distribution function is to support the empowerment of low-income community
groups, including those who are marginalized or have limited economic capacity. The supports
are given in the form of transfers comprising direct assistance as found in Prosperous Family
Program (PKH), budget allocation for programs and activities to support poverty alleviation
initiatives such as the National Community Empowerment Program (PNPM) or other
programs aiming to expand access to basic services in education and health sectors like
School Operation Aids (BOS) and Public Health Insurance (Jamkesmas).
In light of foregoing, the policy on budget allocation for Central Government expenditure
may also play role as stabilizator for the economy or as effective countercyclical policy in
calming down business cycles or economic upheavals. When the business is slumping and
economic activities are slowing down due to recession or depression, the magnitudes and
Financial Notes and Indonesian Budget 2013
4-1
Chapter IV
Central Government Expenditure
policy of government spending, including Central Government expenditure must be designed
in more expansive manner to stimulate economic growth and maintain the stability while
reinforcing macroeconomic foundations. This approach has been particularly taken by
Indonesia with fiscal stimulus policy in 2009 and relatively successful. In contrast, under
overheating economy, which is too expansive, policy and allocation of budget for Central
Government expenditure can be used as an effective policy tool to cooling down the economic
activities toward more favorable conditions.
Synergic implementation of the three economic functions of the Government will not only
play strategic roles in bolstering macroeconomic performance, but also support in improving
and strengthening the economic foundations, such as to promote sustainable economic
growth; to control inflation and to maintain economic stability especially price stability; to
generate and expand productive employment so as to reduce unemployment rate; and to
improve income distribution in order to lessen poverty rate.
For 2013, the preparation of budget policy and allocation for the Government expenditures
will refer to the priorities, programs and activities set out in the Government Work Plan
(RKP) 2013, which constitutes a chain of National Medium Term Development Plan
(RPJMN) 2010-2014. Budget policy and allocation of the Government expenditures in 2013
are also directed to achieve the main priorities and strategies of RPJMN 2010-2014 to buttress
the restructuring of Indonesia in all sectors focusing on human resources quality enhancement
including capacity development in science and technology and economic competitiveness.
These main priorities and strategies will be attained with five national development agendas,
being the mid-term development policy directions, i.e.: (1) economic development and people
welfare augmentation; (2) governance restructuring; (3) democratization; (4) law
enforcement and corruption eradication; and (5) inclusive and equitable development.
These five agendas will be carried out in sustainable manner to deal with various challenges
of national development either in mid-term or annual basis. In 2013, the challenges are
mainly relating to global economic conditions which are predicted still uncertain. Debt crisis
of developed countries especially Europe, political tension in Middle East, North Africa and
Korean Peninsula, climate change and potential natural disasters throughout the world, and
the soaring energy price can affect the global financial stability and global economic recovery
and in turn national economy.
In addition, the potential of introducing protection approach and unfair measures to win
domestic and export market by many countries, due to lower global economic growth estimate
in 2013 (3.9 percent) than in 2011 (5.3 percent) is much more likely. This will spur bitter
competition of countries to win trade and investment markets. Under such circumstance,
domestic economy and competitiveness must be reinforced in synergic fashion either at global
or domestic scales.
Social welfare augmentation is another challenge that must be coped with amid economic
development. Hence, the acceleration and expansion of initiatives to reduce open
unemployment and poverty rate which in 2011 recorded respectively 7.7 million persons and
29.9 million persons will be carried out while taking into account prosperity gap reduction of
social components or regions.
In view of challenges and problems to face, and performance achieved and potentials owned
and development targets to pursue, the theme of national development in RKP 2013 as
mutually agreed by the Government and DPR (House of Representatives) during preliminary
discussion of RAPBN 2013 will be: “Reinforcing Domestic Economy for People Welfare
Augmentation and Expansion.”
4-2
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Consistent with such theme and as part of RPJMN 2010-2014 implementation, RKP 2013
sets national development priorities: (1) Bureaucracy Reform and Good Governance; (2)
Education; (3) Health; (4) Poverty Alleviation; (5) Food Resilience; (6) Infrastructure; (7)
Investment Climate and Business Climate; (8) Energy; (9) Environment and Disaster
Managemen; (10) Underdeveloped Regions, the Frontier and Conflict-Torn Regions; (11)
Culture, Creativity and Technology Innovation; and (3) 3 (three) priority sectors, i.e. (1)
Political, Law and Security; (2) The Economy; and (3) People’s Welfare.
To achieve such development objectives, and in view of the latest dynamics, either at domestic
or global scales, the Government needs to take breakthroug and strategic measures to expedite
the realization of development vision. These breakthrough and strategic measures are set
out in: (1) Master Plan for the Acceleration and Expansion of Indonesia’s Economic
Development (MP3EI) 2011-2025; (2) Master Plan for the Acceleration and Expansion of
Poverty Alleviation (MP3KI); (3) Development Acceleration for Papua Province and West
Papua Province; and (4) sustainable development mainstreaming of the National Green
House Gas Emission Reduction Action Plan (RAN-GRK) and (Reducing Emissions
from Deforestation and Forest Degradation (REDD+).
As a breakthough and strategic measure, MP3EI has been prepared as a reflection of national
economic transformation with orientation based on strong, inclusive, quality and sustainable
economic growth. MP3EI is expected to play as driving force for economic growth and
employment generator and at the same time promoting equitable development throughout
the country. MP3EI is carried out with three major strategies, i.e. (1) developing six economic
corridors of Indonesia consisting of: Sumatra, Java, Kalimantan, Sulawesi, Bali-Nusa
Tenggara economic corridors and Papua-Maluku economic corridor; (2) strengthening
national connectivity, which is domestically and internationally integrated; and (3)
accelerating human resources capacity and science and technology prowess to support the
development of main programs by way of fortifying the added value of individual economic
corridors. MP3EI is a product of cooperation and partnership of the Government, Regional
Governments and SOEs, Regional SOEs, private sectors, and academicians. Meanwhile, the
funding of MP3EI comes from funding integration of APBN, APBD, SOEs, Regional SOEs
and private sectors and communities.
MP3KI is an affirmative policy to expedite and expand poverty alleviation initiatives in
Indonesia by specifically elaborating the concept and design, policy direction and strategies
of the long-term poverty alleviation program (2012-2025) while illustrating the
transformation of the existing poverty alleviation programs toward a comprehensive social
security system. MP3KI also points out the concept and design of sustainable livelihood
development to achieve sustainable living standard and prosperity augmentation. Under
MP3KI poverty alleviation programs in Cluster I – IV will be carried out in synergic manner
with well-cut targets.
In addition, the strategic measures that have been and will be taken are to speed up the
development of Papua province and West Papua province. This strategy is obvious in view of
the backwardness of local citizens in these two provinces, which is much left behind other
regions. The most important issue that must be coped with in the development of Papua
province and West Papua province concerns the exceeding poverty rate and low quality
education and health services. Such unfavorable conditions lead to low quality human resouces
in these easternmost provinces. The situation is aggravated with isolation. Even land transport
can’t access these provinces. Measures to take in 2013 include: (1) poverty reduction with
food resilience and local economic empowerment; (2) the provision of quality and certified
teachers and assurance on the fullfillment of basic needs of teachers assigned in these two
provinces; (3) development and improvement of some road links extending from southern
Financial Notes and Indonesian Budget 2013
4-3
Chapter IV
Central Government Expenditure
coast to middle mountain range; and (4) the implementation of pro-indigenous people
programs (affirmative actions), i.e. the recruitment of local people in the best tertiary education
institutions outside Papua, and in strategic government institutions such as Police and Military
establishments, and in apprenticeship programs of various government institutions outside
Papua.
As for sustainable development mainstreaming strategic measures, i.e. RAN-GRK and
REED+ they will be implemented as follow up actions of national commitment in green
house gas emission reduction (GRK) in five main sectors, to wit: (1) forestry and peat soils;
(2) agriculture; (3) energy and transportation; (4) industries; and (5) waste. As the largest
part of this GRK movement,i.e. the forestry and peat soil sectors, a National Strategy for
Emission Reduction from Deforestation and Forest Degradation (Stranas REDD+) has been
worked out. Actions to take include new license moratorium for two years 2012-2013 coupled
with forestry and peat soil governance improvement. Still in this respect, biodiversity
management as part of the most important part of ecosystem and assets for green economic
development in future, will be strengthened. Indonesian Biodiversity Strategy and Action
Plan (IBSAP) 2003 – 2020 will be updated to follow the latest dynamics in domestic and
abroad.
With reference to the development targets to achieve as established in RKP 2013 and fiscal
policies and economic projections in 2013, the budget for Central Government expenditure
in APBN 2013 has been allocated in amount of Rp.1,154.4 trillion (12.5 percent of GDP).
This budget allocation aims to support Government policy, including: (1) basic salary increase
for public servants (PNS) and Armed Forces/Police (TNI/Polri) by seven percent on the
average (including for the judges), and the payment of the 13th salary and pension; (2)
infrastructure budget increase to support domestic connectivity, energy resilience and food
resilience and tourism destinations; (3) intensifying social protection programs to reduce
poverty rate by reinforcing pro-people programs (cluster 4 poverty alleviation) and synergy
between the clusters to support the Master Plan for the Acceleration and Expansion of Poverty
Reduction (MP3KI); (4) providing efficient subsidy allocation with well-targeted beneficiaries,
and improving electricity subsidy efficiency with electricity rate (TTL) rise at 15 percent on
the average; (5) strengthening social safety net in education and health; and (6) anticipating
the preparation of 2014 general election.
4.2 The Trends of Policy and Implementation of Budget
Allocation for Central Government Expenditures,
2007 – 2012
For the last six years (2007 – 2012) the Government has taken numerous policies in Central
Government expenditures including their budget allocation in APBN. Such policies and budget
allocation of Central Government Expenditures in APBN are directed to buttress governance
operation and public service delivery to the communities, to suppport national economic
stability and activities to boost economic growth, generate and expand employment and
reduce poverty (either in absolute term or in percentage).
Some measures taken by the Government in Central Government Expenditures during 20072012 can be classified into policy measures and administrative measures. The former is a
substantive approach aiming to optimize people welfare, with among other things refining
budget allocation in various priority activities to give greater and more sustainable multiplier
effects consisting of economic growth, employment expansion and poverty reduction. Such
policy covers: (1) increasing infrastructure spending to support debottlenecking, domestic
connectivity, food resilience, self-contained energy, and people welfare; (2) improving social
protection program, community empowerment, and disaster management; (3) reinforcing
4-4
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
pro-people programs; (4) capacity building in mitigation and adaptation to climate change;
and (5) providing supports for Public Private Partnership (PPP).
The administrative measures taken to optimize budget from spending wise, are particularly
with the improved budget allocation system and implementation. Administrative measure
that has been taken by the Government is that of reform policy in fiscal sector with regard to
the preparation and implementation of Central Government Expenditure budgeting. Law
Number 17 of 2003 concerning State Finance mandated the introducion of government
expenditure budgeting reform covering: (1) unified budget; (2) performance based budgeting;
and (3) medium term expenditure framework. To exercise such government expenditure
budgeting system reform, the Government has established several strategies ranging from
introduction strategy from 2005 – 2009; enforcement strategy from 2010 – 2014; and
revision strategy in 2015.
Unified budgeting approach has been applied since 2005. It is reflected from the preparation
of expenditure budget allocation made in integrated manner between programs and activities
and types of expenditures within the ministries/agencies (K/L) including the working units.
Under this integrated budgeting system, the allocation of Central Government expenditure
budget is detailed by organizations, functions and types.
The introduction of performance based budgeting requires the preparation of expenditure
budget allocation for individual working units while taking the relationship of input and the
expected output and/or outcome into consideration including efficiency in attaining the said
output and outcomes. The adoption of medium term expenditure framework demands on
the preparation of expenditure budget allocation for each working unit based on budget
requirements within more than one year perspective. Thus, the attention of the Government
will be more focused on priority policies to be financed with sound fiscal discipline, on the
expectation that in turn public resources be utilized in much more effective and efficient.
Another administrative measure is the introduction of policy on budget implementation, i.e.
reward and punishment policy. This reward and punishment system is an effort of the
Government to enhance the quality of Central Government expenditure planning and
implementation. The system has been applied since 2009. Basically, in reward and punishment
system the ministries/agencies (KL) succeeding in optimizing budget utilization, or achieving
the targets with lower budget than previous year shall receive additional budget ceilings for
their expenditure in the following year (reward). As for ministries/agencies (K/L) that in the
last year failed to absorb their budgets or achieve the targets on unacceptable grounds their
budget for the coming year will be reduced (punishment).
Moreover, the Government will enhance the quality of spending, especially to increase the
effectiveness of Central Government expenditure. It is important since the majority of Central
Government expenditure are nondiscretionary expenditures such as personnel, operational
materials, loan interest payment, and subsidies. Such immense nondiscretionary expenditures
have limited the space of the Government to make fiscal intervension in the form of sitmulus
to people’s economic activities, either to raise economic growth, create productive employment
or reduce poverty. Ratio of mandatory expenditures to total Central Government expenditures
in 2007 – 2012 reaches 68.8 percent on the average with the remaining 31.2 percent consisting
of discretionary expenditures.
With regard to budget allocation of Central Government expenditures, during 2007 – 2012
its proportion to total Government Expenditures shows upward trend, i.e. from 66.6 percent
(Rp.504.6 trillion) in 2007 to 68.2 percent (Rp.883.7 trillion in 2011, and 69.1 percent
(Rp.1,069.5 trillion in APBNP 2012. This trend of Central Government expenditure volumes
in the said period is subject to external and internal factors. External factors with significant
Financial Notes and Indonesian Budget 2013
4-5
Chapter IV
Central Government Expenditure
effects are Indonesian Crude Price (ICP), rupiah exchange rate to US dollar, and global
economic conditions. For internal factors that have influence over APBN, they include budget
allocation for operational spendings to run the governance and the implementation of policy
measures in Central Government Expenditure as established in APBN.
The trend of Central Government Expenditure in 2007 – 2012 by functions, organizations,
and types of spendings can be described as follows:
4.2.1 The Trend of Central Government Expenditure Budget Allocation by Functions
Law Number 17 of 2003 concerning State Finance, notably Article 11 paragraph (5) spells
out that the Central Government Expenditures shall be also classified by functions. There
are 11 (eleven) functions illustrating various aspects of governance in public service delivery
and people’s welfare augmentation. These elevent functions are: (1) public service function;
(2) defense function; (3) law and order function; (4) economic function; (5) environmental
function; (6) housing and public facility function; (7) health function, (8) tourism and cultural
function; (9) religion function,
GRAPH 4.1
CENTRAL GOVERNMENT EXPENDITURE TREND BY FUNCTION , 2007 - 2012
(10) education function; and
(11) social protection function. In
1.069,5
2007 – 2012 the overwhelmingly
majority of budget for Central
883,7
Government Expenditures are
697,4
allocated for public service function,
628,8
i.e. 65.0 percent on the average of
693,4
total realized Central Government
504,6
Expenditure. About 35.0 percent of
the
realization
of
Central
Government Expenditures during
the same period have been spent to
perform other functions. Illustration on the trend of budget implementation for Central
Government Expenditures by functions is presented in Graph 4.1 and Table 4.1 and as
pointed out in detail below.
1 PUBLIC SERVICES
2 DEFENSE
2012
APBN-P
3 LAW AND ORDER
4 ECONOMY
2011
5 ENVIRONMENT
2010
6 HOUSING AND PUBLIC FACILITIES
7 HEALTH
2009
8 TOURISM AND CULTURE
9 RELIGIONS
2008
10 EDUCATION
11 SOCIAL PROTECTION
2007
-
200,0
400,0
600,0
800,0
Trillion Rupiah
1.000,0
1.200,0
% to
GDP
LKPP
TABLE 4.1
CENTRAL GOVERNMENT EXPENDITURE BY FUNCTION, 2007 - 2012
(trillion rupiah)
2007
NO.
FUNCTIONS
LKPP
2008
% to
GDP
2009
% to
GDP
LKPP
LKPP
2010
% to
GDP
LKPP
2011
2012
% to
GDP
APBNP
% to
GDP
01
PUBLIC SERVICES
316,1
8,0
534,6
10,8
417,8
7,5
471,6
7,3
508,9
7,2
659,1
7,7
02
DEFENSE
30,7
0,8
9,2
0,2
13,1
0,2
17,1
0,3
51,1
0,7
73,9
0,9
03
LAW AND ORDER
28,3
0,7
7,0
0,1
7,8
0,1
13,8
0,2
21,7
0,3
33,4
0,4
04
ECONOMY
42,2
1,1
50,5
1,0
58,8
1,1
52,2
0,8
87,2
1,2
120,1
1,4
05
ENVIRONMENT
5,0
0,1
5,3
0,1
10,7
0,2
6,5
0,1
8,6
0,1
10,7
0,1
06
HOUSING AND PUBLIC FACILITIES
0,3
07
HEALTH
08
TOURISM AND CULTURE
09
RELIGIONS
10
EDUCATION
11
SOCIAL PROTECTION
XX
NO FUNCTION
TOTAL
9,1
0,2
12,4
0,3
14,6
0,3
20,1
0,3
22,9
0,3
29,5
16,0
0,4
14,0
0,3
15,7
0,3
18,8
0,3
14,1
0,2
15,4
0,2
1,9
0,0
1,3
0,0
1,4
0,0
1,4
0,0
3,6
0,0
3,2
0,0
0,0
1,9
0,0
0,7
0,0
0,8
0,0
0,9
0,0
1,4
0,0
3,6
50,8
1,3
55,3
1,1
84,9
1,5
90,8
1,4
97,9
1,4
115,0
1,3
2,7
0,1
3,0
0,1
3,1
0,1
3,3
0,1
3,9
0,1
5,6
0,1
(0,1)
(0,0)
(0,0)
(0,0)
504,6
12,8
-
-
693,4
14,0
628,8
11,2
0,9
0,0
62,3
0,9
0,0
0,0
697,4
10,9
883,7
12,4
1.069,5
12,5
Source: the Ministry of Finance
4-6
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Public Service Function
The realization of budget for Central Government Expenditures in public service function is
allocated through the ministries/agencies (K/L) and non-ministries/agencies (non K/L),
especially used to deliver services to the people. In period 2007 – 2012, expenditure budget in
public service function, in terms of nominal, demonstrates steady increase of 15.8 percent
per annum on the average, i.e. from Rp.316.1 trillion in 2007 to Rp.659.1 trillion in 2012.
The rise of budget for public service function in such period reflects the Government’s
commitments to improve public services to the people both in terms of quality and quantity.
This public service function is further divided into several sub-functions, which in period
2007-2012 the proportions are as follows: (1) executive and judicial, financial and fiscal, and
international affairs sub-function (17.3 percent of total public service function); (2) public
service sub-function (1.0 percent); (3) basic research and science and technology development
sub-function (0.4 percent); (4) government loan sub-function (21.1 percent);(5) regional
development sub-function (0.3 percent); (6) public service of research and development
sub-function (0.01 percent); and (7) other public services sub-function (59.9 percent). In
2007-2012, other public service sub-function dominates the budget allocated for public service
function. It is due to Government’s policy to maintain the price stability of certain
commodities through various subsidies.
Trillion Rp
Some significant sub-functions of public service function during 2007-2012 can be illustrated
as follows: (1) other public service sub-function records increase of 10.0 percent per annum
on the average, i.e. from Rp.218.6 trillion in 2007 to Rp.251.4 trillion in 2012, especially to
finance subsidy spending and other transfers; (2) government loan sub-function during the
same period experiences average rise of 17.3 percent per annum, i.e. from Rp.79.2 trillion in
2007 to Rp. 176.1 trillion in 2012, especially to pay loan interest; and (3) executive and
judicial, financial and fiscal institutions and international affairs sub-function in 2007 –
2011 is to rise by 49.9 percent per annum on the average, i.e. Rp.15.0 trillion in 2007 to
Rp.113.5 trillion in 2012. Budget
allocated for this sub-function
GRAPH 4.2
PUBLIC SERVICE FUNCTION EXPENDITURE ,
during such period is mainly used
2007-2012
to finance several programs
700,0
including: (1) support program
Public Services
600,0
for the management and
Other Public Services
500,0
implementation of other technical
Basic Research and Science and
tasks of the Police; (2) tax revenue
400,0
Technology Dev.
Regional Development
improvement and safeguarding;
300,0
(3) supervision, service and
Government Loans
200,0
revenue program in customs and
100,0
Exectuive, Legislative, Financial, and
Fiscal and Foreign Affairs
excise sector; and (4) state
treasury management program.
2007
2008
2009
2010
2011
2012
APBN-P
The trend of budget realization fof Source: the Ministry of Finance
public service function in 2007 –
2012 is presented in Graph 4.2.
The realization of various programs and activities in public service function in 2007 – 2012
include: (1) fuel subsidy distribution with target volume 40.0 million kilo liter of subsidized
fuel every year; (2) electrical supply at affordable rate to the people; (3) food subsidy and the
provision of subsidized rice for 17.5 million poor people (RTS), i.e. 15 kg per TRS; (4) the
distribution of subsidized fertilizers and high quality seeds at affordable price for farmers; (5)
public transport subsidy for passengers of economic class of railways and sea transport
(6) debt service compliance to the Government loans, i.e. the payment of loan interests; and
(7) human resources development for Public Servants (PNS) to improve service delivery
to people.
Financial Notes and Indonesian Budget 2013
4-7
Chapter IV
Central Government Expenditure
Defense Function
Budget for defense function is used to finance the improvement of national defense capacity
and power, which is consistent with one of main target of national agendas, i.e. to achieve
safe and peaceful Indonesia and to reinforce the Unitary State of Republic of Indonesia
based on Pancasila and UUD 1945 and Bhineka Tunggal Ika. This function is obvious from
the success of thwarting separatist movement and the improved preventive and deterrent
power of the state against terrorism to maintin the sovereignty of the Unitary State of Republic
of Indonesia (NKRI) both against domestic or foreign threats. The realization of budget for
defense function in Central Government Expenditure is allocated to the Ministry of Defense
consisting of Armed Forces Head Quarter (Mabes TNI), Indonesian Army (TNI AD),
Indonesian Navy (TNI AL), and Indonesian Air Force (TNI AU). During 2007 – 2012 the
allocation of budget for Central Government Expenditures in Defense Function has been
further allocated for: (1) national defense sub-function (42.6 percent of total Defense Function
budget); defense support function (51.4 percent); and (3) defense research and development
sub-function (12.2 percent).
Owing to defense function reclassification, in 2008 there was program restructuring and
reallocation, i.e. good governance program reallocated to personnel spending, which was
previously as part of defense function now shifted to public service function. The realization
of budget for defense function in 2007-2012 records steady rise of 19.2 percent per annum
on the average, i.e. from Rp.30.7 trillion in 2007 to Rp.74.0 trillion in 2012. Meanwhile,
budget realization of national defense sub-function in 2007 – 2012 is to increase by 42.6
percent per annum on the average, i.e. from Rp.9.0 trillion in 2007 to Rp.53.1 trillion in
2012. The budget is mainly to finance defense development program of the army, navy and
air military forces and integrated military force defense development program. Meanwhile
the realization of budget in defense support sub-function in 2007 – 2012 is to rise by 51.4
percent per annum on the average, i.e. from Rp.2.6 trillion in 2007 to Rp.29.7 trillion in
2012. Such budget realization is to finance defense industry development program and defense
system and strategy development program. As to budget realization of defense research and
development sub-function in 2007-2012, it increases by 12.2 percent per annum from Rp.93.4
billion in 2007 to Rp.165.8 billion in 2012. This realization is to finance national defense
program and defense research and development program.
Trillion Rp
The outcomes of programs and activities financed under defense function budget in 20072012 include: (1) the prosperity of Indonesian Armed Forces (TNI) augmented, especially in
terms of housing, basic education for their families and post-service prosperity insurance;
(2) number and conditions of defense equipment improved toward modern and ready to
operate weaponry system; (3) people potentials in national defense as part of component in
national defense maximized; (4) the
success of the Government in
GRAPH 4.3
DEFENSE FUNCTION EXPENDITURE ,
revealing, preventing and detaining
2007-2012
terrorism perpetrators and networks;
National Defense
Defense Support
Defense Research and Development
roles of domestic defense industries
80,0
70,0
improved and empowered; (6) policy
60,0
on science and technology based
50,0
defense industry development
40,0
30,0
formulated;(7)219 border posts
20,0
erected; (8) integrated defense force
10,0
realized capable of dealing with any
2007
2008
2009
2010
2011
2012
threat in integrated and timely
APBN-P
manner; (9) security disturbance Source: the Ministry of Finance
4-8
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
and legal violation in sea decreased; and (1) number and conditions of defense equipment
toward modern and ready to operate weaponry system realized. The trend of budget realization
for
defense
function
in
2007-2012
is
presented
in
Graph 4.3.
Law and Order Function
Budget of law and order function is to finance law and order enforcement under the
responsibility of the Government. This function is further divided into several sub-functions,
namely: (1) police sub-function (49.5 percent of total budget of law and order function); (2)
natural disaster management sub-function (3.3 percent); (3) legal development sub-function
(18.9 percent); (4) justice sub-function (8.8 percent); (5) law and order research and
development sub-function (0.04 percent); and (6) other law and order sub-function (19.5
percent). Similar to defense function, law and order function was also restructured in 2008,
i.e. good governance introduction program was switched from law and order function to
public service function. Budget realization of law and order function from 2007-2012 was to
raise 3.4 percent per annum on the average, i.e. from Rp.28.3 trillion in 2007 to Rp.33.5
trillion in 2012.
The most significant budget realization of the above sub-functions during 2007 – 2012 can
be described as follows: budget realization for police sub-function increased 18.0 percent per
annum on the average from Rp.8.9 trillion in 2007 to Rp.29.5 trillion in 2012. Such realization
is to finance police human resources development, law and order strategy development
program, and narcotics abuse and illegal drug distribution prevention and eradication
program.
As to natural disaster management sub-function, its budget realization from 2007 – 2012 is
to rise 71.8 percent on the average, i.e. from Rp.90.6 billion in 2007 to Rp.1.4 billion in 2012.
Budget for natural disaster management sub-function is for search and rescue while
attempting to mitigating disaster risks. The trend of budget realiation for law and order
function in 2007 – 2012 is
presented in Graph 4.4.
GRAPH 4.4
LAW AND ORDER FUNCTION EXPENDITURE ,
Trillion Rp
The outcomes of programs and
2007-2012
activities performed under law and
35,0
order function during 2007 – 2012
30,0
Othe r Law and Ord e r
include: (1) law violations and
25,0
Justice
crime
index
decreased;
20,0
(2) terrorism acts within the
Le gal De ve lopment
15,0
territories of Indonesia reduced; (3)
Disaste r Manage me nt
10,0
safe, orderly and favorable
5,0
Police
conditions in the society
established; (4) law awareness and
2007
2008
2009
2010
2011
2012
APBN-P
and public participation in dealing
with social problems and security Source: the Ministry of Finance
disturbance increased; (5) security
disturbance along water corridors using sea transport modes, coastal areas and national/
international ports reduced by 11 percent; (6) narcotic abuse and illegal drug distribution
decreased; (7) good governance and professional services within police establishments; (8)
public services as quick wins in intellegent affairs provided; and (9) crime rate decreased and
settled (conventional crimes, transnational crimes, crimes with contingency implications
and crimes agains state assets) without impairing human rights.
Financial Notes and Indonesian Budget 2013
4-9
Chapter IV
Central Government Expenditure
Economic Function
In 2007-2012 the realization of budget for economic function is to record an average increase
of 23.3 percent per annum, i.e. from Rp.42.2 trillion in 2007 to Rp.120.1 trillion in 2012.
This increased budget realization in economic function is particularly attributed to the attempts
of the Government in accelerating quality economic growth. Realization and proportion of
Central Government Expenditure budget in economic function during 2007 – 2012 consist
of: (1) trade and business, cooperative and SME development sub-function (3.0 percent of
total economic function budget); agriculture, forestry, fishery and marine sub-function (17.5
percent); (3) irrigation sub-function (7.9 percent); (4) fuel and energy sub-function (7.7
percent); (5) mining sub-function (2.0 percent); (6) transportation (51.2 percent); (7) industry
and construction (2.5 percent); (8) manpower sub-function (2.0 percent); (9)
telecommunication sub-function (0.9 percent); (10) economic research and development
sub-function (1.4 percent); and (11) other economic sub-function (4.0 percent. Great
attention of the Government dedicated to infrastructure development, either for transportation
infrastructure, or agriculture infrastructure is evident from huge budget allocated for
transportation sub-function and agriculture, forestry, fishery and marine sub-function. It is
consistent with the Government’s objectives of addressing infrastructure bottleneck and
reinforcing food resilience.
Some significant budget realization in some sub-functions of economic function in 2007 –
2012 is as described below. In 2007-2012 the realization of budget for transport sub-function
is to rise 33.1 percent per annum on the average, i.e. from Rp.16.6 trillion in 2007 to Rp.59.5
trillion in 2012. Budget for transportation sub-function is for: (1) road operation program
and (2) sea, land, air and railways transport management and operation program.
Some outcomes of programs and activities from transportation sub-function in 2007 to 2012
are: (1) national road preservation of 36,319 km long and bridges 217,076 m long
accomplished; (2) road capacity expansion/wideing of 3,586 km long and bridges of 8,382 m
along the main corridors achieved; (3) Bus Rapid Transit (BRT) development program in 13
cities realized; (4) type A terminals (inter-province) and trans-national border terminal
developed in five locations; (5) railway track of 292.4 km’sp improved and rehabilitated
including the development of new construction of double railways track of 140,9 km’sp; (6)
18 new ports developed and the development of the other 133 ports continued; (7) the
development of strategic airports, i.e. Juanda airport, Kuala Namu airport and Samarinda
Baru airport; and (8) the development of urban and rural transport system in remote areas
and frontier regions.
Meanwhile, during the same period, budget realization for agriculture, forestry, fishery and
marine sub-fuction records an average rise of 21.2 percent per annum, i.e. from Rp.7.6 trillion
in 2007 to Rp19.8 trilion in 2012. The said budget is used for: (1) food resilience development
program; (2) agriculture infrastructure and facility development program; (3) production,
productivity improvement program including the quality of food crops to achieve self-fulfilled
foods in sustainable manner; (4) self-fulfilled beef program and the provision of safe, hygienic,
and halal animal foods; and (5) human resources development program in agriculture and
fishery sectors and farmers and fishermen/fish farmers empowerment.
The outcomes of various programs and activities under agriculture, forestry, fishery and
marine sub-function in 2007-2012 include: (1) the supplies of basic needs from domestic
production maintained and increased; (2) stability of prices for food commodities maintained;
(3) public food consumption increased in terms of quantity and quality toward local food
identification (PPH); (4) the added value and competitiveness of agriculture, fisher and
forestry products increased; (5) GDP growth 3.0 percent from agriculture sector and farmer
4-10
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
exchange rate index (NTP) above 104.71 and fishermen exchange rate (NTN) 105.307
achieved; (6) fish consumption socialization (Gemarikan) promoted; and (7) fish production
with superior quality and competitive in domestic and international markets increased.
Budget realization of fuel and energy sub-function in 2007-2012 records average increase of
33.3 percent per annum, from Rp.2.9 trillion in 2007 to Rp.12.2 trillion in 2012. The said
budget is for: (1) electricity management program; (2) accessibility improvement program
for regional governments, cooperatives and communities to energy services and
infrastructure; (3) renewable energy and energy conservation management program; (4)
natural resources and coal mining development and management program; and (5) oil and
gas management and supply program.
Trillion Rp
The outcomes of programs and activities under fuel and energy sub-function in 2007-2012
include: (1) the production of renewable energy resources increased such as from hydro
power, geothermal, solar cells,
biomass, biofuel and vegetable oil;
GRAPH 4.5
ECONOMIC FUNCTION EXPENDITURE ,
(2) oil and gas supllied and
2007-2012
distributed throughout the country
Industry and Construction
120,0
and national fuel reserve allocated;
Transportation
100,0
(3) the development of urban gas
Mining
distribution for 16,000 house
80,0
Fuel and Energy
connections in five cities; (4)
60,0
electrification ratio increased to
Irrigation
around 75.9 percent; and (5) village
40,0
Agriculture, Forestry, Fishery, Marine
electricity ratio increased to 96.7
20,0
Manpower
percent. The trend of budget
Trade, Cooperative and SME
realization for economic function in
Development
2007
2008
2009
2010
2011
2012
2007 – 2012 is presented in
APBN-P
Source: the Ministry of Finance
Graph 4.5.
Environmental Function
Budget realized for Central Government Expenditure in environmental function allocated
through ministries/agencies (K/L), is primarily used to enhance the quality and preservation
of living environment. Budget allocation of this environmental function is distributed to
several sub-functions as follows: (1) waste management sub-function 15.2 percent; (2)
pollution management sub-function 2.2 percent; (3) natural resources conservation subfunction 48.0 percent; (4) spatial and land sub-function 22.7 percent; and (5) other
environmental sub-function 11.9 percent. Portions of budget allocation to natural resources
conservation sub-function show greate concern of the Government in maintaining and
enhancing the quality of living environment. In 2007-2012, budget realization for
environmental function is to rise by 16.7 percent per annum on the average, from Rp.5.0
trillion in 2007 to Rp.10.7 trillion in 2012. This increasingly budget realization for
environmental function during such period reflects serious attempts of the Government in
maintaining and enhancing the quality of environment.
Budget realization of some significant sub-functions in environmental function during 20072012 can be illustrated as follows: (1) waste management to rise by 51.6 percent per annum
on the average, from Rp.348.0 billion in 2007 to Rp. 2.8 trillion in 2012, especially to finance
settlement infrastructure development and expansion program and sanitation and solid waste
management, development, supervision and implementation program; (2) natural resources
conservation sub-function to increase 4.9 percent on the average from Rp.3.2 trillion in
2007 to Rp.4.0 trillion in 2012 for primarily community empowerment-based watershed
Financial Notes and Indonesian Budget 2013
4-11
Chapter IV
Central Government Expenditure
Trillion Rp
function and supporting capacity
GRAPH 4.6
ENVIRONMENT FUNCTION EXPENDITURE,
improvement program, forest and
2007-2012
land rehabilitation planning and
12,0
management program, wastershed
Other Environment
institutional development and
10,0
Spatial and Land Affairs
evaluation program, and biodiversity
8,0
conservation and forest protection
Natural Resouces
6,0
Conservation
program; (3) spatial and land sub4,0
Pollution Management
fuction to record average increase of
2,0
Waste Manageme nt
27.4 percent from Rp.1.0 trillion
2007 to Rp.3.2 trillion in 2012
2007
2008
2009
2010
2011
2012
mainly to finance national land
APBN-P
Source:
the
Ministry
of
Finance
management program; spatial
planning program and national
survey and mapping progra. The trend of budget realization for environmental function in
2007 – 2012 is presented in Graph 4.6.
The outcomes of programs and activities executed in environmental function during 20072012 are:(1) forest and land rehabilitation implemented for 705,562 ha; (2) the development
of Community Forests and Village Forests reaching 508,170 ha; (3) monitoring and
supervision to 1,005 companies through corporate performance improvement program
(PROPER); (4) monitoring and supervision to 100 industries under clean water program
mechanism (PROKASIH); (5) water conservation areas established for 15.4 million ha, which
of them 2.5 million ha consist of effectively managed water areas; (6) coral reef management
and rehabilitation in 16 district/cities of 8 provinces; (7) number of hotspots reduced to 28,474
points or to decrease by 51.65 percent from average hotspot 2005-2009 (58,890 points) for
forest fire control in Kalimantan, Sumatera and Sulawesi; and (8) four island spatial planning
and four national strategic zones established to support infrastructure development in 2011
and early 2012.
Housing and Public Facility Function
Budget realization of Central Government Expenditure for housing and public facility function
is used to develop houses and public facilities being the responsibility of the Government to
people. Housing and public facility function consists of several sub-functions with budget
proportion for each sub-function as follows: (1) housing development sub-function 10.9
percent; (2) settlement community empowerment sub-function 16.8 percent; (3) water supply
sub-function 15.1 percent; (4) other housing and public facility sub-function 57,1 percent.
In 2007-2012 the realization of budget for housing and public facility function is to increase
by 26.4 percent per annum on the average, from Rp.9.1 trillion in 2007 to Rp.29.5 trillion in
2012. It indicates serious attention of the Government to satisfy the needs of people, especially
in in the provision of liveable housing environment.
Illustration of budget realization in 2007-2012 of housing and public facility function is as
follows: (1) housing development sub-function to raise 31.2 percent per annum on the average,
from Rp.1.1 trillion in 2007 to Rp.4.4 trillion in 2012, particularly to finance housing and
settlement area development program and rental apartment (rusunawa) development
program; (2) settlement community empowerment sub-function to increase 10.9 percent
on the average from Rp.2.4 trillion in 2007 to Rp.4.1 trillion in 2012, which is primarily
used for settlement infrastructure development and expansion program and housing and
settlement area development program; (3) water supply sub-function to rise 21.2 percent on
the average from Rp.1.4 trillion in 2007 to Rp.3.7 trillion 2012 used to finance water supply
system management, development, supervision program; and (4) other housing and public
4-12
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
facility sub-function, which is to record average increase of 33.0 percent from Rp.4.1 trillion
in 2007 to Rp.17.2 trillion in 2012, which is mostly used to finance community empowerment
and village governance program and self-reliance improvement program for villagers.
The outcomes of programs and activities in housing and public facility function in 2007 –
2012 include: (1) the development of 585 twin blocks of simple multi-storey block (rusunawa);
for NTT management, facilitation
for self-help house development of
2,020 units and self-help house
quality improvement of 13,160
units. The trend of budget
realization of housing and public
facility function in 2007 – 2012 is
presented in Graph 4.7.
Trillion Rp
(2) self-help house development facilitated for 14,353 units; (3) quality of self-help houses
enhanced for 55.738 units; (4) housing loans facilitated for 201,202 units; (5) outcomes in
2012, 223 twin Block of Rusunawa,
GRAPH 4.7
facilitation of self-help house
HOUSING AND PUBLIC FACILITY FUNCTION EXPENDITURE ,
development for 20,000 units,
2007-2012
facilitation for self-help house
30,0
quality improvement for 48,750
Other Housing and Public
25,0
units, and slum-areas rehabilitation
Facilities
for 150 ha and 170 areas, and (6)
Water Supply
20,0
15,0
Settle ment Community
Empowe rment
10,0
Housing De ve lopment
5,0
2007
2008
Source: the Ministry of Finance
2009
2010
2011
2012
APBN-P
Health Function
Budget for health function allocated through Central Government Expenditures aims to
highten public health rate. In 2007 – 2012, budget of health function is to drop by 0.8
percent per annum on the average, from Rp.16.0 trillion in 2007 to Rp.15.4 trillion in 2016.
Health function is further divided into serveral sub-function, i.e.: (1) medicine and health
logistic sub-function (9.7 percent); (2)
individual health service sub-function (59.1 percent); (3) community health service subfunction (14.3 percent); (4) demography and family planning sub-function (7.2 percent);
(6) health research and development sub-function (1.5 percent); and (6) other health subfunction (8.0 percent). The proportion of budget allocation for individual health service subfunction is due to the launcing various health service program as attempts of enhancing the
quality of life of people.
Budget realization of some sub-function in health function during 2007-2012 can be illustrated
as follows. In 2007-2012, budget allocated for medicine and health logistic sub-function to
raise 25.2 percent per annum on the average, i.e. from Rp.0.9 trillion in 2007 to Rpp.2.7
trillion in 2012. The budget is mostly used for pharmautical and health tool development
program and medicine and food supervision program. Meanwhile, budget for individual
health service sub-function on the same period is to increase 1.6 percent per annum on the
average, from Rp.8.1 trillion in 2007 to Rp.8.7 trillion in 2012. Budget of individual health
service sub-function is mainly allocated to carry out health development program. Budget
for demography and family planning during 2007 – 2012 is to record average increase of
37.5 percent per annum from Rp.0.4 trillion in 2007 to Rp.2.1 trillion in 2012. Budget of this
sub-function is mostly to finance demographic and family planning program. The trend of
budget realization for health function during 2007 – 2012 is presented in
Graph 4.8.
Financial Notes and Indonesian Budget 2013
4-13
Chapter IV
Central Government Expenditure
Trillion Rp
The outcomes of program and
GRAPH 4.8
HEALTH FUNCTION EXPENDITURE ,
activities of health function in
2007-2012
2007 – 2012 are: (1) service to
Other Health
20,0
pregnant mothers improved in
18,0
terms of the visit of pregnant
Health Research and Development
16,0
women K1 to 92.38 percent, K4
14,0
Demography and Family Planning
coverage to 88.27 percent; (2)
12,0
10,0
health status of child health
Community Health Services
8,0
improved with coverage of full
Individual Health Services
6,0
immunization (DPT, Polio, DPT4,0
Medicine and Health Logistics
HB, DPT-HIB and measles) to 02,0
11 month babies increased to 84.7
2007
2008
2009
2010
2011
2012
percent
and
measles
APBN-P
Source: the Ministry of Finance
immunization 87.3 percent
(2011); (3)first neonatal visit
increased to 71.4 percent in 2010, baby health service coverage to rise to 85.16 percent, and
under five infant health service to reach 80.95 percent in 2011; (4) contegious disease control
notably HIV and AIDS, tuberculosis, and malaria improved; (5) integrated preventive health
services enahanced supported with Health Operation Assistance; (6) health operators increased
in terms of quantity and quality in 9,321 puskesmas, health promotion intensified, community
based health initiatives (UKMB) promoted through posyandu and poskesdes; (6) health
operators tasked in normal areas, remote areas and isolated areas increased in terms of
quality and quantity reaching 32,978 person consisting of specialist doctors, dentists, general
doctors, and midwives; (7) health insurance coverage expanded, number of Jamkesnas
participants and hospitals serving Jamkesnas patients increased evident from more III-class
wards, Jamkesnas patient services in puskesmas enhanced, and services for maternal mothers
and delivery through Jampersal improved; (8) affordability of communities to medicine,
medicine and vaccine supplies in health facilities increased; and (9) number of new KB (family
planning) program increased to 9,58 million with active KB participants 34.87 persons.
Tourism and Culture Function
The budget of toursim and culture function allocated through Central Government
Expenditures are to augment the prosperity of people by way of toursim and culture
promotion. In 2007-2012 budget for tourism and culture function is to rise 11.3 percent per
annum on the average, from Rp.1.9 trillion in 2007 to Rp.3.2 trillion in 2012. This budget
increase reflects the seriousness of the Government in augmenting people’s welfare through
policy diversification including in tourism and culture sector. Budget allocated to this tourism
and culture function is distributed in some sub-functions: (1) tourism and culture development
sub-function (42.9 percent of tourism and cultural function), (2) publication and broadcasting
sub-function (6.6 percent), (3) tourism and culture research and development sub-function
(1.1 percent); (4) other tourism and culture sub-function (12.6 percent). The vision brought
by the Government to promote tourism and culture is obviously reflected from the relatively
enormous proportion of budget allocation to tourism and cultural development sub-function.
Budget realization during 2007-2012 of some significant sub-functions in tourism and culture
function can be illustrated as follows: (1) budget of tourism and culture development subfunction to rise by 26.6 percent on the average per annum, i.e. from Rp.0.5 trillion in 2007 to
Rp.1.6 trillion in 2012, especially used to finance tourism development program; and (2)
budget of other tourism and culture sub-function in 2007 – 2012 which increases 17,0 percent
per annum on the average, i.e. from Rp.379.0 billion in 2007 to Rp.831.6 billion in 2012 to
run some programs namely: (1) support program for the management and implementation
of other technical tasks of the Ministry of Tourism and Culture; (2) cultural, art and film
4-14
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
value development program; (3) human resources management program; (4) tourism
marketing development program; and (5) history, archeology and museum development
program. The trend of budget realization for tourism and culture function in 2007-2012 is
presented in Graph 4.9.
Trillion Rp
The outcomes of programs and
GRAPH 4.9
TOURISM AND CULTURE FUNCTION EXPENDITURE ,
activities in tourism and activities
2007-2012
under tourism and culture function in
Other Tourism and Culture
3,5
2007-2012 include: (1) in 2011, the
3,0
foreign tourists recorded 7.65 million
Competition Sport Deve lopment
to increase 9.24 percent if compared
2,5
Publ ication and Broadcasting
with 2010 and reaped foreign
2,0
Development
exchange worth USD8.55 million or to
1,5
Youth and Sport Development
rise 12.51 percent from last year’s
1,0
Tourism and Culture Promotion
realization at USD 7.60 billion;
0,5
(2)elevated competitiveness of
Indonesian tourism at global level in
2007
2008
2009
2010
2011
2012
APBN-P
2011 at 74th rank of 139 countries Source: the Ministry of Finance
from previously 81st rank of 133
countries in 2009; (3) integrated cultural site management (Borobudur temple compound,
Prambanan temple compound, and Sangiran Primordial Man Site); (4) library and
information service improvement in 33 provincial libraries, 300 district/city libraries, 3,120
village libraries and the provision of 55 mobile library cars; (5) facilitation for the provision
of art and cultural facilities in 14 provinces and 247 districts/cities; (6) the implementation
of 21 researchers in cultural fields and 155 archeological researchers; and (7) facilitation for
creativity and capacity building in science and technology and Imtaq for 3,180 persons in
art, culture and creative industries for 3,180 persons.
Religion Function
Budget realization of Central Government Expenditures for religion function is to comply
with the Government’s obligations in religious affairs and to maintain the harmony and
communion of relious life. In 2007-2012 budget of religion function records average increase
of 13.7 percent per annum, from Rp.1.9 trillion in 2007 to Rp.3.6 trillion in 2012. Such
realization is allocated for several sub-functions, to with: (1) religious life promotion subfunction (44.5 percent); (2) religious communion sub-function (2.4 percent); (3) religion
research and development (20.0 percent); and (4) other religious service sub-function (33.0
percent).
The illustration of budget realization of some significant sub-function within religion function
during 2007-2012 is as follows. Budget of religion research and development sub-function
in 2007-2012 to rise 142.3 percent per annum on the average, from Ro.20.0 billion in 2007
to Rp.1.7 trillion in 2012. This realization is mostly for Islamic Community Development
Program and Non-Islamic Community Development Program. For the same period, budget
realized for religious life promotion sub-function to increase 15.3 percent per annum on the
average, i.e. from Rp.419.6 billion in 2007 to Rp932.2 billion in 2012. The latter is particularly
to promote the harmony and tolerance of religious life within the communities. The trend of
budget realization of religious function during 2007-2012 is presented in Graph 4.10.
The outcomes of programs carried out by the Government in Religion Function aiming to
foster harmonious religious life and improve religious services include: (1) harmonized social
and religious life in conflict-torn regions, improved capacity in dealing with post-conflict
trauma, local leader empowerment, enhanced effectiveness of mediation through religion
harmony forum (FKUB) established in all provinces and 421 districts/cities, and conflict
prevention development in conflict-prone regions; (2) hajj pilgrim management system
Financial Notes and Indonesian Budget 2013
4-15
Chapter IV
GRAPH 4.10
RELIGION FUNCTION EXPENDITURE ,
2007-2012
4,0
Other Religious Services
3,5
Religion Research and
Development
3,0
Trillion Rp
restructuring and improvement
with laws, operational procedure
and management, advocacy to the
pilgrims and service and protection
of the pilgrims starting from the
registration to hajj rites in Saudi
Arabia and their return to
Indonesia; and (3) assistance for the
rehabilitation of worship places after
disaster, allowances for religion
counselors, and the provision of
facilities and infrastructure for
religius affairs.
Central Government Expenditure
2,5
Religious Life Harmony
2,0
Religious Life Development
1,5
1,0
0,5
2007
2008
2009
2010
2011
2012
APBN-P
Source: the Ministry of Finance
Education Budget
Budget of Central Government Expenditures in education function is used to support
education services under the responsibility of the Government. In 2007-2012 budget of
education function records an average increase of 17.7 percent per annum, from Rp.50.8
trillion in 2007 to Rp115.0 trillion in 2012. This budget realization and proportion of education
function consist of several sub-functions: (1) basic education subs-function (34.5 percent of
total education function), (2) secondary education sub-function (8.1 percent); (3) tertiary
education sub-function (29.7 percent); (4) education service assistance sub-function (12.4
percent); (5) non-formal and informal education sub-function (2.5 percent); (6) religion
education sub-function (1.6 percent); (7) other education sub-function (7.9 percent); (8)
early childhood education sub-function (0.6 percent); (9) service education sub-function
(0.4 percent); (10) education research and development (1.0 percent); and (11) youth and
sport development sub-function (0.9 percent). High proportion of budget allocation for basic
education sub-function in 2007-2012 shows support to Government’s policy in accomplishing
9-year compulsory education program.
Budget realization for some significant sub-functions of education function in 2007-2012
can be illustrated as follows. In 2007 – 2012 budget allocated to basic education sub-function
is to increase 7.6 percent per annum on the average or from Rp.22.5 trillion in 2007 to
Rp.32.4 trillion in 2012. This realization is particularly for intensive campaign of 9-year
compulsory basic education program. During the same period, budget for secondary education
sub-function records an average increase of 17.6 percent per annum, from Rp.4.1 trillion in
2007 to Rp.9.3 trillion in 2012. Such budget realization is to run secondary education program
either general education or religious education. Meanwhile, budget realization for tertiary
education is to rise by 43.4 percent per annum on the average, i.e. from Rp.6.9 trillion in
2007 to Rp.41.9 trillion in 2012. This budget of tertiary education sub-function is mostly for
the provision of tertiary education services covering administration, operation or supports
to run tertiary education services. Budget realization for religious education sub-function in
21007 – 2012 is to increase by 76.6 percent on the average per annum, i.e. from Rp.192.4
billion in 2007 to Rp.3.3 trillion in 2012. This budget realization is particularly used for: (1)
Islamic education program; (2) Christian community counseling program (3) Hindu
community counseling program; and (4) Budda community counseling program.
The outcomes of various programs and activities in education function during 2007 – 2012
include: (1) School Operation Aids (BOS) increased evident from: (1) school operation aids
(BOS) for around 35.2 million students in 2007 to around 44.7 million students in 2012; (2)
schoolarship for 3.6 students of low-income people at basic, secondary and tertiary degrees
in 2008 and predicted to reach 8.2 million students in 2012; (3) higher education at
4-16
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Trillion Rp
community level indicated with
GRAPH 4.11
EDUCATION FUNCTION EXPENDITURE ,
higher school participation average
2007-2012
of schooling-age people of 15-years
Education Research and
old and above, i.e. 7.92 years in 2010;
100,0
Development
90,0
Religiousity Education
(b) decreased illiteracy rate of
80,0
population at 15-years old and over
Assistance Services to Education
70,0
to 5.0 percent in 2012; increased
60,0
Tertiary Education
50,0
school participation for (APM) SD/
40,0
Non-Formal and Informal
SDLB/MI/Paket A to 95.6 percent in
Education
30,0
2011; (d) increased APM SMP/
Secondary Education
20,0
10,0
SMPLB/MTs/Paket B to 77.7
Basic Education
percent in 2011; (e) increased rough
2007
2008
2009
2010
2011
2012
APBN-P
participation rate (APK) SMA/SMK/ Source: the Ministry of Finance
MA/Paket C to 76.5 percent in 2011;
(f) increased APK PT of 19-23 years old to 27.1 percent in 2011; and (4) increased proportion
of teachers qualifiying minimum S1/S4 degree to 58.0 percent and certified teachers to 45.9
percent in 2011. The trend of budget realization for education function in 2007-2011 is
presented in Graph 4.11.
Social Protection Function
Budget realization of Central Government Expenditures in Social Proctection Function is
allocated to meet the obligations of the Government in providing social protection to the
people. In 2007-2012 budget of social protection function is to rise by 16.0 percent per annum
on the average i.e. from Rp.2.7 trillion in 2007 to Rp.5.6 trillion in 2012. This realization is to
run for several sub-functions: (1) social protection and services sub-function to ailing persons
and the disabled (2.6 percent of total social protection function); (2) social protection and
services sub-function for the elderly (1.1 percent); (3) social protection and services sibfunction to children and families (17.7 percent); (4) women empowerment sub-function
(3.0 percent); (5) social assistance and insurance sub-function (28.2 percent); (6) social
protection research and development sub-function (3.5 percent); and (7) other social protection
sub-function (34.5 percent).
Tril lion Rp
The illustration of budget realization for some significant subfunctions of social protection
function during 2007-2012 is as follows. Budget allocation to social protection research and
development sub-function in 2007-2012 is to increase by 22.7 percent per annum on the
average, i.e. from Rp.87.0 billion in 2007 to Rp.242.0 billion in 2012. The proceeds of this
budget are to execute people’s welfare policy development coordination program. In the
same period, budget realization of
GRAPH 4.12
women emplowerment sub-function
SOCIAL PROTECTION FUNCTION EXPENDITURE ,
2007-2012
drops 1.5 percent per annum on the
Other Social Protection
average, from Rp.116.4 billion in 2007
6,0
Social Protection Research and
to Rp.107.7 billion 2012. Meanwhile,
Devel opment
5,0
budget realized for other social
Social Assistance and Insurance
4,0
protection sub-function records an
Social Guidance and Counseling
3,0
average increase of 112.6 percent per
Women Empowerment
2,0
annum from Rp.98.0 billion in 2007 to
Social Protection and Services to
Children and Families
Rp. 4.3 trillion in 2012. The trend of
1,0
Social Protection and Services to the
budget realization for social protection
Elderly
2007
2008
2009
2010
2011
2012
function in 2007-2012 is presented in
APBN-P
Source: the Ministry of Finance
Graph 4.12.
Financial Notes and Indonesian Budget 2013
4-17
Chapter IV
Central Government Expenditure
The implementation of programs under social protection function in promoting gender equality
has resulted in some outcomes at national and regional level such as: (1) eleven ministries/
agencies (K/L) have prepared Gender-Responsive Planning and Budgeting (PPRG), and in
2012 such PPRG will be applied in 28 K/L; (2) three provinces have introduced PPRG at
their own initiatiaves, and in 2012 PPRG will be applied in 10 provinces. To serve women
and children suffering violation some assistances have been provided inclusive of: (1)
Integrated Service Center for Women and Children Empowerment (P2TP2A) in 24 provinces
and 157 districts/cities; (2) Women and Childred Service Unist (UUPA) in police precints
throughout Indonesia; (3) twenty two (22) integrated crisis center (PKT) in Regional and
Vertical General Hospital (RSUD) and 43 integrated service centers (PPT) in Police Hospitals;
and (4) thirty three (33) Traumatic Protection Center (RPTC), fifteen (15) Social Protection
Shelters for Children (RSPA) and one (1) Social Protection Center of women.
4.2.2 The Trend of Budget Implementation of Central
Government Expenditures by Organizations
Pursuant to Law Number 17 of 2003 concerning State Finance, every year the Government
is required to present its fiscal policy highlights on State Finance and macroeconomic
framework for the coming fiscal year to the House of Representatives (Parliament). In this
respect, Law No. 17 of 2003 stipulates that the government expenditures are detailed by
organizations, functions and types of spendings. Then, the Government along with the House
of Representatives (DPR) discuss general policy and priority budget as reference for the
ministries/agencies (K/L) in preparing their budget.
Based on the above policy, K/L as the users of budget and/or goods must prepare work and
budget plan of their ministries/agencies (RKA-K/L) respective of their tasks and functions.
Thereafter, K/L must also implement,
GRAPH 4.13
account for and report the realization of
K/L EXPENDITURE TREND, 2007-2012
budget and performance achieved.
6,4
7,0
According to evaluation against the trend 600
5,7
5,6
5,5
6,0
5,2
500
5,2
of budget implementation of Central
5,0
Government
Expenditures
by 400
4,0
Organizations during 2007-2012 it can be 300
3,0
concluded that at least there 3 aspects that 200
2,0
must be considered. First, the budget 100
1,0
realization of K/L experiences significant
0
increase in nominal wise, i.e. 19,6 percent
2007
2008
2009
2010
2011
2012
per annum on the average, from Rp.225.0
trillion (5.7 percent of GDP) in 2007 to
Rp.547.9 trillion (6.4 percent of GDP) in
GRAPH 4.14
APBNP 2012 (see Graph 4.13).
K/L EXPENDITURE ABSOPRTION , 2007-2012
trillion rupiah
percent
APBNP
LKPP
% LKPP to GDP
Source: the Ministry of Finance
trillion rupiah
Second, budget absorption of K/L records
an average of 90.9 percent per annum
with relatively stable trend at 90 percent.
(See Graph 4.14).
Third, the portion of K/L budget to total
Central Government Expenditures is to
surge up from 44.6 percent in 2007 to
around 51.2 percent in 2012. The main
contributing factors of this higher portion
600
percent
92,0
89,5
91,8
90,9
100
90,5
90
500
80
70
400
60
300
50
40
200
30
20
100
10
0
2007
2008
APBNP
2009
LKPP
2010
% LKPP to AP BNP
2011
2012
Av erag e Absoprtion
Source: the Mini stry of Finance
4-18
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
of K/L budget to total allocation of Central Government Expenditures are due to:
(1) basic salary and meal allowance increase; (2) additional K/L budget as directed by the
president; (3) budget allocation of 20 percent for education; and (4) reallocation of State
General Treasurer Budget (BA BUN) to K/L budget section for transparency and
accountability.
To carry out five main national development agendas for 2010 – 2014, i.e. (1) economic
development and people’s welfare augmentation; (2) governance improvement; (3)
democracy pillar enforcement; (4) law enforcement and corruption eradication; and (5)
inclusive and sustainable development reflecting the president’s platform during the
implementation of RPJMN (Mid-Term National Development Plan) 2004 – 2009) and the
second year of the implementation of RPJMN 2010-2014 expenditure budget for K/L is
allocated to 86 K/L which have had their separate budget section, i.e.: (1) 33 ministries; (2)
3 coordinating ministries; (3) 6 agencies; (4) 38 government institutions; and (5) six
commissions.
Of budget K/L allocation in 2012, which amounts Rp.547.9 trillion, these ministries/agencies
(K/L) can be classified into: (1) K/L under the Coordinating Ministry for Economy (31 K/L
with budget proportion 37.3 percent of total K/L budget); (2) K/L under the Coordinating
Ministry of Politics, Laws, and Security (30 K/L with budget proportion 31.0 percent of total
K/L budget); and (3) K/L under the Coordinating Ministry of People’s Welfare (22 K/L with
budget proportion 31.7 percent of total K/L budget).
K/L under the Coordinating Ministry of the Econmy include: (1) the Ministry of Public Works;
(2) the Ministry of Transportation; (3) the Ministry of Agriculture; (4)the Ministry of Finance;
(5) the Ministry of Energy and Mineral Resources; (6) the Ministry of Forestry; (7) the
Ministry of Marine and Fishery; (8) the Ministry of Manpower and Transmigration; (9)
Central Bureau of Statistics; and (10) the Ministry of Communication and Informatics.
K/L under the Coordinating Ministry of Politics, Laws and Security are: (1) the Ministry of
Defense; (2) Police of Republic of Indonesia; (3) the Ministry of Home Affairs; (4) the Ministry
of Laws and Human Resources; (5) the Ministry of Foreign Affairs; (6) Supreme Court; (7)
National Land Agency; (8) Attorney General Office; (9) House of Representatives (DPR);
and (10) The Ministry of State Secretariat.
K/L under the Coordinating Ministry of People’s Welfare include: (1) the Ministry of Education
and Culture; (2) the Ministry of Religions; (3) the Ministry of Health; (4) the Ministry of
Social Affairs; (5) the Ministry of People Housing; (6) Demography and Family Planning
Agency; (7) Sidoarjo Hot Mud Mitigation Agency; (8) the Ministry of Toursim and Creative
Economy; (9) the Ministry of Youth and Sports; and (10) National SAR Agency.
With reference to budget allocation in 2012, there are 10 K/L receiving the largest allocations,
i.e.: (1) the Ministry of Education and Culture (14.1 percent of K/L budget); (2) the Ministry
of Public Works (13.7 percent of K/L budget); (3) the Ministry of Defense (13.3 percent of
KL/Budget); (4) Police of Republic of Indonesia (7.6 percent of K/L Budget); (5) the Ministry
of Religions (7.2 percent of K/L budget); (7) the Ministry of Health (5.7 percent of K/L
budget); (8) the Ministry of Agriculture (3.1 percent of K/L budget); (9) the Ministry of
Finance (3.1 percent of K/L budget); and (10) the Ministry of Home Affairs (3.1 percent of
K/L budget). The next illustration on the trend of K/L expenditure will be presented in
narrative manner for K/L with the largest budget sections and/or K/L with the largest budget
absorptions.
Financial Notes and Indonesian Budget 2013
4-19
Chapter IV
Central Government Expenditure
The Ministry of Education and Culture
In the Ministry of Education and Culture, the trend of expenditure budget from 20072012 experiences average increase of 13.7 percent per annum, from Rp.40.5 trillion (1.0
percent to GDP) in LKPP 2007 to Rp. 77.2 trillion (0.9 percent of GDP in APBN 2012). This
budget allocation is to support the mission carried by the Ministry of Education and Culture
through several program, including: (1) research and development program of the Ministry
of Education and Culture; (2) basic education program; (3) secondary education program;
(4) tertiary education program; and (5) profession education program for teachers and
pedagogical staff and education quality supervisors. The trend of budget for the Ministry of
Education and Culture during 2007-2012 is presented in Graph 4.15.
Output of the above mentioned
programs are: (1) 2,432 new school
units (USB) at junior secondary degree
(SMP) built; (2) 283 new school units
(USB) at senior secondary degree
(SMA) built; (3) 2,338 and 607
libraries for respectively SMA and SMK
(Vocational School) provided; (4) BOS
channeled to 38.3 million elementary
(SD) and junior secondary (SMP)
students; and (5) teachers with S1/DIV
qualifications as established in Law
No. 14 of 2005 concerning Teachers
and Lecturers reaching 71.0 percent in
2012, which significantly increases
from realization in 2007 that only
recorded 41.7 percent.
GRAPH 4.15
EXPENDITURE TREND OF THE MINISTRY OF
EDUCATION AND CULTURE
percent
ttrillion rupiah
90,0
80,0
120,0
101,0
96,1
98,8
93,6
90,1
100,0
70,0
60,0
80,0
50,0
60,0
40,0
30,0
40,0
20,0
20,0
10,0
-
2007
2008
APBNP
2009
LKPP
2010
2011
2012
% LKPP to APBNP
Source: the Ministry of Finance
In addition, the achievements of the Ministry of Education and Culture during 2007-2012
can be classified into three main performance, i.e.: (1) access expansion to education; (2)equal
access to education; and (3) education quality and competitiveness improvement.
Outcome expected from budget allocation to various programs and activities executed by
the Ministry of Education and Culture during the said period include: (1) Bahasa Indonesia
as science and technology language and pillar to reinforce nation union and unity; (2) broader
and equal access to quality TK/TKLB, SD/SDLB, and SMP/SMPLB, gender equality in all
provinces, kabupten and cities; (3) broader and equal access to quality Senior Secondary
Schools (SMA), Senior Vocational Schools (SMK), Extraordinary Senior Secondary Schools
(SMLB)and relevant to community needs, gender equality in all provinces, kabupaten and
cities; (4) broader and equal access to quality and internationally competitive universities,
gender equality and relevant to the needs of nation and state; and (5) improved professionalism
of teachers and pedagogical staff and higher education quality toward national education
standards.
The Ministry of Public Works
In the Ministry of Public Works, budget allocation for 2007-2012 period shows average
incraease of 28.1 percent per annum, i.e. from Rp.22.8 trillion (0.6 percent of GDP) in LKPP
of 2007 to Rp.75.00 trillion (0.9 percent of GDP) in APBNP 2012. Consistent with such
trend, the budget portion of the Ministry of Public Works to total K/L budget is also to rise
from 10.1 percent in 2007 to 13.7 percent in APBNP 2012. Budget allocation for the Ministry
of Public Works during such period is mostly used to support the Government’s initiatives in
4-20
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
realizing one of national development
GRAPH 4.16
THE EXPENDITURE TREND OF THE MINISTRY OF PUBLIC
agendas as proclaimed in RPJMN 2010WORKS
2014 i.e. economic development and
people’s welfare augmentation through 80,0
120,0
102,6
improved regional accessibility and 70,0
93,5
91,5
90,7
90,8
100,0
mobility with the existing, integrated 60,0
and sustainable networks to support 50,0
80,0
economic growth, to improve
40,0
60,0
governance, and inclusive and impartial
40,0
development. The realization of budget 30,0
in the Ministry of Public Works is 20,0
20,0
10,0
mainly
allocated
to
finance
infrastructure development and
2007
2008
2009
2010
2011
2012
provision acceleration so as to boost
APBNP
LKPP
% LKPP to APBNP
economic growth in various programs,
Source: the Ministry of Finance
including: (1) construction development
program; (2) settlement development
and expansion program; (3) road operation program; (4) spatial management program;
and (5) water resources management program. The trend of expenditure budget in the Ministry
of Public Works during 2007-2012 is presented in Graph 4.16.
trillion rupiah
percent
Output produced from the implementation of such various program in 2011 are: (1)
cooperation in construction skill training/certification with private education/training
institutions/construction service communities consisting of 15 cooperation reports; (2)
emergency response infrastructure/urgent needs of 16 packages; (3) low-cost apartment
(rusunawa) including the supporting infrastructure of 65 twin blocks; (4) road expansion
capacity at the main traffic corridors 3,292 km long; (5) national road preservation 35,358
km long and bridge 223,734 m long; (6) new and improved irrigation networks 66,249 ha;
(7) new/improved swamp reclamation networks 70,510 ha; and (8) development program
harmonization with RTRW (Regional Spatial Planning) in 32 provinces.
Outcome generated from the allocation of expenditure budget to the Ministry of Public Works
during the said period are: (1) capacity and performance of central and regional construction
service providers improved; (2) more cities introducing norms, standards, procedures and
criteria in settlement area development according to regional spatial planning, and more
areas receiving settlement infrastructure service access; more links categorized in good
conditions, i.e. 90.5 percent and more kilometers of national links to 98,318 km; (4)
harmonious development plan with spatial planning, consistent infrastructure development
program (especially public work and settlement infrastructure) with national regional spatial
planning, and enhanced management quality; and (5) performance in water resources
management improved.
The Ministry of Defense
Budget allocation to the Ministry of Defense in 2007-2012 records steady increase at 21.1
percent per annum on the average, i.e. from Rp.30.6 trillion (0.8 percent of GDP) in LKPP
2007 to Rp.72.9 trillion (0.9 percent of GDP). Such budget allocation is to support the
realization of mission of the Ministry of Defense, i.e. to realize safe and peaceful Indonesia
with defense development target toward minimum essential force (MEF). The realization of
budget allocation of the Ministry of Defense during 2007-2011 are mainly reflected in the
following programs: (1) defense technology and industry development program; (2) integrated
denfense power use program; (3) land military force preparedness support program; (4)
modernization program for primary weaponry system and non-primary weaponry system
Financial Notes and Indonesian Budget 2013
4-21
Chapter IV
Central Government Expenditure
and facility and infrastructure development for sea military force; and (5) modernization
program for primary weaponry system and non-primary weaponry system and facility and
infrastructure development for air military force.
The realization of expenditure budget in the Ministry of Defense during such period is used to
support the following activities: (1) power and capacity development and expansion of
Indonesian Armed Forces’ system, personnel, materials and facilities; (2) defense capacity
building at MEF scale to reach primary weaponry system preparedness of 43.67 percent by
2012; and (3) new procurement, repowering of primary weapons that are economically
operatable. In addition, such budget realization for the Ministry of Defense is expended for
the financing of Indonesian Armed Forces’ facility, infrastructure and services with the output
of, among other things, the development/renovation of houses/accommodation for the
soldiers, officiers, headquarters and maintenance facilities.
In 2007-2012 some significant achievements in defense sector have been attained such as:
(1) MEF at 28.7 percent; (2) 219 border posts erected; (3) self-reliance in defense industry
achieved at 15.8 percent of Indonesian Armed Forces’ primary weaponry system; (4) lowering
security disturbance and legal offenses
at seas; (5) number and conditions of
GRAPH 4.17
EXPENDITURE TREND OF THE MINISTRY OF DEFENCE
defense equipment toward primary
weaponry system modernization and
trillion rupiah
percent
operation preparedness; (6) anti80,0
120,0
107,3
102,8
102,3
98,8
corruption declaration of the Ministry
70,0
95,4
100,0
of Defense and Indonesian Armed
60,0
Forces (TNI) issued in 2011; and (7)
80,0
50,0
Regulation of the Minister of Defense
40,0
60,0
Number 21 of 2010 concerning
30,0
Internal Control System within the
40,0
Ministry of Defense and Indonesian
20,0
20,0
Armed Forces (TNI) as elucidation of
10,0
Government Regulation Number 60
of 2008 concerning Government
2007
2008
2009
2010
2011
2012
Internal Control System issued. The
APBNP
LKPP
% LKPP to APBNP
Source: the Mi nistry of Finance
trend of expenditure budget of the
Ministry of Defense in 2007-2012 is
presented in Graph 4.17.
Output of the above programs are inclusive of: (1) primary weaponry system procurement
for weapons, small calibre munitions (MKK), big calibre munitions (MKB), and special
munitions (MK) reaching 100 percent; (2) primary weaponry sytem procurement for weapons
and optical equipment, tactical vehicles reaching 100 percent; (3) PC-40 me fiber glass
developed in fasharkan Mentigi and fasharkan Manokwari, and sea hunter; (4) floating
equipment, RI’s ships (KRI), marine combat equipment (heavy equipment and zeni),
ammunition and explosive procured; and (5) aircraft procurement for fighter jets, transport
aircrafts, helicopters and training aircrafts procured at 100 percent.
From such programs and activities, the outcome achieved include: (1) the production of
domestic primary weaponry system complied with in phases; (2) the adoption of integrated
defensive power capable of identifying, preventing, quelling threaths in integrated, effective
and timely manner; (3) the preparedness of primary weaponry system and the facilities and
infrastructure to reach the target of military power and capacity of the Indonesian Army
(TNI AD) toward MEF realized; (4) improved capacity and power of Indonesian Navy (TNI
AL) ready to operate and support task implementations according to the standards and
4-22
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
requirements with high supporting capacity, preventive capacity and combating capacity;
and (5) modernization and improvement of primary weaponry system and the associated
facilities and infrastructure to reach the military power and capacity of Indonesian Air Force
(TNI AU) at MEF level.
The National Police of Republic of Indonesia
As to the National Police of Republic of Indonesia (Polri), the trend of its expenditure budget
during 2007-2012 records average increase of 17.2 percent per annum, i.e. from Rp.19.9
trillion (0.5 percent of GDP) in LKPP 2007 to Rp.41.9 trillion (0.5 percent of GDP) in APBN
2012. Such budget allocation is to support the attainment of Polri’s mission, i.e.: (1) give
protection, defense and service to prevent the public from any physical or psychological
disturbances; (2) provide guidance to the people through preemptive and preventive measures
that will elevate the awareness and power and legal compliance of people; (3)uphold laws
in professional and proportional manner while highly respecting law supremacy and human
rights to establish legal certainty and justice; (4) maintain law and order while respecting
norms and values applicable within the integrated jurisdiction of the Unitary State of Republic
of Indonesia; (5) manage human resources within the Polri in professional fashion to pursue
the envisaged goal, i.e. to establish sound domestic security that will encourage performance
of the Police to support people’s welfare augmentation; (6) intensify internal consolidation
so as to build same vision and mission of Polri in future; (7) maintain solidarity within Police
institution against any external interest that may be detrimental to the organization; (8)
continue security restoration operation in some conflict torn regions to maintain the unity of
Unitary State of Republic of Indonesia; and (9) enhance awareness of legal compliance and
nation life within diverse society (berbhineka tunggal ika).
The realization of Polri’s budget during 2007-2012 is mostly used to run various programs:
(1) Police research and development program; (2) law and order strategy development
program; (3) public law and order maintainance program; (4) criminal investigation and
probe program; and (5) domestic security maintenance program against highly serious
threats. The trend of Polri’s expenditure budget in 2007 – 2012 is presented in Graph 4.18.
Output produced from the said
programs are: (1) 31 documents of
prototype and reviews; (2) 2,455
regional security strategy services;
(3) equipment provision for law and
order maintainance consisting of
28,590 units; (4) the settlement of
regional crimes of 33,725 cases; and
(5) 82 domestic security disturbance
management reports.
GRAPH 4.18
EXPENDITURE TREND OF NATIONAL POLICE
trillion rupiah
45,0
40,0
percent
108,1
99,5
110,0
105,0
96,4
120,0
100,0
35,0
30,0
80,0
25,0
60,0
20,0
15,0
40,0
10,0
20,0
Meanwhile, the outcomes of programs
5,0
financed under Polri’s budget during
2007
2008
2009
2010
2011
2012
such period are: (1) technology based
APBNP
LKPP
% LKPP to APBNP
Polri’s equipment capable of dealing
Source: the Ministry of Finance
with various crimes; (2) early
identification of potential security disturbances that may spark public anxieties; (3) wellmaintained public law and order capable of protecting all communities; (4) decreasing crime
rates of various types (conventional crimes, transnational crimes, crimes with contingency
implications and crimes against state assets) without violating human rights; and (5) safety
Financial Notes and Indonesian Budget 2013
4-23
Chapter IV
Central Government Expenditure
to the communities from any law and order disturbance, especially massive threaths (e.g.
riots, organized crimes, etc.).
The Ministry of Religions
Expenditure budget of the Ministry of Religions during 2007-2009 increases by 26.9 percent
per annum on the average, from Rp.13.3 trillion (0.3 percent of GDP) in LKPP 2007 to
Rp.39.4 trillion (0.5 percent of GDP)
in APBNP 2012. With such progress,
GRAPH 4.19
budget portion for the expenditures of
EXPENDITURE TREND OF THE MINISTRY OF
RELIGIONS
the Ministry of Religions to total K/L
budget is to rise from 5.9 percent in
trillion rupiah
percent
120,0
2007 to 7.2 percent in 2012. Such 45,0
99,4
99,6
40,0
allocation increase is mainly
93,8
93,0
93,0
100,0
attributable to initiatives of enhancing 35,0
80,0
the quality of religious life, creating 30,0
25,0
clean and dignified governance, and
60,0
improving public access to quality 20,0
40,0
education. The budget realization of 15,0
10,0
the Ministry of Religions during such
20,0
period is particularly to advocate the 5,0
believers of all religions to understand
2007
2008
2009
2010
2011
2012
their respective religious tenets, either
APBNP
LKPP
% LKPP to APBNP
vertically or horizontally and to look
Source: the Ministry of Finance
for same points on religious teachings
advocating peace, tolerance and caring among the others through various program, such
as: (1) hajj and umrah pilgrimage development and management; (2) Islamic education
program; (3) Islamic society development program; (4) Christian society development
program; (5) Catholic society development program; (6) Hindu society development program;
(7) Buddha society development program. The trend of budget realization of the Ministry of
Religions from 2007 to 2012 is presented in Graph 4.19.
Output produced from budget allocation of the Ministry of Religions in 2011 is inclusive of:
(1) more hajj pilgrims enjoying excellent services i.e. 221,000 persons; (2) 3,494 quality
pondok pesantren schools and religion education institutions developed; (3) assistance for
the development and empowerment of 270 religion social and education institutions; (4) the
development of 477 Christian religion and religiosity education institutions; (5) the
development of 297 Catholic students; (6) the development of 2,786 teachers of Hindu teaching
education; and (7) 7 Buddha religious events.
Outcome produced from budget allocated to the Ministry of Religions on such period are: (1)
the quality of hajj and umrah information development and services enhanced; (2) access,
quality and competitiveness of Islamic education improved; (3) the quality of counseling,
services, empowerment and potential development of religious believers fortified; (4)quality
of Christianity social and education services increased; (5) quality of Catholic social and
education services improved; (6) quality of Hindu social and education services increased;
and (7) quality of Buddha social and education services enhanced.
The Ministry of Transportation
Expenditure budget of the Ministry of Transportation in 2007 – 2012 records average increase
of 36.2 percent per annum i.e. from Rp. 9.1 trillion (0.2 percent to GDP) in LKPP 2007 to
Rp.38.1 trillion (0.4 percent of GDP) in APBNP 2012. This allocation is to support the
realization of mission carried by the Ministry of Transportation, i.e. to realize transportation
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Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
sector as core public service, which is determinant in fostering welfare society, and the success
of national development in general. The said mission stems from the notion believing that
transportation is the backbone of infrastructure development and in turn will augment the
nation and state lives in politics, economy, social-culture and defense-security sectors. Given
that, the development of transportation sector will be focused on reliable and competitive
transport services capable of generating added values. Reliable transportation is indicated
with safe, secured, comfortable, timely, well-maintained, sufficient, affordable transportation
operation embracing the entire regions throughout the country and capable of supporting
national development. The realization of expenditure budget for the Ministry of Transportation
shows upward trend during 20072012. The overwhelmingly allocation
GRAPH 4.20
EXPENDITURE TREND OF THE MINISTRY OF
is to finance the acceleration of
TRANSPORTATION
infrastructure development and trillion rupiah
percent
45,0
100,0
provision so as to boost economic
89,9
88,6
88,1
86,9
83,6
90,0
40,0
growth, which is executed in various
80,0
35,0
programs, including: (1) human
70,0
30,0
resources development program in
60,0
transportation; (2) land transportation
25,0
50,0
management and operation program;
20,0
40,0
(3)
railways
transportation
15,0
30,0
management and operation program;
10,0
20,0
(4) sea transportation management
5,0
10,0
and operation program program; and
(5) air transportation management
2007
2008
2009
2010
2011
2012
and operation program. The trend of
APBNP
LKPP
% LKPP to APBNP
expenditure budget of the Ministry of Source: the Ministry of Finance
Transportation in 2007 – 2012 is
presented in Graph 4.20.
Output produced from budget allocated to the Ministry of Transportation during the said
period is: (1) pioneer bus transport services consisting of 344 units to serve pioneer highway
routes; (2) the kilometers of railways double tracks increased, with the construction of railways
double tracks Yogyakarta-Kutoarjo (64 km), Cikampek-Cirebon (48 km), Duri-Tangerang
(20.19 km), Cirebon-Kroya at Patuguran-Purwokerto route (24.48 km), Tegal-Pekalongan
at Pemalang-Surodadi-Larangan route (22.7 km), Serpong-Maja (22.90 km), LamonganDuduk-Cerme at Bojonegoro-Surabaya Pasar Turi route (13.9 km), Brebes-Cirebon (62.85
km), Pekalongan - Semarang
(89.9 km); (3) railways tracks improvement/rehabilitation from 324.6 km in 2007 to 2,501.4
km in 2012 and the procurement of 193 trains and 199 units of diesel trains/electrical trains
and diesel-electrical trains; (4) the construction of 361 ferry ports (new and continuation)
during 2007 – 2012; (5) 23 unit of passenger ship fleets of PT Pelni and 61 pioneer passenger
ship fleets; (6) sea transport service network for cargos and passengers that until 2011 reaching
around 181 routes for domestic cargo transports, 28 routes of PT Pelni’s passanger transport
for PSO economic class service transport, 93 routes of private passenger transport (nonPelni) and 61 routes of pioneer sea transport; (7) the development and construction of ports
to support navigation such as public port (managed by PT Pelindo) in 614 locations, special
terminals in 546 locations, private terminals in 795 locations across the country; (8)
construction and development of strategic airports including Airport Hasanuddin Makassar,
Airport Soekarno-Hatta (terminal II expansion), Airport Kualanamu Medan Baru, Airport
Lombok Baru, and Airport Komodo Labuan Bajo; and (9) improved pioneer air transport
Financial Notes and Indonesian Budget 2013
4-25
Chapter IV
Central Government Expenditure
services to the local people from 91 routes and 83 cities in 2007 to 132 routes and 124 cities in
2012.
From the implementation of such varying programs, the outcomes produced from transport
infrastructure development are: (1) the quality of research and development results and
their uses in formulating transportation policy enhanced; (2) the performance of land
transport services improved; (3) the performance of railways transport services improved;
(4) the performance of sea transport services improved; and (5) air transport service and
management improved, which are more timely scheduled, integrated, safer and comfortable
and more efficient movements of passengers and goods and reduced air transport service
gap of regions.
The Ministry of Health
In the Ministry of Health, the expenditure budget during 2007-2012 shows average increase
of 17.1 percent per annum, i.e. from Rp.15.5 trillion (0.4 percent of GDP) in LKPP 2007 to
Rp.31.2 trillion (0.4 percent of GDP) in APBNP 2012. This allocation is to finance initiatives
of augmenting the people’s welfare with improved access to quality health services. The
realization of such expenditure budget during the said period is mainly used to support
infrastructure development and provision acceleration so as to elevate public health rate,
which is elaborated into several health development programs: (1) support program for the
management and implementation of technical tasks of the Ministry of Health; (2) supervision
and accountability improvement program to the officials of the Ministry of Health; (3) research
and development program of the Ministry of Health; (4) nutrition and health improvement
program for mothers and children; (5) health initiative development program; (6) disease
control and sanitation program; (7) pharmautical and health equipment development
program; and (8) human resources development and empowerment program in health sector.
Output of such programs are: (1) the status of 86 puskesmas promoted to Patient Care Unit
status (Puskesmas Perawatan) in inhibited border areas and small outer islands and 9,323
puskesmas delivering basic health services to poor households as of 2012; (2) 820 health
operators maximized and receiving incentives for their services in isolated, border areas and
small outer islands and other regions suffering health problems; (3) higher percentage of
pregnant mothers served by trained
GRAPH 4.21
health operators (childbirth services
EXPENDITURE TREND OF THE MINISTRY OF HEALTH
by health operators)from 77.21
percent in 2007 to 81.25 percent in trillion rupiah
percent
2011, and
higher complete
35,0
120,0
immunization rate from 92.1 percent
91,3
95,3
94,4
30,0
92,0
100,0
86,2
in 2009 to 93.4 percent in 2011; (4)
25,0
medicine and vaccine supplies
80,0
20,0
reaching 90 percent in 2012; and (5)
60,0
complete basic immunization package
15,0
for infants of 0 – 11 months reaching
40,0
10,0
97.3 percent, and number of villages
20,0
5,0
performing community based total
sanitation recording 11,000 villages as
of 2012. The illustration of expenditure
2007
2008
2009
2010
2011
2012
budget trend of the Ministry of Health
APBNP
LKPP
% LKPP to APBNP
from 2007 – 2012 is presented in Source: the Ministry of Finance
Graph 4.21.
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Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
From such budget allocation to the Ministry of Health some outcomes have been gained
including: (1) basic health initiatives, reference, traditional, alternative and complementary
health services, occupational health, sports and exercises, and standardization, accreditation
and health services improved; (2) health human resources improved in terms of quality and
quantity up to health service standards; (3) provision and access to quality health service
expanded for all social components; (4) pharmacy and health equipment supplies complying
with standards increased and affordable to common people; and (5) the lowering morbidity,
mortality and disability rates due to diseases.
The Ministry of Agriculture
Within the Ministry of Agriculture, the expenditure budget during 2007-2012 shows upward
trend with average increase of 24.2 percent per annum from Rp.6.5 trillion in LKPP 2007 to
Rp.17.1 trillion in APBNP 2012. Budget absorption of the Ministry of Agriculture during the
same period is accodingly to rise, i.e. from 80.9 percent of budget ceiling allocated for the
Ministry of Agriculture in APBNP 2007 to 90.1 percent of its ceiling in APBNP 2011. Such
budget allocation is to support the realization of Health Ministry’s mission, particularly in
efforts to augment the welfare of people, especially farmers with employment generation in
villages and economic growth, and to achieve national food resilience through agriculture
revitalization. The budget realization during the said period is mostly used to support the
capacity building of farmers to produce highly competitive commodities and maintain
domestic rice production at minimum 90.0% of total domestic needs to secure food selfsufficiency. This effort is carried out in several programs, including: (1) food crops production,
productivity
and
quality
improvement programs to reach
GRAPH 4.22
EXPENDITURE TREND OF THE MINISTRY OF
sustainable food self-sufficiency and
AGRICULTURE
food resilience; (2) agriculture facility
and infrastructure provision and trillion rupiah
percent
112,7
20,0
120,0
development program; (3) beef self90,1
18,0
sufficiency program to safeguard the
90,2
100,0
86,7
16,0
80,9
provision of safe, healthy, wholesome
14,0
80,0
and halal (religiously legal) beefs; (4)
12,0
technology and competitive superior
10,0
60,0
variety development program; (5)
8,0
40,0
agriculture human resources and
6,0
farmer institution development
4,0
20,0
2,0
program; and (6) sustainable
plantation production, productivity
2007
2008
2009
2010
2011
2012
and quality improvement program.
APBNP
LKPP
% LKPP to APBNP
The trend of expenditure budget of
the Ministry of Agriculture in 2007- Source: the Ministry of Finance
2012 is presented in Graph 4.22.
During 2007-2012 period, the output produced from such varying programs are: (1) rice
production increased, from 57.2 million tons of ground dry unhulled paddy (GKG) in 2007
to 68.59 million tons GKG in 2012 and corn production increased from 13.3 million tons dry
corn grains in 2007 to 18.95 million tons of dry corn grains in 2012; (2) more budget allocation
for direct assistance of superior seeds and national seed reserves from Rp.136.8 billion in
2006 to Rp.1.85 trillion in 2012; (3) sugar production increased by 2.5 percent per annum,
cacao production increased 1.83 percent per annum, tabacco production increased 0.31 percent
per annum, rubber production increased 4.0 percent per annum, coffee production increased
1.85 percent per annum; (4) beef production increased 5.01 percent per annum, lamb
Financial Notes and Indonesian Budget 2013
4-27
Chapter IV
Central Government Expenditure
production increased 1.36 percent per annum, fowl production increased 7.65 percent per
annum, and milk production increased 12.82 percent per annum; (5) chilli commodity
production increased 4.64 percent per annum, manggo commodity production increased
11.01 percent per annum, durian commodity production increased 3.87 percent per annum;
(6) farmer exchange rate increased from 100 in 2007 to 105.75 in 2011; (7) agriculture
infrastructure improvement and development as of 2011 covering tertiary irrigation networks
541,298 ha, village irrigation networks 355,361 ha, micro water management 170,761 ha,
agriculture paths and production paths 6,512 km, upstream watershed conservation 30,050
ha, paddy field expansion 144,664 ha, shallow wells (embung) 2,141 units, infiltration wells
2,674 units and ditches 295 units; (8) food pattern score increased from 74,0 in 2006 to 89.8
in 2012; (9) technology innovation inventing 201 superior varieties of paddy, 46 superior
varieties of corn, 71 superior varieties of beans, seven varieties of
donkeys, goats, chicken and ducks, 13 vaccine technologies; eight antigens, 10 diagnostic
kits and disease testing techniques, 25 superior varieties of horticulture, and 21 new superior
varieties of sugar canes; and (10) the development of integrated waste free planting-livestock
raising pattern, bio fertilizer product, biotechnology, integrated pest control, agriculture
machines and post-harvest.
Outcome of budget allocation to the Ministry of Agriculture during the said period include:
(1) the expansion of proper food crop farming introduction supported with sound post-harvest
management system and seed provision and efficient production safeguarding to achieve
adequate and sustainable food crop production; (2) agriculture facility and infrastructure
provision and development with land expansion and management; irrigation water
management; agriculture financing facilitation, fertilizer and pesticide facilitation; and
agriculture equipment and machines facilitation; (3) animal food supplies (meat, eggs, milk)
and improved contribution of domestic livestock in animal food provision (meat and eggs)
from domestic sources; (4) technology innovation and dissemination in agriculture; and (5)
food resilience with the empowerment, distribution, consumption and safety of fresh food
supplies at community level, and soundly coordinated food resilience policies.
The Ministry of Finance
Expenditure budget allocation in the Ministry of Finance during 2007-2012 records steady
increase of 24.0 percent per annum on the average, i.e. from Rp.7.0 trillion in LKPP 2007 to
Rp.16.9 trillion in APBNP 2012. Likewise, the realization of budget absorption of the Ministry
of Finance during the same period is also to rise from 78.8 percent to total budget ceiling set
for the Ministry of Finance in APBNP 2007 to 85.1 percent in APBNP 2011.
The realization of expenditure budget for the Ministry of Finance in the said period has been
allocated for: (1) tax revenue improvement and safeguarding program; (2) custom and excise
supervision, service and revenue program; (3) state treasury management program; (4)
state asset management program, the settlement of state receivables and auction services;
(5)education and training program for the officials of the Ministry of Finance; (6) fiscal
policy formulation program; (7) fiscal balance management of Central Government and
Regional Governments program; (8)
state budget management program; (9) accountability supervision and improvement
program for the officials of the Ministry of Finance; and (10) loan management and financing
program.
In 2011, the output produced from the above programs are: (1) 110 documents of
recommended policy formulation and audit supervision accomplished; (2) one document of
licensing policy and recommendation of custom facilities; (3) 32 review/monitoring and
4-28
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
evaluation reports of state finance; (4) five regulations/manuals on Governance Accounting
Standards accomplished; (5) two laws on state owned assets completed; (6) 4 implementation
regulations on budgeting finished; and (7) two documents of financial notes and Draft Law
on APBN and Draft Law on APBNP finalized.
Outcome from budget allocation for the expenditures of the Ministry of Finance in 2007 –
2012 include: (1) more optimum tax revenue; (2) custom and excise administrator capable
of facilitating the industries, trade sectors and communities and optimizing revenue; (3)
more professional, transparent and accountable state treasure management according to
the applicable regulations; (4) state asset management, settlement of government loans and
auction services in professional, orderly, well-targeted and optimum manner and able to
fortify good image to the stakeholders; (5) highly integrated and competent human resources;
(6) sustainable fiscal policy with measurable fiscal risks for stabilization and economic growth;
(7) enhanced effectiveness and
efficiency in the management of
GRAPH 4.23
EXPENDITURE TREND OF THE MINISTRY OF FINANCE
financial relation between the
Government and Regions; (8)
percent
budgeting functions exercised trillion rupiah
85,1
84,3
20,0
90,0
81,4
80,6
78,8
according to the laws and policies
18,0
80,0
outlined by the Government; (9)
16,0
70,0
supervision capable of generating
14,0
60,0
added value with more effective risk
12,0
50,0
10,0
management,
controlling,
40,0
8,0
governance and accountability of
30,0
6,0
officials within the Ministry of
20,0
4,0
Finance; and (10) more optimum
10,0
2,0
management
of
government
securities and loans to save APBN
2007
2008
2009
2010
2011
2012
financing. The trend of expenditure
APBNP
LKPP
% LKPP to APBNP
budget in the Ministry of Finance Source: the Ministry of Finance
during 2007 – 2012 is presented in
Graph 4.23.
The Ministry of Home Affairs
Expenditure budget for the Ministry of Home Affairs in 2007 – 2012 records an average
increase of 62.9 percent per annum, i.e. from Rp.3.1 trillion in LKPP 2007 to Rp.16.7 trillion
in APBNP 2012. With such increase, the portion of expenditure budget of the Ministry of
Home Affairs to total K/L budget is also to surge up from 1.4 percent in 2007 to 3.1 percent
in APBNP 2012.
Missions to support the vision of the Ministry of Home Affairs i.e. to establish democratic
political system, decentralized governance, sustainable regional development and participatory
community empowerment supported with professional human resources within the Unitary
State of Republic of Indonesia are expressed in several programs:
(1) accountability supervision and improvement program to the officials of the Ministry of
Home Affairs; (2) research and development program within the Ministry of Home Affairs;
(3) education and training program for the officials of the Ministry of Home Affairs; (4)
regional development program; (5) decentralization and regional autonomous management
program; (6) public administration reinforcement program; (7) financial capacity building
program for regional governments; and (8) demographic administration program. The trend
of expenditure budget for the Ministry of Home Affairs during 2007 – 2012 is presented in
Graph 4.24.
Financial Notes and Indonesian Budget 2013
4-29
Chapter IV
Central Government Expenditure
Outputs produced from the above
GRAPH 4.24
program include: (1) higher EXPENDITURE TREND OF THE MINISTRY OF HOME AFFAIRS
compliance percentage of officials in trillion rupiah
percent
performing the tasks and functions in
18,0
120,0
103,3
working units of the Ministry of
16,0
92,8
100,0
90,4
79,7
Home Affairs such as in Directorate
14,0
80,1
General of Regional Autonomy,
12,0
80,0
Education and Training Center,
10,0
Institute
of
Home
Affairs
60,0
8,0
Governance (IPDN) and National
6,0
40,0
Border Management Agency (BNPP)
4,0
reaching 80 percent in 2011; (2)
20,0
2,0
independent review of the affects of
awareness level of SMA (Senior
2007
2008
2009
2010
2011
2012
Secondary School) students and
APBNP
LKPP
% LKPP to APBNP
equal students on the ownership of
Source: the Ministry of Finance
ID Cards (KTP) (case study in SMAN
69 and SMK61 in Kabupaten
Kepulauan Seribu); (3) 30 of 90 target norms, standards, procedures and criteria (NSPK) of
substantive education and training centers of regional governments prepared as of 2011;
(4) regional infrastructure social and economics (RISE) program facilitated in 9 provinces,
34 kabupaten; (5) number of regions conducting regional head election reaching 8 provinces
for the election of governor and vice governor; 80 kabupaten for the election of regent and
vice regent and 12 cities for the election of mayor and vice mayor; and (6) number of regions
establishing one stop integrated services (PTSP) reaching 444 provinces/kabupaten/cities.
Outcome of budget allocation for the expenditures of the Ministry of Home Affairs during
the said period include: (1) improved performance in executing the tasks and functions as
government officials, and more transparent and accountable financial management; (2)
the utilization of research results as recommendations in policy formulation; (3) more number
of alumni, suitability of participants with education and training requirements and education
and training reform for officials within the Ministry of Home Affairs and regional governments;
(4) quality of regional development planning enhanced, the availability of growth map of
the region concerned in view of local and regional gaps as basis in formulating fiscal balance
(DAK, DAU and DBH) and quality in spatial planning, protection and environmental
management improved; (5) better implementation of governance affairs and minimum
service standard in regions, better performance of regional governments, new autonomous
regions evaluated; and basic strategies for regional management prepared, and Law Number
32 of 2004 revised; and (6) poor people and villagers empowered.
In terms of average absorption from 2007-2011, there are ten K/L with the largest budget
absorption, to wit: (1) National Police of Republic of Indonesia (103.8 percent of the ceiling);
(2) National Disaster Management Agency (101.8 percent of the ceiling); (3) The Indonesian
Institute of Sciences (101.6 percent of the ceiling); (4) the Ministry of Defense (101.3 percent
of the ceiling); (5) State Intelligent Agency (99.8 percent of the ceiling); (6) Central Bureau
of Statistics (99.3 percent of the ceiling); (7) National Cryptogram Agency (99.2 percent of
the ceiling); (8) the Ministry of Youth and Sports (99.0 percent of the ceiling); (9) Demography
and National Family Planning Agency (98.0 percent of the ceiling); and (10) Attorney General
Office of Republic of Indonesia (97.9 percent of the ceiling). The output and outcome of
some K/L with the largest budget absorption as indicated above are as follows:
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Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
National Disaster Management Agency (BNPB)
Expenditure budget for the National Disaster Management Agency (BNPB) in 2007-2012 is
to rise 124.5 percent per annum on the average, from Rp.46.7 billion in LKPP 2007 to Rp.1.1
trillion in APBNP 2012. With such progress, the portion of expenditure budget for BNPB to
total K/L budget increases from 0.02 percent in 2007 to 0.2 percent in APBNP 2012.
Accordingly, the realization of BNPB budget in the same period is also to rise, from 84.4
percent of APBNP 2007 to 131.3 percent of its ceiling in APBNP 2011.
Budget realization of BNPB in such period is to support: (1) support program for the
management and implementation of other technical tasks of BNPB; (2) facility and
infrastructure improvement program for BNBP officials; (3) supervision and accountability
improvement program for BNPB officials; and (4) disaster management program.
From 2007 – 2011, output produced from various programs above are inclusive of: (1) two
international cooperations in disaster management; (2) five ambulance cars; (3) four
socialization reports of financial supervision guidelines; (4) disaster risk mitigation facilitated
in 74 locations; (5) rehabilitation and reconstruction in disaster ravaged regions; and (6)
disaster risk mitigation implemented in 33 provinces.
Outcome produced from budget allocation for BNPB in such period are including:
(1) coordination and integration of planning, development and controlling of program,
administration and facilities and infrastructure and cooperation within BNPB improved; (2)
accountable supervision and inspection of tasks performed by internal units within BNPB;
(3) post-disaster rehabilitation and reconstruction in coordinated and integrated manner;
and (5) coordination and emergency management in disaster ravaged regions improved.
The Indonesian Institute of Sciences (LIPI)
Expenditure budget for the Indonesian Institute of Sciences (LIPI) in 2007-2012 experiences
average increase of 13.5 percent per annum, i.e. from Rp.570.5 billion in LKPP 2007 to
Rp.761.7 billion in APBNP 2012. Accordingly the realized absorption of LIPI expenditure
budget also records an increase, i.e. from 96.0 percent to APBNP 2007 to 107.6 percent of its
ceiling in APBNP 2011.
Budget realization for LIPI expenditures is used to support: (1) management support program
for the implementation of other technical tasks of LIPI; (2) science and technology research,
mastery and utilization program.
In 2007-2011 period, output of the foregoing program are: (1) cooperation between research
and development (RD) centers and between RD centers and universities; (2) dissemination
and application of applied technology to increase technology based business productivity in
regions; (3) characterization and valuation of ecosystem functions and anticipation to climate
change of 20 reports; and (4) capitalization and utilization of LIPI’s patents and invention
with economic values and beneficial to the people.
Outcome produced from expenditure budget allocated to LIPI in the said period are: (1) core
competency fortified; (2) efficient and effective research and development governance; (3)
capacities in scientific research, development and application improved; and (4) broader
public access to sciences.
National Intelligent Agency (BIN)
Expenditure budget allocated for the National Intelligent Agency (BIN) in 2007-2012 records
an average increase of 7.5 percent per annum, i.e. from Rp.1.0 trillion in LKPP 2007 to
Financial Notes and Indonesian Budget 2013
4-31
Chapter IV
Central Government Expenditure
Rp.1.5 trillion in APBNP 2012. The realization of expenditure budget for BIN is particularly
to support: (1) investigation development program for national security and safeguarding;
(2) support program for the management and implementation of other technical tasks in
national intelligent; and (3) supervision and accountability improvement program for BIN
officials. Through 2011, output produced from the foregoing programs are: (1) 12 overseas
intelligent operation planning and implementation and operation supports; (2) terrorism
counter operation (prevention and deterrence) of 12 reports; (3) education and training for
the government officials; and personnel investigation and supervision.
Outcome of budget allocation for BIN expenditures in the above period are: (1) improved
investigation for national security and safeguarding; (2) better technical and administrative
service support to national intelligent; and (3) more technical and administrative support to
the national intelligent.
Central Bureau of Statistics (BPS)
Expenditure budget of Central Bureau of Statistics (BPS) in 2007-2012 is to rise by 37.4
percent per annum, i.e. from Rp.1.2 trillion in LKPP 2007 to Rp.2.3 trillion in APBNP 2012.
Budget realization of BPS expenditures is used to support: (1) statistical information provision
and service program; (2) supervision and accountability improvement program to BPS
officials; (3) support program for the management and implementation of other technical
tasks of BPS; and (4) facility and infrastructure improvement program for BPS officials.
In 2011, the output produced from such programs are: (1) ten titles of publication on statistical
analysis development accomplished; (2) three titles of publication on social resilience statistics
accomplished; (3) one monitoring report of follow up actions of audit findings Region I; and
(4) 28 PR service, legal and institutional relation meetings convened.
Outcome produced of budget allocation for BPS in 2007-2012 period are including: (1)
improved data and information supplies in complete, accurate and timely manner; (2)
enhanced quality of financial and material management accountability; (3) good governance
and clean government; and (4) infrastructure and facilities to support the performance of
technical activities.
National Cryptogram Agency
Expenditure budget for the National Cyptogram Agency in 2007 – 2012 records an average
increase of 29.7 percent per annum, i.e. from Rp.1.0 trillion in LKPP 2007 to Rp.1.8 trillion
in APBNP 2012. The realization of expenditure budget of this agency is particularly to support:
(1) national cryptogram development program; and (2) support program for the
management and implementation of other technical tasks of the National Cryptogram
Agency.
In 2011, output produced from these varying programs include: (1) signal analysis of five
activities; (2) cryptogram communication network infrastructure in 24 points; (3) 38
university graduates (sarjana) majoring in applied technology; and (4) administrative services
in public relation of 3 activities.
Outcome produced from the allocation of expenditure budget for the National Cryptogram
Agency include: (1) cryptogram carried out consistent with national policies; (2) support to
classified communication; and (4) office administrative service of National Cryptogram
Agency in accountable manner.
4-32
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
The Ministry of Youth and Sports
Budget allocation for the Ministry of Youth and Sports during 2007 – 2012 is to rise by 44.7
percent per annum from Rp.641.2 billion in LKPP 2007 to Rp.1.8 trillion in APBNP 2012.
The realization of such expenditure budget for the Ministry of Youth and Sports is mainly
allocated for: (1) support program for the management and implementation of other technical
tasks of the Ministry of Youth and Sports; (2) infrastructure and facility improvement program
for the officials of the Ministry of Youth and Sports; (3) youth and sport development program;
and (4) competition sport development program.
In 211, the output produced from these programs are: (1) 48 publications and
documentations; (2) the development/rehabilitation of sport facility and infrastructure, 5,978
m2; (3) number of youth facilitated as enterpreneurs reaching 11,072 persons; and (4)
facilitation to 350 coaches of competition sport branches.
The outcome of expenditure budget allocated to the Ministry of Youth and Sport during the
said period include: (1) financial and personnel planning, supervision and administration
and public service quality within the Ministry of Youth and Sports enhanced, (2) facility and
infrastructure management quality improved; (3) participation and active roles of youths
in various development sectors increased; and (4) participation of community in sports and
their achievements both at regional and international level elevated.
Demography and National Family Planning Agency (BKKBN)
Expenditude budget for the Demography and National Family Planning Agency (BKKBN)
in 2007 – 2012 records an increase of 25.6 percent per annum, i.e. from Rp.994.2 billion in
LKPP 2007 to Rp.2.1 trillion in APBNP 2012.
The realization of expenditure budget for BKKBN during such period is to support: (1)
demography and famility planning program; (2) BKKBN training and development program;
(3) BKKBN official accountability supervision and development program; and (4)
management and implementation support program for other technical tasks of BKKBN.
In 2011, output produced from such various programs are: (1) family planning services
delivered; (2) advocacy and family planning services intensified; (3) family resilience
improvement and empowerment; (4) competency of human resources engaged in family
planning fortified; (5) general supervision and administration; and (6) program management
supports.
Outcome of expenditure budget allocation to BKKBN include: (1) proportional population
growth in 2015 evident from the lower population growth rate and birth rate, higher family
planning participation rate, and lower un-fulfilled family planning requirement rate; (2)
quality in the implementation of human resources training and researches on demographic
and family planning program enhanced; (3) accountability in program, personnel and general,
financial and logistic administraion management (good governance) improved; (4)
management supports for demographic and family program implementation.
Attorney General Office of Republic of Indonesia (Kejaksaan RI)
Expenditure budget for the Attorney General Office of Republic of Indonesia (Kejaksaan
RI) in 2007 to 2012 records an increase of 19.8 percent per annum, i.e. from Rp.1.6 trillion in
LKPP 2007 to Rp.3.8 trillion in APBNP 2012. Accordingly the realized absoprtion of
expenditure budget to Kejaksaan RI in the said period is also to rise by 101.2 percent of
APBNP 2007 to 116.4 percent of its ceiling in APBNP 2011.
Financial Notes and Indonesian Budget 2013
4-33
Chapter IV
Central Government Expenditure
Budget realization of Kejaksaan RI’s expenditures is mostly to support: (1) supervision and
accountability improvement program to the officials of Kejaksaan RI; (2) intelligent case
investigation/safeguarding/mobilization program; (3) general criminal case management
and settlement program; and (4) special criminal case management and settlement program,
including grave human right violation and corruption crimes.
In 2011, output produced from these programs are: (1) public complaints in intelligent
operation dealt with; (2) intelligent reports of ideology, social, politic, security defense and
public laws and orders; (3) general criminal cases settled in accussation proceedings in General
Attorney; and (4) grave human right violation case settled in investigation proceedings.
Outcome of budget allocation for Kejaksanaan RI’s expenditures in the said period are:
(1) quality in the supervision against routine and development task implementation by all
elements within the attorney general office according to the applicable laws and policies
established by the General Attorney enhanced; (2) quality in the implementation of judicial
intelligent activities in social, political, economic, financial, defense-security and public laws
and orders sectors enhanced; (3) quality in pre-accusation, additional investiation, judge
determination and court decisions, supervision to conditional aquittal decision and other
legal actions in general criminal cases enhanced; and (4) quality in pre-accusation, additional
investigation, judge determination and court decisions, supervision to conditional aquittal
decision and other legal actions in economic crimes enhanced.
4.2.3.The Trends of Budget Implementation for Central
Government Expenditures by Types
Pursuant to Article 11 paragraph (5) Law Number 17 of 2003 concerning State Finance, the
breakdowns of Central Government Expenditures by Types comprise: (1) personnel
expenditure; (2) material expenditure; (3) capital expenditure; and (4) loan interest payment;
(5) subsidy; (6) grant expenditure; (7) social aids; and (8) other expenditure.
In nominal terms, the expenditure of Central Government in 2007 – 2012 shows upward
trend, i.e. from Rp.504.6 trillion (12.8 percent of GDP) in 2007 to Rp.1,069.5 trillion (12.5
percent of GDP) in APBNP 2012.
Reviewed from its composition by type,
GRAPH 4.25
CENTRAL GOVERNMENT EXPENDITURE TREND BY TYPES ,2007-2012
spendings record significant increase are
that of material expenditure and capital
expenditure. The proportion of material
expenditure to total Central Government
expenditures is to rise from 10.8 percent
in 2007 to 15.1 percent in APBNP 2012.
Meanwhile, the proportion of capital
expenditure to total Central Government
Expenditures increases from 12.7
percent in 2007 to 16.5 percent in
APBNP 2012. The trend of Central
Government Expenditures by Types can
be seen in Table 4.2 and Graph 4.25.
trillion rupiah
%
1200
1000
14,0
16,0
14,0
12,8
11,2
800
11,9
11,9
12,5
10,8
12,0
10,0
600
8,0
6,0
400
4,0
200
2,0
0
-
LKPP
LKPP
2007
2008
Personnel
Subsidy
Additional Budget
LKPP
LKPP
2009
2010
Material
Grant
% GDP
LKPP
2011
Capital
Social Aids
APBN
APBN-P
2012
Loan Interest Payment
Other Expenditure
Source : the Ministry of Finance
Personnel Expenditure
In 2007 – 2012 period, the budget realization of personnel expenditure in nominal wise has
increased 18.6 percent per annum on the average, i.e. from Rp.90.4 trillion (2.3 percent of
GDP) in 2007 to Rp.212.3 trillion (2.5 percent of GDP) in 2012. Likewise, the proportion of
4-34
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
TABLE 4.2
CENTRAL GOVERNMENT EXPENDITURE TREND, 2007 - 2012
(trillion rupiah)
2007
No.
Description
2008
2009
2010
2011
LKPP
% to
GDP
LKPP
% to
GDP
LKPP
% to
GDP
LKPP
% to
GDP
2012
LKPP
% to
GDP
APBN
% to
GDP
% to
GDP
APBNP
1.
Personnel Expenditure
90,4
2,3
112,8
2,3
127,7
2,4
148,1
2,3
175,7
2,4
215,9
2,7
212,3
2,5
2.
Material Expenditure
54,5
1,4
56,0
1,1
80,7
1,4
97,6
1,5
124,6
1,7
188,0
2,3
186,6
2,2
2,0
3.
Capital Expenditure
64,3
1,6
72,8
1,5
75,9
1,4
80,3
1,2
117,9
1,6
152,0
1,9
168,7
4.
Loan Interest Payment
79,8
2,0
88,4
1,8
93,8
1,7
88,4
1,4
93,3
1,3
122,2
1,5
117,8
1,4
5.
Subsidy
150,2
3,8
275,3
5,6
138,1
2,5
192,7
3,0
295,4
4,0
208,9
2,6
245,1
2,9
6.
Grant Expenditure
-
-
-
-
-
-
0,1
0,0
0,3
0,0
1,8
0,0
1,8
0,0
7.
Social Aids
49,8
1,3
57,7
1,2
73,8
1,3
68,6
1,1
71,1
1,0
47,8
0,6
55,4
0,6
8.
Other Expenditure
15,6
0,4
30,3
0,6
38,9
0,7
21,7
0,3
5,5
0,1
28,5
0,4
68,5
0,8
9.
Additional Budget
Total
-
-
-
-
-
-
-
-
-
-
-
-
13,5
0,2
504,6
12,8
693,4
14,0
628,8
11,2
697,4
10,8
883,7
11,9
965,0
11,9
1.069,5
12,5
Souce: the Ministry of Finance
personnel expenditure to total government expenditures is also to rise from 11.9 percent in
2007 to 13.7 percent in 2012. Meanwhile, the budget absorption performance of personnel
expenditure to APBNP in 2007-2012 is always higher than 90 percent, i.e. 97.4 percent in
2007 and 96.1 percent in 2011. In 2012 this budget absorption performance is expected to
reach 96.2 percent of the ceiling set in APBN 2012. The majority of such personnel spending
realization is to pay salaries and allowances and honorarium, vacation, overtime (around
66.1 percent) with the remaining (some 33.9 percent) for social contribution, i.e. health
insurance premium and pension benefits. Illustration on the trend of personnel spending
trend in the said period is presented in Graph 4.26.
The increase of allocation and
realization of personnel expenditure in
such period is due to policy measures
taken by the Government to rise the
salaries and prosperity of public
servants (PNS), members of TNI/Polri
and the retired persons. The said policies
are: (1) the rise of basic salaries for PNS
and TNI/Polri on periodic basis; (2) the
payment of the 13th salary; (3) rise in
functional and structural allowances;
(4) rise in meal allowance for members
of TNI/Polri; (5) meal allowance for
PNS starting from 2007; and (6) rise
of basic pension and the payment of the
13th pension. In addition, the increase
of personnel expenditure is due to the
provision of remuneration for
bureaucracy reform since 2007, which
is then expanded its implementation.
Bureaucracy reform, which is originally
covered 3 (three) K/L in 2007 is
expected to embrace around 50 K/L in
2012. Illustration on personnel
expenditure policies is presented in
Table 4.3.
With personnel expenditure policies
taken during the said period, the income
Financial Notes and Indonesian Budget 2013
GRAPH 4.26
PERSONNEL EXPENDITURE TREND ,
2007-2012
trillion Rp
250,0
215,9
200,0
175,5
127,7
150,0
148,1
112,8
90,4
100,0
50,0
0,0
2007
2008
2009
2010
social contribution
28,5
37,3
48,5
52,8
61,8
honorarium & vacation
11,5
7,8
8,5
14,3
2011
22,5
2012
41,8
salary & allowance
50,3
67,8
70,7
81,0
91,5
101,3
69,2
Source: the Ministry of Finance
GRAPH 4.27
TAKE HOME PAY TREND OF THE LOWEST RANK OF
PUBLIC CIVIL SERVANTS , 2007-2012
in rupiah
3.000.000
2.500.000
2.000.000
1.500.000
1.000.000
500.000
0
2007
1.285.40
2008
1.569.30
2009
1.721.40
Te ache r (Gol. IIa unmmarie d) 1.784.00
2.111.90
2.306.00 2.496.10 2.650.40 2.993.05
PNS (Rank. Ia unmarrie d )
2010
2011
2012
1.895.70 2.009.00 2.256.10
TNI/Polri (Tamtama/Bintara) 1.843.40 2.158.80 2.296.60 2.505.70
2.631.05
2.912.20
Source : the Ministry of Finance
4-35
Chapter IV
Central Government Expenditure
and prosperity of state officials are increasing as reflected with the rise of real take home pay
(equivalent to the volume of rice affordable to buy). The Take Home Pay for PNS officials of
the lowest rank (rank I/a unmarried) is to surge up from Rp.1,285,400 in 2007 to
Rp.2,256,100 in 2012 (equivalent to 455 kg rice). Special for the teachers, the take home pay
of teachers at the lowest rank (II/a unmarried) is to rise from Rp.1,784,000 in 2007
(equivalent to 314 kg of rice) to Rp.2,993,000 in 2012 (equivalent to 603 kg of rice). As to
members of TNI/Polri, the lowest rank soldiers (Tamtama/Bintara) have take home pay
Rp.2,912,200 in 2012 (equivalent to 587 kg of rice), which increases from Rp.1,843,400 in
2007 (equivalent to 412 kg of rice). The trend of take home pay for state officials from 20072012 can be seen in Graph 4.27.
TABLE 4.3
PERSONNEL EXPENDITURE POLICY TREND, 2007 - 2012
Description
2007
1.Policy of the 13th Salary Payment
2008
1 x gaji Juni 1 x gaji Juni
2.
Basic Salary and Basic Pension Increase
3.
Average Structural Allowance Increase
- Echelon I
- Echelon II
- Echelon III
- Echelon IV
- Echelon V
4.
Average Functional Allowance Increase
6.
Meal Allowance
Meal Allowance for Armed Forces/Police
- Meal Allowance for Armed Forces/Police
Meal Allowance for Public Servants
- Meal Allowance for Public Servants
4.
Addition Personnel for Central Government
- Period (month)
8.
Renumeration Implementation Trend
2009
2010
2011
1 x gaji Juni
1 x gaji Juni
2012
1 x gaji Juni 1 x gaji Juni
15%
40%
23,6%
32,5%
42,5%
52,5%
60,0%
20%
20%
-
15%
-
5%
-
10%
-
10%
-
30.000
35.000
35.000
40.000
40.000
45.000
10.000
50.000
15.000
75.000
15.000
100.000
3 K/L
-
2 K/L
20.000
100.000
5
9 K/L
20.000
40.323
9
2 K/L
25.000
38.174
5
51 K/L
Source: the Ministry of Finance
Material Expenditure
Material expenditure is spending for the purchase of consumable goods and/or services to
produce goods and/or services either marketable or not and the procurement of goods intended
to be delivered or sold to the communities/regional governments beyond the criteria of social
aids and travel spendings. Material expenditure consists of: (1) operational goods; (2) nonoperational goods; (3) goods for Public Service Agency (BLU); and (4) goods for delivery to
the communities.
4-36
200
GRAPH 4.28
MATERIAL EXPENDITURE
TREND, , 2007-2012
160
trillion rupiah
In 2007-2012, the realization of
budget for material expenditure is to
rise by 24.3 percent per annum on the
average, i.e. from Rp.54.5 trillion in
2007 to Rp.146.5 trillion in 2012. The
absorption performance of material
expenditure during the same period is
also to increase from 83.5 percent of
APBNP 2007 to 90.4 percent of its
ceiling in 2012. Meanwhile, the trend
of material expenditure proportion to
total Central Government Expenditure
is to surge from 10.8 percent in 2007
to 13.9 percent in 2012.
120
80
40
0
2007
2008
2007
APBN-P
2008
65,260429 67,476166
Realisasi 54,511365
55,96347
2009
2010
2011
2012
2009
2010
2011
2012
85,464
112,594
142,8259
162,01230
80,667925 97,596838 124,63948
146,5
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
The increasingly realization of material expenditure budget in such period is consistent with
more tasks and functions of governance that must be performed, such as: (1) new working
units requiring more assets and inventory goods for which operational maintenance will be
necessary; (2) more infrastructure and facilities to support the increasingly administrative
tasks in various institutions, including the allocation of operational spendings for such new
working units; and (3) the rise of goods and service prices significantly affecting the
maintenance costs and duty travel costs. Some policies of material expenditure allocation
that have been taken are: (1) improved efficiency and effectiveness of material expenditure
allocation and utilization for K/L, especially for duty travel spendings; (2) well-advanced
operational governance activities, services to public and asset maintenance; and (3) capacity
building for the personnel and preparation/evaluation for bureaucracy reform. The trend of
material expenditure budget realization is presented in Graph 4.28.
Capital Expenditure
Capital expenditure is spending for the payment of acquiring assets and/or added value to
other fixed assets that will generate benefits more than one accounting period and exceeding
the minimum threshold of fixed assets/other assets capitalization as established by the
Government. The said fixed assets/other assets are used to support the day-to-day operation
of a working unit or used by the communities/public, and recorded as the assets of the K/L
concerned and not for sold/transferred to the public/regional government. Capital expenditure
consists of: (1) land capital; (2) equipment and machines; (3) office and building; (4) roads,
irigation and networks; (5) other capitals; (6) added value generation to fixed assets/other
assets; and (7) Public Service Agency (BLU).
In 2007 – 2012 the realization of capital expenditure in nominal wise has recorded average
increase of 21.3 percent per annum, i.e. from Rp.64.3 trillion in 2007 to Rp.176.1 trillion in
APBNP 2012. If compared with with total Central Government Expenditure, realization of
such capital expenditure in 2007 reaches 12.7 percent and expected to increase in 2012 at
15.1 percent. This higher capital expenditure realization during such period is consistent with
the Government’s policies of increasing investment spendings to stimulate economic growth.
Such huge capital expenditure budget allocation is also to reflect serious attention of the
Government on infrastructure development. Apart from improving public access to basic
services, this higher allocation for capital expenditure aims to support and promote economic
growth, minimize inflation and improve goods distribution.
In 2007 – 2012, most of capital expenditure are allocated to several K/L for infrastructure
development. They include: (1) the Ministry of Public Works, (2) the Ministry of
Transportation; (3) the Ministry of Defense; (4) the Ministry of Energy and Mineral Resources;
and (5) the Ministry of Education and Culture. Budget realization for capital expenditure to
these 5 K/Ls during the said period has
GRAPH 4.29
been expended to perform a wide
CAPITAL EXPENDITURE TREND, 2007-2012
variety of programs, such as: (1)
defense development program; (2)
electricity facility and infrastructure
quality improvement program; (3)
railways facility and infrastructure
improvement and development
program;
(4)
sea
transport
development
program;
(5) air transport development
program; (6) higher education Source: the Ministry of Finance
development program; (7) river, lake
trillion Rp
180,0
160,0
140,0
120,0
100,0
80,0
60,0
40,0
20,0
-
Financial Notes and Indonesian Budget 2013
APBN-P
2007
75,1
2008
79,1
2009
73,4
2010
95,0
2011
141,0
2012
176,1
LKPP
64,3
72,8
75,9
80,3
117,9
159,1
4-37
Chapter IV
Central Government Expenditure
and other water resources management and conservation program; (8) irigation network,
swamp and other water networks development and management program; (9) road and
bridge rehabilitation/maintenance program; (10) road and bridge improvement/development
program; (11) flood control and coast safeguarding program; and (12) drinking water and
wastewater management performance development program. In line with great attention
of the Government on the importance of infrastructure, which its provision was severely
hampered during economic crisis in 1998, the Government is now attempting to add the
volume of capital expenditure for the last few years. Illustration on the trend of capital
expenditure realization from 2007 to 2012 is presented in Graph 4.29.
Payment of Loan Interest
The enormous financing requirements from loans, which tend to increase from year to year
will affect the budget allocation for the payment of loan interest. During 2007 – 2012 its
expenditure records steady increase in terms of nominal, i.e. 8.1 percent per annum on the
average, from Rp. 79.8 trillion (2.0 percent of GDP) in 2007 to Rp.117.8 trillion (1.4 percent
of GDP) in APBNP 2012. However, with more efficient Government loan management and
favorable domestic economic conditions the debt ratio to total government expenditure shows
downward trend. In 2007 the portion of loan interest reached 10.5 of total Government
expenditure. This ratio is further decreasing and expected to record 7.6 percent in 2012. (See
Table 4.4).
TABLE 4.4
LOAN INTEREST EXPENDITURE TREND, 2007 - 2012
(trillion rupiah)
Description
Loan Interest Payment
i. Domestic Loans
ii. Foreign Loans
% to Outstanding
Outstanding
% to Government Expenditure
Loan Interest Payment
i. Domestic Loans
ii. Foreign Loans
% to GDP
Loan Interest Payment
i. Domestic Loans
ii. Foreign Loans
Assumption and Parameter
Avg. Exchange Rate (Rp/US$)
Avg. 3-Month SBI rate (%)
Loan Financing (Netto)
i. SBN Issuance (netto)
ii. Domestic Loan Drawing (netto)
iii. Foreign Loan Drawing (netto)
2007
2008
2009
2010
2011
2012
APBN
APBNP
79,8
54,1
25,7
88,4
59,9
28,5
93,8
63,8
30,0
88,4
61,5
26,9
93,3
66,8
26,4
122,2
88,5
33,7
117,8
84,7
33,0
5,7
1.389,4
5,4
1636,7
5,9
1.590,4
5,3
1.676,9
5,2
1.803,5
6,2
1.962,0
5,9
1.984,3
10,5
7,1
3,4
9,0
6,1
2,9
10,0
6,8
3,2
8,5
5,9
2,6
7,2
5,2
2,0
8,5
6,2
2,3
7,6
5,5
2,1
2,0
1,4
0,7
1,8
1,2
0,6
1,7
1,1
0,5
1,4
1,0
0,4
1,3
0,9
0,4
1,5
1,1
0,4
1,4
1,0
0,4
9.140,0
8,0
9.691,0
9,3
10.407,0
7,6
9.087,0
6,6
8.779,0
4,8
8.800,0
6,0
9.000,0
5,0
30,6
57,2
(26,6)
67,5
85,9
(18,4)
84,0
99,5
(15,5)
86,5
91,1
(4,6)
102,7
119,9
0,6
(17,8)
133,6
134,6
0,9
(1,9)
156,2
159,6
1,0
(4,4)
Source: the Ministry of Finance
In line with the Government’s policy to give more priority for loans coming from domestic
financial markets, the payment of domestic loan interest will increase accordingly. This interest
payment for domestic loans in 2007 amounted Rp.54.1 trillion (67.8 percent of total loan
interest) and to rise by Rp.30.7 trillion or in total Rp.84.7 trillion (72.0 percent of total loan
interest) in 2012. In addition, during the same period, the average payment of domestic loan
interest reached 69.4 percent to total loan interest payment. The majority of such loan interest
payment is to pay the interest of domestic SBN (Government Bonds). In 2011, with the
withdraw of domestic loans, the payment of domestic loan interest also includes the payment
of interest of domestic loans. However, the proportion of domestic loan interest payment is
relatively lower than allocation for the payment of interest of domestic SBN.
Budget allocation for the payment of Domestic SBN interest is generally for the payment of
interest component and noncash item component covering discount of SBN issuance, costs
4-38
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
for SBN issuance and loss on bonds
GRAPH 4.30
WEIGHT AVERAGE YIELD TREND OF 3-MONTH SPN BIDS , 2011-2012
redemption
when
the
Government conducted debt 6,0
switch or buyback. The interest of
5,0
SBN
consists
of
several
components, among other, 4,0
interest for the issued SBN, 3,0
issuance discount and costs. SBN 2,0
issuance discount and costs are 1,0
non-cast items as compensation 0,0
Mei-11
Jul-11
Sep-11
Nop-11
Jan-12
Mar-12
Mei-12
charged to the interest in order Mar-11
Source:the Ministry of Finance
that the values of SBN issuance
remain unchanged in nominal wise. The rate of SBN interest is subject to outstanding SBN,
number of bonds issued during the current year, the proceeds of 3-month SPN auction, yield
earned on SBN issuance, and rupiah exchange rate to foreign currencies.
Variables affecting the payment of loan interest show bolstering trend. Yield of 3-Month
SPN as interest reference for SBN Series VR as indicated in Graph 4.30 that follows is
relatively stable. This stable yield of 3-Month SPN is due to the relatively controllable inflation
expectation during 2011 – 2012, favorable domestic economic conditions, and SPN issuance
in measurable manner in view of demands and costs of its issuance. Through June 2012,
auction of 3-Month SPN has been made 9 times with weighted average yield (WAY) of 2.7
percent.
Meanwhile, the rupiah exchange rate to USD during 2007 – 2012 is relatively fluctuating.
In 2007, the average exchange rate of rupiah to USD ranged at Rp.9,140.0 per USD, and
strengthened at Rp.8,779.0 per USD in 2011. Likewise in 2012, the rupiah exchange rate to
USD is expected at Rp.9,250.0 range per USD. The trend of domestic SBN yield during 2007
– 2012 is predicted to drop consistent with the bolstering economic conditions and domestic
security.
Interest of foreign loans consists of interest for the withdrawn foreign loans, and loan fees
such as commitment fee, front end fee, insurance premium, etc. The rate of foreign loans
are mainly subject to outstanding foreign loans, the amount of foreign loans withdrawn
during current year, reference interest rate (Libor, Euribor, Sibor), and rupiah exchange
rate to foreign currencies. During 2007 – 2012, the payment for foreign loan interest is
usually lower than that of for domestic loans. It is consistent with the policy taken by the
Government to abate dependency on foreign loans by prioritizing loan financing from domestic
SBN. Financing with foreign sources now records negative (the widthraw of foreign loans
smaller than the payment of
GRAPH .31
foreign loan principal). Meanwhile
AMORTIZATION COMPOSITION TREND, 2007-2012
International SBN will be issued as
(trillion Rupiah)
complementary to domestic SBN
while caustiously taking costs and
risks under consideration.
140
120
100
80
The trend of realized payment for
foreign loan interest records
average increase of 5.1 percent per
annum in nominal term, i.e. from
Rp.25.7 trillion (0.7 percent of
GDP in 2007 to Rp.26.4 trillion
(0.4 percent of GDP) in 2011, and
expected to reach Rp.33.0 trillion
60
40
20
0
APBN
2007
2008
2009
2010
Domestic loans
2011
APBNP
2012
Foreign loans
Source: the Ministry of Finance
Financial Notes and Indonesian Budget 2013
4-39
Chapter IV
Central Government Expenditure
(0.4 percent of GDP) in 2012. The contributing factors for the increase of such realization of
foreign loan interest payment in such period are attributed to higher outstanding international
SBN and the effect of rupiah exchange rate. The outstanding international SBN as of the end
of 2007 was USD5.5 billion, that increased to USD20.4 billion and JPY95 billion by end of
2011. The Trend of overall loan interest is presented in Graph 4.31.
Subsidy
trillion Rp
% to GDP
Subsidy is budget allocation channelled through companies/institutions producing, selling
goods and services crucial for the life of people and as such their prices must be maintained
at affordable rates. Subsidy expenditure consists of energy subsidy (fuel subsidy, 3-kg LPG
and LGV and electricity subsidy) and non – energy subsidy (food subsidy, fertilizer subsidy,
PSO subsidy, program credit interest subsidy, and tax subsidy /tax charged to the Government
(DTP). While budget allocation for subsidy by the Government for the last few years shows
a relatively significant increase, such subsidy budget allocation must subject to the financial
capacity of the Government. During 2007 – 2012, the realization of subsidy budget is to
fluctuate, and in nominal terms it increases to Rp.94.9 trillion or 10.3 percent per annum on
the average. This high rise is due to: (1) changing subsidy paramters, such as Indonesian
Crude Price (ICP), rupiah exchange
GRAPH 4.32
rate to USD, volume of subsidized fuel,
SUBSIDY TREND, 2007-2012
quantum of rice for the poor (raskin),
350,0
6,0
number of target households (RTS),
300,0
5,0
volumes of subsidized fertilizer and
250,0
4,0
seed; and (2) various Government
200,0
3,0
policies such as domestic fuel price and
150,0
2,0
100,0
electricity rate setting and policy to
1,0
50,0
support 10 million tons rice surplus
program by 2014. The trend of subsidy
2007
2008
2009
2010
2011
2012
APBNP
expenditure realization in 2007-2012 is
Subsidy
% to GDP
presented in Graph 4.32.
Source: the Ministry of Finance
Energy Subsidy
Energy subsidy is budget allocation channelled through companies/institutions providing
and distributing fuel of certain type (oil and biofuel), 3-kg liquefied petroleum gas (LPG)
and liquefied gas for vehicle (LGV) and electrical power to be affordable by the majority of
people. The realization of subsidy expenditure budget in 2007 – 2012 in nominal wise records
increase of Rp.85.5 trillion or 11.6 percent per annum on the average, i,e, from Rp116.9
trillion (3.0 percent of GDP) in 2007 and expected to reach Rp.202.4 trillion (2.4 percent of
GDP) in 2012.
This significant rise in energy subsidy during the said period is attributed to: (1) changing
energy subsidy parameter, including ICP, rupiah exchange rate to USD, volume of subsidized
fuel consumption, energy mix of electrical power generation and selling; and (2) policy of
subsidized fuel and electrical power price setting.
Subsidy for fuel, 3-kg LPB and LGV is granted to control the selling price of subsidized fuel as
a basic need of people. With such subsidy it is expected that the fuel is affordable at the
purchasing power of people, especially low-income people. It is because the domestic market
(economic) price of fuel is considerably subject to various external factors, including crude
oil price at global markets and rupiah exchange rate to USD. At present, fuel subsidy is given
for several certain type of duel (kerosene, gas oil and premium). In addition, the Government
extends subsidy for 3-kg LPG and LGV to promote the non fuel energy consumption.
4-40
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
In 2007-2012, the realization of subsidy budget for fuel, and 3-kg LPS records an increase of
Rp.53.6 trillion in nominal terms or 10.4 percent per annum, i.e. from Rp.83.8 trillion (2.1
percent of GDP) in 2007 to Rp.137.4 trillion (1.6 percent of GDP) in 2012. (see Table 4.5).
In the realization prediction, subsidy for fuel and 3-kg LPG and LGV is expected to amount
Rp.216.8 trillion. The trend of budget realization for subsidy expenditure during the said
period is subject to the trend of ICP when in 2007 – 2012 it increases USD32.7 per barrel
(50.7 percent), i.e. from USD72.3 per barrel in 2007 to USD105.0 per barrel in 2012. In
addition, increase in fuel subsidy expenditure is also dependent on volume of subsidized fuel
consumption. In 2012, the realization of subsidized fuel consumption volume is expected to
reach 40.0 million kiloliter, or to rise by 1.3 million kiloliter if compared with the realized
volume of subsidized fuel consumption in 2007 recording 38.7 kiloliter. The rise of this fuel
consumption volume is particularly due to increasingly motor vehicle population.
TABLE 4.5
THE TREND OF SUBSIDIES FOR CERTAIN FUEL AND 3-KG GAS , 2007 - 2012
Description
Fuel Subsidy (trillion rupiah
% to GDP
2007
2008
2009
2010
2011
2012
APBNP
83,8
2,1
139,1
3,0
45,0
0,8
82,4
1,3
165,2
2,2
137,4
1,6
72,3
9.140,0
38.665,4
17.929,8
9.851,8
10.883,7
14,1%
97,0
9.250,0
38.938,0
18.780,0
8.469,1
11.688,9
506,4
9,0%
61,6
10.408,0
37.011,1
20.876,5
4.784,2
11.350,4
1.774,7
8%-536,9 *)
79,4
9.041,3
38.221,8
23.040,2
2.350,6
12.831,0
2.693,7
556,0
109,9
8.732,0
40.331,4
24.538,2
1.694,8
14.098,4
3.256,0
595,5
105,0
9.000,0
40.000,0
24.411,3
1.700,0
13.888,7
3.606,1
613,9
Assumption and Parameter
-
-
ICP Jan-Des (US$/barrel)
Rupiah Exchange Rate (Rp/UD$)
Fuel Volume (thousand kiloliter)
> Premium
> Kerosene (Kerosene)
> Solar
LPG (thousand kiloliter)
Alpha (Rp/liter)
* ) APBN 2009: 8% to MOPS, APBNP 2009 Rp536,9 per liter
The change is to anticipate ICP fluctuation that will affect fuel MOPS and alpha
Source: the Ministry of Finance (processed)
With such upward fuel subsidy trend, it is necessary to control this kine of subsidy so as to
abate its burden to APBN. In light of that, during 2007 – 2012 the Government has taken
some policy measures, such as: (1) to convert the consumption of subsidized kerosene to 3kg LPG in phases starting from 2007; (2) to encourage the consumption of alternative energy
and energy diversification; (3) to limit the users of subsidized fuel with closed distribution
mechanism in phases and to revise regulation. In addition, other policies introduced by the
Government in curbing the burdens of fuel subsidy are to rise the retail price of subsidized
fuel.
However, increasing the retail price of subsidized fuel will be the last option of the Government,
i.e. when this fuel subsidy exerts unbearable burdens to APBN that will compromise fiscal
sustainability either in short-term or medium-term. In 2007 – 2012, the Government has
increased fuel price 4 (four) times, i.e. in May 2008, early December 2008, mid of December
2008 and January 2009. In May 2008, the price of subsidized fuel was increased by 28.7
percent on the average as a result of increasing ICP, which in Jan-May 2008 reached
USD104.8 per barrel on the average, or USD44.8 per barrel higher than its assumption in
APBN 2008 set USD60.0 per barrel. Meanwhile, with the declining ICP until USD38.5 per
barrel, from December 2008 to January 2009, the price of subsidized fuel was decreased
three times by respectively 8.3 percent in early December 2008, 10.9 percent in the mid of
December 2008, and 8.1 percent in January 2009 (see Table 4.6).
Meanwhile, budget for electricity subsidy is granted to make the selling price of electricity
affordable by customers at certain tariff class. Electricity subsidy is allocated because the
average selling price of electricity is lower than its production cost (BPP) of the said tariff
class. The allocation of electricity subsidy budget is expected capable of securing facility and
Financial Notes and Indonesian Budget 2013
4-41
Chapter IV
Central Government Expenditure
TABLE 4.6
THE TREND OF RETAIL PRICE OF SUBDISY PRICE, 2006 - 2012
(Rupiah/Liter)
1 Jan 2006 - 23
May 2008
24 May - 30
Nov 2008
1 Dec - 14 Dec
2008
15 Dec 2008 14 Jan 2009
15 Jan 2009 Present
1. Premium
4.500
6.000
5.500
5.000
4.500
2. Solar
4.300
5.500
5.500
4.800
4.500
3. Kerosene
2.000
2.500
2.500
2.500
2.500
Description
Source: ESDM Ministry
infrastructure investments and rehabilitation programs in power generation sector. To lessen
the burdens of the increasingly electricity subsidy, the Government and PT PLN (Persero)
attempt to decrease BPP (power production cost) of electricity with: (1) network lossess
reduction program; and (2) diversification of primary energy in power generation by
optimizing the consumption of gas, geothermal, coal, biodiesel and the replacement of high
speed diesel (HSD) with marine fuel oil (MFO), promoting the consumption of coals, biofuel
and geothermal. Apart from improvement in demand and supply sides, the Government
also makes restructuring in PT PLN (Persero). To prevent PT PLN (Persero) from suffering
liquidity and funding shortages, the Government gives business margin. The latter is an
attempt to boost the financial conditions of PT PLN to be more bankable, which will be
evident from indicator of consolidated interest coverage ratio (CICR) above two percent.
This more than two percent CICR is required by PT PLN (Persero) to comply with
requirements for global bond issuance in international market. Funding coming from bonds
(loans) in international market is necessary for the development of power generation as
important factor in assuring power supply and sales growth to deal with the ever-increasing
demands on electrical power.
TABLE 4.7
ELECTRICITY SUBSIDY TREND, 2007 - 2012
No
PARAMETER
1
ICP (US$/bbl)
2
Exchange Rate (Rp/US$)
3
TTL (%)
4
Growth Sales (%)
Energy sales (TWh)
5
Losses (%)
6
Fuel Mix
- High Speed Diesel/HSD (million KL)
- IDO (million KL)
- Marine Fuel Oil/MFO (million KL)
- Coal (million ton)
2008
2009
2010
2012
APBNP
2011
78,0
96,8
61,5
79,4
111,5
105,0
9.419,0
10.950,0
10.408,0
9.087,0
8.776,0
9.000,0
-
-
-
10
-
-
5,7
3,8
4,3
9,4
4,1
7,0
119,0
124,3
134,9
145,7
151,7
167,2
11,11
10,45
9,96
9,74
9,44
8,5
5,5
7,9
8,1
6,3
6,9
8,0
0,01
0,03
0,01
0,01
0,01
-
2,8
3,2
3,3
2,43
2,5
1,7
21,5
21,0
21,6
23,96
29,1
38,1
- Gas (million BBTU)
0,2
0,2
0,3
0,28
0,3
0,3
- Geohermal (TWh)
3,2
3,4
3,5
3,40
3,4
3,4
-
-
-
-
-
0,01
- Bio Diesel (million KL)
7
2007
Margin (%)
Subsidy of the Year (Miliar Rp)
Underpayment of previous year (miliar Rp)
Subsidy (accrued and cash) (Miliar Rp)
Carry over to coming years
TOTAL SUBSIDY(Miliar Rp)
-
-
5%
8%
8%
7%
33.073,5
80.395,6
45.139,3
53.601,6
92.867,0
60.466,6
-
3.510,9
4.407,1
4.000,0
4.580,5
4.506,8
33.073,5
83.906,5
49.546,5
57.601,6
97.447,5
64.973,4
-
-
-
33.073,5
83.906,5
49.546,5
57.601,6
(7.000,0)
90.447,5
64.973,4
Source: the Ministry of Finance
4-42
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
During 2007-2012, the realization of electricity subsidy expenditure in nominal terms shows
increase of Rp.31.9 trillion or 14.5 percent per annum on the average, i.e. from Rp.33.1
trillion (0.8 percent of GDP) in 2007 and Rp.65.0 trillion (0.8 percent of GDP) in 2012. The
realization of electricity subdidy expenditure in 2012 is expected to hit Rp.89.1 trillion. This
higher electricity subsidy realization during such period is due to: (1) higher power generation
costs (BPP) as a result of dominant fuel consumption in national power generation system;
(2) fluctuating exchange rate and ICP; and (3) increasingly power sales hitting 167.2 tera
watt hour (Twh) in 2012 if compared with power sales in 200 recording 119.0 TWh (see
Table 4.7.).
GRAPH 4.33
BPP AND POWER SOLD TREND , 2007-2012
1400
180
1200
150
Rp/Kwh
1000
120
800
90
600
60
400
Tera Watt Hours
To control electricity subsidy, the
Government along with House of
Representatives (DPR-RI) agree
to cut electricity subsidy in phases
without necessarily sacrifying
low-income households. In this
respect, the Government has
increased electrical rate (TTL) by
10 percent on the average since
July 2010. Nonetheless, the
Government remains pro to the
low – income people, i.e. not to
rise the electrical rate for the
customers of 450 watt and 900
watt (see Graph 4.33).
30
200
0
0
2007
2008
2009
Power sold (Twh)
2010
2011
2012
Avg. BPP (Rp/Kwh)
Source: PT PLN
Non – Energy Subsidy
Non – energy subsidy is budget allocation to companies/institutions producing and/or selling
particular goods and/or services established by the Government other than certain type of
fuel, 3-kg LPG, LGV and electricity to be affordable for low-income people. In nominal
terms, during 2007-2012 this non-subsidy allocation is to rise by Rp.9.4 trillion or 5.1 percent
per annum on the average, i.e. from Rp.33.3 trillion (0.8 percent of GDP) in 2007 and expected
to record Rp.42.7 trillion (0.5 percent of GDP) in 2012 (see Graph 4.34). Such non-energy
subsidy realization during the said period is attributed to: (1) changing subsidy parameters,
i.e. volumes of subsidized fertilizer and seeds, number of target households (RTS) and
production costs; and (2) reallocation to K/L budget section.
In nominal wise, the realization of food subsidy budget in 2007 – 2012 records an increase
of Rp.14.3 trillion or to grow by 26.0 percent per annum on the average, from Rp.6.6 trillion
(0.2 trillion of GDP) in 2012. The realization of food subsidy budget is subject to some
parameters, including: (1) number of target households (RTS) entitled to rice for poor (raskin);
(2) quantum of rice for poor (raskin) distributed per RTS per month; (3) duration of rice for
poor (raskin) distribution; and (4) subsidized price of rice for poor (raskin)(the difference of
rice purchase (HPB) by Perum Bulog and the selling price of raskin per kg). The increase of
food subsidy budget realization in the said period is attributed to: (1) more quantum of
raskin distributed, from 1.7 million ton in 2007 and expected to record 3.7 million ton in
2012; (2) more target beneficiaries of raskin, from 15.7 million in 2007 to 17.5 million in
2012; and (3) higher price subsidy for raskin, from Rp.3,620.0/kg/RTS in 2007 to Rp5,698/
kg/RTS in 2012.
Meanwhile, in 2007-2012, the realization of fertilizer subsidy channeled through SOE
producing fertilizer shows upward trend reaching Rp.7.7 trillion or 17.4 percent per annum
Financial Notes and Indonesian Budget 2013
4-43
Chapter IV
on the average from Rp.6.3
trillion (0.2 percent of GDP) in
2007 to Rp.14.0 trillion (0.2
percent of GDP) in 2012. The
realization of fertilizer susbidy in
2007 – 2012 is due to: (1) higher
volume of subsidized fertilizer
from 5.7 million ton in 2007 to
11.3 million ton in 2012; (2) more
budget for underpayment of
fertilizer subsidy in previous year;
and (3) increasing fertilizer price
subsidy (the difference of
production cost (HPP) and the
highest retail price (HET).
Central Government Expenditure
GRAPG 4.34
NON-ENERGY SUBSIDY TREND, 2007-2012
trillion Rp
percent
60,0
1,2
40,0
0,8
20,0
0,4
-
2007
2008
2009
NonEnergy Subsidy
2010
2011
2012
APBNP
% to GDP
Source: the Ministry of Finance
The budget increase of subsidized fertilizer is consistent with attempts of supporting,
maintaining and improving national food resilience with agriculture production, productivity
and product quality improvement (notably rice). To reduce budget for fertilizer subsidy, the
Government will allocate fertilizer subsidy based on Definitive Group Needs Plan(RDKK) of
farmer groups in every region. In addition to fertilizer subsidy, as part of supports to agriculture
revitalization program, the Government has allocated budget for seed subsidy. This seed
subsidy aims to provide seeds of paddy, corn, and beans at affordable price to the farmers. In
2007 – 2012, seed subsidy not only accommodates price subsidy but also expenditure budget
for direct aids of superior seeds (BLBU) and national seed reserve (CBN). In nominal terms,
the realization of seed subsidy budget in such period records an increase of Rp.1.7 trillion, or
to grow by 65.7 percent per annum on the average, from Rp.479.0 billion in 2007 to Rp2.2
trillion in 2010. However in 2011, the allocation of seed subsidy budget was to significantly
decrease from 2010 to Rp.96.9 billion, as to 2012 it is expected that this seed subsidy budget
will to reach Rp.129.5 billion. It is because since 2011, the seed subsidy only accomodated
price subsidy, meanwhile budget allocation for BLBU and CBN were realloated to K/L budget
section and other expenditures. Such reallocation is to enhance accountability of budget
section management of General State Treasurer (BA BUN) and as a follow up action of BPK
findings.
Apart from providing food, fertilizer and seen subsidies, the Government allocates budget for
Public Service Obligation (PSO) to certain SOEs so that the selling price of their services will
be affordable by public. In 2007-2012, the realization of subdisy budget for PSO, in nominal
terms, is to rise by Rp.1.1 trillion or to grow 16.0 percent per annum on the average, from
Rp.1.0 trillion in 2007 to Rp.2.2 trillion in 2012. Such PSO subsidy budget allocation is mainly
relating to the increase of production costs for goods/services receiving subsidy/PSO. Budget
for PSO subsidy is allocated to PT Kereta Api Indonesia (Persero) for passenger railways
transport service of economy class; PT Posindo (Persero) for post services in isolated regions;
and Perum Lembaga Kantor Berita Nasional (LKBN) Antara for news services of texts, photos,
radio, multimedia, english news and television.
Meanwhile, in nominal wise, the realization of progam loan interest subsidy in 2007 – 2012
records an increase of Rp.946.4 billion or to grow by 30.1 percent per annum on the average,
from Rp.347.5 billion in 2007 to Rp.1,293.9 billion in 2012. This significant realization of
program loan interest subsidy is subject to loan interest rate fluctuation and outstanding
program credits coming from food and energy resilience credit scheme (KKP-E), including
4-44
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
risk sharing KKP-E and credits for the development of vegetable energy and plantation
revitalization (KPEN-RP). In addition, such realization increase of program credit interest
subsidy is attributed to additional credit schemes, i.e. Business Empowerment Program for
Entrepreneurs in NAD Nias (KPP NAD Nisa), Business Credit for Cow Seeds (KUPS), and
Warehouse Receipt Subsidy Scheme (SSRG) and security yield for People’s Business Credit
(KUR) to support micro, small and medium scale enterprises (UMKM).
Besides, the Government allocates budget for tax subsidy to support price stabilization of
basic needs and the development of national strategic industries. The trend of tax subsidy
realization is considerably subject to the types of commodities or sectors given with tax facility
consisting of tax charged to the Government (DTP). In 2007 – 2012, in nominal terms the
realization of tax subsidy (DTP) records a decrease of Rp.2.3 trillion or to drop 4.7 percent
per annum on the average, from Rp.17.1 trillion (0.4 percent to GDP) in 2007 to Rp.14.8
trillion (0.2 percent of GDP) in 2010 and expected to record Rp.4.3 trillion (0.1 percent of
GDP) in 2012. In 2012, tax subsidy is to decline significantly compared with previous year.
It is due to the revocation of value added tax facility (PPN DTP), meanwhile VAT for
subsidized fuel of certain type and 3-kg LPG is reallocated from tax subsidy to fuel subsidy
item. This measure is a follow up action of BPK’s findings. The trend of subsidy realization in
2007 – 2012 is presented in Table 4.8.
TABLE 4.8
SUBSIDY TREND, 2007-2012
(billion rupiah)
Description
2007
2008
2009
2010
2012
2011
APBNP
A. ENERGI
ENERGY
116.865,9
223.013,2
94.585,9
139.952,9
255.608,8
202.353,2
83.792,3
139.106,7
45.039,4
82.351,3
165.161,3
137.379,8
33.073,5
33.348,6
83.906,5
52.278,2
49.546,5
43.496,3
57.601,6
52.754,1
90.447,5
39.749,4
64.973,4
42.723,1
- Food
6.584,3
12.095,9
12.987,0
15.153,8
16.539,3
20.926,3
- Fertilizer
- Seed
6.260,5
479,0
15.181,5
985,2
18.329,0
1.597,2
18.410,9
2.177,5
16.344,6
96,9
13.958,6
129,5
- PSO - Program Credit Loan
1.025,0
347,5
1.729,1
939,3
1.339,4
1.070,0
1.373,9
823,0
1.833,9
1.522,9
2.151,4
1.293,9
24,6
-
103,3
225,7
-
-
-
-
17.113,6
1.514,0
21.018,2
-
8.173,6
-
14.815,1
-
3.411,8
-
4.263,4
-
150.214,5
275.291,4
138.082,2
192.707,1
295.358,2
245.076,3
- Fuel
- Electricity
B. NON ENERGI
NON ENERGY
- Cooking Oil
- Soybeans
- DTP (Tax charged to the Gov.)
- Other Subsidy
TOTAL
Source: the
Ministry of Finance
Sumber:
Kementerian
Keuangan
Grant Expenditure
Grant expenditure is a spending of Central Government in the form of money, goods or
services from the Government to the governments of other countries, international agencies/
organizations, and regional governments, especially foreign loans and/grants that will be
further extended to regions under SLA. Grant expenditure has non-repayment character,
uncompulsory and non-binding, not continuous, voluntary with right transfer and executed
under agreement between the grant provider and grant recipient.
In the next progress, the Government started to allocate budget of grant expenditure in
APBNP 2009 in amount of Rp.31.6 billion, however such budget was not totally absorbed
due to failure in issuing disbursement documents until the end of year. In 2010, the realization
of grant expenditure amounted Rp.70.0 billion or 28.8 percent of its ceiling in APBNP 2010
Financial Notes and Indonesian Budget 2013
4-45
Chapter IV
Central Government Expenditure
of Rp.243.2 billion with the following breakdowns: (1) Local basic Education (L-BCE)program
Rp.24.5 billion; (2) water supply grant program Rp.37.4 billion; and (3) wastewater treatment
grant program Rp.8.1 billion. Such realization totally consisted of grant expenditure to the
regional governments.
Meanwhile, realization of grant expenditure in 2011 was not only to finance grants to the
regional governments, but also grants to foreign country, i.e. the Palestine. Grant expenditure
realization in 2011 reached Rp.300.1 billion or 74.1 percent of its ceiling in APBNP 2011
recording Rp.404.9 billion. This realization reflected an increase of 28.8 percent higher than
last year’s realization. Grant expenditure realized in 2001 was for: (1) Mass Rapit Transit
(MRT) Project Rp.6.8 billion; (1) L-BEC program Rp.45.9 billion; (3) water supply grant
program Rp.161.7 billion; (4) wastewater treatment grant program Rp.16.0 billion; (5) water
and sanitation program, Sub-program D-Sanitation (WASAP-D) Rp. 6.3 billion; (6)
Infrastructure Enhancement Grant – Sanitation (IEG) Rp.43.4 billion; and (7) grant to the
Government of Palestine Rp.20.0 billion for the development of Cardiac Centre at Shifa
Hospital Gaza.
In APBNP 2012, the grant expenditure is set at Rp.1,790.9 billion with breakdowns as follows:
(1) MRT Project Rp.1,570.6 billion; (2) L-BEC program Rp.54.5 billion; (3) WASAP-D Rp.11.7
billion; (4) IEG-Transportation Rp.6.4 billion; and (5) Water Resources and Irrigation Sector
Management Project – Phase II (WISMP-2) Rp.147.8 billion.
From such grant expenditure realization in 2010 and 2011 some public services in regions
had been improved either in terms of activities or infrastructure development, for example,
capacity building for basic education in 691 activities in 50 kabupaten/cities and Tender
Assistance Services-1 for consulting services of MRT project. In addition, there are pipeline
infrastructure development activities consisting of 77,000 house connections to expand the
service coverage of piped water services, which were prioritized for low-income people;
infrastructure development for wastewater treatment system consisting of 4,826 house
connections; the development of sanitation infrastructure for poor households in 6 kabupaten/
cities; and the development of solid waste and wastewater facilities in 21 kabupaten/cities.
With such expanded piped water service coverage, wastewater management, sanitation facility
and solid waste management facility for particularly low income households, it is expected
that the health rates of residents in the benefiary regions be enhanced.
Social Aids
A wide variety of priority program
under this social aid program include:
(1) in education sector dedicated for:
School Operation Aids (BOS) of the
Ministry of Religions and aids for
students/university students of low-
4-46
trillion rupiah
In 2007 – 2012 budget of social aids increases 11.6 percent per annum on the average, i.e.
from Rp.49.8 trillion (1.3 percent of GDP) in 2007 to Rp.86.0 trillion (1.0 percent of GDP in
GDP) in APBNP 2012. This higher
GRAPH 4. 35
realization for social aids budget
SOCIAL AIDS TREND, 2007 - 2012
during such a period is particularly
86,0
allocated through K/L due to more
73,8
90
71,1
68,6
target beneficiaries of social aids and
80
57,7
70
higher amount of aid value to protect
49,8
60
the beneficiaries from social risks (see
50
Graph 4.35).
40
30
20
10
0
2007
2008
2009
Through K/L
2010
Non K/L
2011
2012
APBN-P
Source: the Ministry of Finance
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
income households; and (2) in health sector for the provision of basic health services to lowincome people in Puskesmas and their networks and referential health services of class III in
General/Private Hospitals under Public Health Insurance program (Jamkesnas), including
maternity services (Jampersal). The other programa are (3) in social protection sector with
the implementation of prosperous family building program (PHK) aiming to enhance the
quality of resources of poor households by empowering the mothers to encourage their children
to live hygienically and to attend schools; (4) in community empowerment program with
PNPM Mandiri such as: PNPM in Rural Areas; PNPM in Urban Areas, Development Program
in Underdeveloped and Special Regions (P2DTK); Rural Infrastructure Development
Program (PPIP); and Regional Social – Economic Infrastructure Development (PISEW)
and (5) natural disaster management aid ranging from pre-disaster, response emergency to
post-disaster.
In 2007 – 2010 the realization of social aid budget for BOS program is to rise by 23.9 percent
per annum on the average. i.e. from Rp.10.4 trillion in 2007 to Rp.19.8 trillion in 2010.
Starting from 2011 budget allocation to social aids for BOS program was only channeled
through the Ministry of Religions for the students of Madrasah Ibtidaiyah (MI)/Ula and
Madrasah Tsanawiyah (MTs)/Wustha, thus its budget allocation was to decrease to Rp.3.0
trillion. It is mainly due to BOS program reallocation which was previously accommodated
in DIPA of the Ministry of Education and Culture and then switched to Transfer to Regions.
Therefore the implementation of BOS is fully under the responsibility of the regional
governments. In 2012, allocation of BOS budget in the Ministry of Religions increases 36.2
percent to Rp.4.1 trillion.
Aids for the students/university students of low-income households, which have been budgeted
since 2008 have objectives of: (1) increasing the passing possibility of poor students/university
students; (2) reducing dropout rates as a result of tuition fee difficulties; and (3) lessening
financial burdens of students/university students from low-income households so that they
can continue their education in schoolds/universities. Aids for poor students/university students
record an average increase of 28.6 percent per annum, i.e. from Rp.2.3 trillion in 2008 to
Rp.6.2 trillion in 2012. This student aid program is dedicated for the students of SD/SDLB,
SMP/SMPLB, MI, MTs, SMA, SMK, MA, universities (PT), and religion university (PTA).
Budget of social aids in health sector is particularly to implement basic health service provision
program for the poor in Puskesmas and their networks and referential health services class
III in General/Private Hospitals assigned by the Government under Jamkesmas program
(including Jampersal that has been introduced since 2011). In 2007 – 2012, budget allocation
for Jamkesnas program is to rise by 10.1 percent per annum on the average, i.e. from
Rp.4.4 trillion in 2007 to Rp.7.2 trillion in in 2012. This higher realization is mainly relating
to the more varying services to the communities to provide optimum health services consistent
with the specified standards.
Social aids in other social protection sector are inclusive of prosperous prosperous family
program (PKH). In 2007 – 2012 budget for PKH program increases 17.1 percent per annum
on the average, i.e. from Rp.0.8 trillion in 2007 to Rp.1.9 trillion in 2012. This budget increase
for PKH program is primarily attributed to more beneficiaries, i.e. from some 501 thousands
RTSM (household beneficiaries) in 2007 to around 1.5 million RTSM in 2012.
In community empowerment, during 2007 – 2012 budget for the implementation of PNPM
Mandiri is to increase at 30.2 percent per annum on the average, from Rp.3.7 trillion in 2007
to Rp.14,0 trillion in 2012. Such PNMP Mandiri budget is allocated to improve the capacity
of communities, either individually or in group in dealing with problems, particularly in
efforts to enhance the quality of living standards, self-reliance and prosperity.
Financial Notes and Indonesian Budget 2013
4-47
Chapter IV
Central Government Expenditure
TABLE 4.9
PRIORITY PROGRAMS OF SOCIAL AID EXPENDITURE, 2007 - 2012
(trillion rupiah)
Program
No.
1.
2.
3.
School Operation Aids (BOS)
- Budget
- Target (million student)
- Allocation per student (rupiah)
• SD/MI Kabupaten
• SD/MI Kota
• SMP/MTs Kabupaten
• SMP/MTs Kota
Scholarship for Poor Students/Uni. Students
- Budget
- Target (million student/uni. student)
2007
2008
10,4
35,2
254.000
254.000
354.000
354.000
2009
12,5
41,9
254.000
254.000
354.000
354.000
2010
19,1
42,8
397.000
400.000
570.000
575.000
2011
19,8
44,1
397.000
400.000
570.000
575.000
2012
3,0
7,3
397.000
400.000
570.000
575.000
4,1
6,4
580.000
580.000
710.000
710.000
-
2,3
3,6
3,0
4,9
3,7
5,8
4,7
8,2
6,2
9,5
1,0
1,0
0,9
1,0
1,0
1,0
Jamkesmas
- Budget for basic health service
in Puskesmad and the network
- Budget for referential health services
in Class III Hospitals
- Target (million persons)
3,4
3,7
3,6
4,1
5,3
6,2
76,4
76,4
76,4
76,4
76,4
76,4
1,5
1.993
3,6
2.818
6,0
4.371
9,4
4.836
9,5
5.020
10,3
5.100
1,5
7.273
1,6
7.273
1,8
11.128
1,5
9.556
1,6
10.948
1,5
10.922
0,5
-
0,6
-
0,9
3.250
1,0
1.500
1,2
3.987
1,8
8.000
-
0,05
-
0,47
237
0,50
237
0,52
237
0,42
237
Prosperous Family Program (PKH)
- Budget
- Target (thousand RTSM)
0,8
501
1,0
720
1,1
726
1,3
816
1,6
1.116
1,9
1.516
6.
Reserve fund for disaster management
2,7
3,0
3,0
3,8
4,0
4,0
7.
Other social aids
27,6
28,2
33,7
22,2
38,7
48,8
49,8
57,7
73,8
68,6
71,1
86,0
4.
5.
PNPM Mandiri
a. PNPM Rural
- Budget
- Target (kecamatan)
b. PNPM Urban
- Budget
- Target (kelurahan)
c. PNPM PPIP
- Budget
- Target (kelurahan)
d. PNPM PISEW
- Budget
- Target (kecamatan)
TOTAL
Notes
1. Starting from FY 2011 BOS for the Ministry of Education and Culture reallocated to Transfer to Regions
2. As from FY 2011 Referential Health Services include also Jampersal services
Source
the Ministry of Finance
In addition, social aids given for disaster management in 2007-2012 record an average
increase of 8.2 percent per annum, from Rp.2.7 trillion in 2007 to Rp.4.0 trillion in 2012.
Fund reserve for natural disaster management is social aid allocated through BA BUN for
emergency condition when a natural disaster occurs. The aids will be provided from: (1) predisaster stage; (2) during response emergency stage; and (3) post-disaster stage. Priority
programs under social aids expenditures are presented in Table 4.9.
Other Expenditure
In 2007 – 2012 the allocation for other expenditure records fluctuation following the dynamic
policies taken by the Government and so does its realization, In 2007, the realization of
other expenditure budget was mainly for rehabilitation and reconstruction of the earthquakeravaged DI Yogyakarta and Central Java. In 2008, the realization of this other expenditure
budget was to rise significantly if compared with the previous realization. This increase
4-48
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
comes from ad-hoc Government policy, such as Cash Direct Aids (BLT), fund requirements
for 2009 general election, and other programs, inclusive of the procurement of facility and
infrastructure for the conversion of kerosene to LPG. In the mean time, budget realization
for the Government’s priority programs in 2009 were the dominant contributors in the
absorption of other expenditure budget. These priority activities included the funding for
general election, the procurement of facility and infrastructure for energy conversion, BLT
and rehabilitation and reconstruction of NAD province and Nias island of North Sumatra
province after the end of mandate of NAD and Nias Rehabilitation and Reconstruction Agency
(BRR). The realization of other expenditure budget in 2010 was particularly consisted of
expenditure realization due to different of exchange rate and budget realization for working
units not yet to have their own Budget Section (BA). In 2011, the realization of other
expenditure budget mostly comprised
GRAPH 4.36
the realization of operational
OTHER EXPENDITURE TREND , 2007-2012
expenditure of working units without
(%)
separate BA codes, the Government’s
rice reserve (CBN), and for emergency
spendings. In 2012, the realization of
budget for CBP and CBN, reserve for
food price stabilization, risk of land
capping, treasury services, and
emergency spendings are expected to
be the largest contributors for the
realization of other expenditure.
Illustration on the trend of other
expenditures in 2007 – 2012 is
presented in Graph 4.36.
trillion Rp
100,0
100,0
90,0
90,0
80,0
80,0
70,0
70,0
60,0
60,0
50,0
50,0
40,0
40,0
30,0
30,0
20,0
20,0
10,0
10,0
-
2007
2008
2009
2010
2011
2012
APBN
18,8
25,0
65,3
30,7
15,3
28,5
APBNP
17,0
32,1
53,3
32,9
15,6
68,5
Realization
15,6
30,3
38,9
21,7
5,5
-
% Realisasi
91,9
94,5
73,0
65,8
35,0
0,0
Source: the Mi nistry of Finance
4.3 The Highlights of Government Work Plan 2013
As mandated in Article 12 Law Number 17 of 2003 concerning State Finance, the preparation
of National Budget (APBN), apart from reference to the funding requirements for governance
operation and the capacity in raising revenues, the Government Work Plan (RKP) must be
also referred to. Development programs and the targets set in RKP of a certain year, as long
as relevant to budget intervention will be elaborated and receive funding priority in APBN of
the same year.
In view of problems and challenges that must be dealt with by the Government every year,
RKP must be prepared with development theme tailored with the challenges to be coped
with in the year and action plans to be taken in the next coming year. The development plan
is then further elucidated into priority focuses and priority activities to pursue the development
targets established in RKP. In light of that, every single working unit will be required to
prepare work and budget plan for its ministry/agency (RKA-KL) respective of their tasks
and functions in running governance tasks.
In general, Indonesia records a lot of meritorious achievements in many sectors amid
uncertain global situation. Inclusive and sustainable development is advocated in four tracks,
i.e. pro-growth, pro-job, pro-poor and pro-environment solely for people’s welfare
augmentation and human resources quality enhancement. In 2011, the national economy
of Indonesia grew at 6.5 percent despite global economic downturn and political tension in
Middle East and North Africa. The economic stability is controlled with well-maintained
inflation at 3.8 percent, the relatively stable rupiah exchange rate and robust fiscal resilience,
which is evident from budget deficit 1.2 percent of GDP and the lowering loan stocks to 24.3
Financial Notes and Indonesian Budget 2013
4-49
Chapter IV
Central Government Expenditure
percent of GDP. The performance of people’s welfare augmentation also shows promising
trend, which is obvious from the declining poverty rate from 16.7 percent in 2004 to 12.4
percent in 2011 with broader spread. As to open unemployment it dropped from 9.9 percent
in 2004 to 6.6 percent in 2011.
In 2012, the development efforts are continually intensifying to attain the specified
development targets. In economic sector, the priorities are aimed to maintain economic
growth and fiscal resilience, to expand employment, to accelerate infrastructure development,
and to increase food supplies. In people’s welfare, the priorities are focused on efforts to
improve education and health services and to acclerate the realization of Millenium
Development Goals (MDG) and to alleviate poverty. In politics, law and security sector, the
priorities are to eradicate corruptions, to accelerate bureaucracy reform, and to deal with
hortizontal conflicts and the impacts of regional election.
Meanwhile in 2013 the global conditions are predicted still glooming. Debt crisis suffered by
developed countries especially in Europe, compounded with intensifying political tension in
Middle East, North Africa and Korean peninsula, climate change and potential disaster at
global level and the soaring energy price can compromise the global financial stability and
economic recovery that in turn affect national economy.
Potential protection and unfair measures to win domestic and export markets by many
countries as a result of lower global economic growth prediction in 2013 (4.1 percent) than
2011 prediction (3.9 percent) will intensify. This condition will spur bitter competition of
countries to win trade and investment markets. Amid such conditions, domestic economy
must be bolstered and competitiveness at global and national level must be fortified.
People’s welfare augmentation is another major challenge in economic development. Thus,
acceleration and expansion will be enhanced to reduce open unemployment rate to 7.7 million
persons and poor peoples of 29.9 million person in 2011, while taking prosperity disparities
under consideration either among social groups or regions.
In view of the achieved performance, potentials owned, challenges and problems to cope
with and determination to attain the targets of RPJMN 2010 – 2014 i.e. to Realize Democratic,
Prosperous, and Just Indonesia, the theme of RKP 2013 is: “REINFORCING DOMESTIC
ECONOMY FOR PEOPLE’S WELFARE AUGMENTATION AND EXPANSION”.
Such development theme in RKP 2013
are then elucidated into four tracks of
development strategies, i.e. to increase
economic growth (pro-growth), to
expand employment (pro-job), to
alleviate poverty (pro-poor) and to
respond climate change related problems
(pro-environment). Given that. The main
targets of national development for 2012
– 2014 to pursue in 2013 are: (1) for the
augmentation of people’s welfare, the
economic growth must be at 6.8 – 7.2
percent range, open unemployment at
5.8 – 6.1 percent, poverty rate at 9.5 –
10.5 percent; (2) to foster democracy,
Indonesia Democracy Index must be at
68 – 70 range; and (3) for law awareness
development, the Indonesian Corruption
Perception Index must reach 4.0.
4-50
GRAPH 4.37
DEVELOPMENT TARGET AND REALIZATION TREND , 2010-2013
2010
2011
2012
2013
6,2
6,5
6,5
6,8-7,2
Economic Growth (%)
*)
Indonesian Democration Index
(IDI)
2010
Unemployment Rate (5)
2011
2010
2011
64,3
65
2012
2013
68-70
68-70
7,1
6,5
2012
2013
64-6,6
Corruption Percention Index
(IKP)
5,8-6,1
Poverty Rate (%)
*)
2010
2011
2012
2013
3,0
3,0
3,2
4,0
2010
13,3
2011
12,4
2012
10,5-11,5
2013
9,5-10,5
*) minimum preferred
Source: the Ministry of Finance, RKP 2011, RKP 2012, RKP 2013
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Subject to the problems and challenges to be dealt with in the pursuit of development goals,
in 2013, 11 national strategic issues have been set that can be further classified into four
main challenges. The first main challenge is how to fortify competitiveness with strategic
issues
of:
(1)
investment
and
business
climate
improvement;
(2) infrastructure development acceleration; (3) industrial development in various economic
corridors; and (4) employment generation, especially for young workforce. The second major
challenge is to bolster economic resilience with strategic issues: (1) food resilience toward 10
million tons rice surplus; and (2) electrification and energy convertion ratio acceleration.
The third main challenge concerns people’s prosperity augmentation and expansion with
strategic issues: (1) human resources development; and (2) poverty alleviation acceleration
with the synergy of cluster I – IV. The fourth main challenge deals with social political
stability with strategic issues of: (1) 2014 general election preparation; (2) bureucracy
performance improvement and corruption eradication; and (3) Minimum Essential Force
development acceleration.
Based on the targets to achieve in 2013, and development success chalked up in 2011 and the
expected development output in 2012 and other various problems and challenges to be
addressed and dealt with in 2013, RKP 2013 sets 11 (eleven) national development priorities.
These eleven priorities are: (1) bureaucracy reform and good governance; (2) education; (3)
health; (4) poverty alleviation; (5) food resilience; (6) infrastructure; (7) investment and
business climates; (8) energy; (9) environment and disaster management; (10) [the
development of] underdeveloped regions, the frontiers, outer islands and conflict-torn regions;
and (11) culture, creativity and technology innovation. In addition there are three other
priorities, i.e.: (1) politic, law and security affairs; (2) economic affairs; and (3) people’s
welfare affairs.
Targets to achieve with budget allocation for bureaucracy reform and good governance
priority in 2013 are: (a) the implementation of good governance in all government institutions
improved in integrated, full integration, accountable, law abiding manner; (b)the quality of
public services enhanced supported with professional service delivery, highly integrated human
resources, and the application of minimum service standards (SPM); and (c) the effectiveness
of regional autonomy improved supported with sound governance management and regional
development, intensified SPM introduction, enhanced quality of special allocation fund (DAK)
application, improved quality of regional spendings, and timely APBD enactment and
accountability.
To attain these targets, the policies on bureaucracy reform and good governance development
in 2013 will be directed to: (1) institutional bureaucracy restructuring respective of their
tasks and function, bureaucracy reform quality enhancement, procedure improvement,
human resources management development; (2) regional autonomy restructuring by
accelerating the introduction of 15 SPMs in regions to support decentralization management,
and financial capacity building of regional governments to the applications of such SPM; (3)
accelerating the harmonization and synchronization of laws and regulations at central and
regional level; (4) the enactment and application of key performance indicators of public
services; and (5) improved integration and integrity of law enforcement.
Targets to achieve in education priority in 2013 are: (1) to encourage education participation
at all levels with school participation rate (APM) for elementary schools (SD)/madrasah
ibtidaiah (MI)/equal reaching 95.8 percent, APM of junior secondary schools (SMP)/
madrasah tsanawiyah (MTs)/equal recording 80.1 percent and APM of Senior Secondary
Schools (SMA)/Vocational School (SMK)/madrasah aliyah (MA)/equal reaching 82.0
percent and APK of state/private universities of 28.7 percent; and (2) to enhance education
Financial Notes and Indonesian Budget 2013
4-51
Chapter IV
Central Government Expenditure
quality by increasing the proportion of certified teachers holding S1/D4 degrees to 68.0 percent
for SD/MI, 92.3 percent for SMP/MTs and SMA/MA and 95.4 percent of SMK.
To achieve these varying targets, the policies on education development in 2013 will be
directed: (1) to enhance the distribution of nine-year compulsory basic education program;
(2) to improve access, quality and relevancy of secondary education started with the
introduction of universal secondary education policy; (3) to expand access, quality, relevancy
and competitiveness of tertiary education; (4) to elevate professionalism and equalize
distribution of teachers and pedagogical staff; (5) to expand access and enhance quality of
childhood education (PAUD); non-formal education and informal education; (6) to improve
the quality of religion and religiosity education; (7) to strengthen national education system
implementation; (8) to enhance efficiency and effectiveness of education service
management; (9) to reinforce education governance; and (10) to fortify character building.
Targets to achieve in health priorities in 2013 are (1) to expand the coverage of childbirth
service by well-trained health operators to 89 percent; (2) to increase the number of Puskesmas
receiving Health Operation Aids (BOK), i.e. 9,323 puskesmas; (3) to facilitate water supply
development in 417 areas, 1,610 villages and 157 kecamatan capital (IKK) and sanitation
development in 737 areas and 70 kabupaten/cities; (4) to increase the number of health
operators and to maximize their services with incentive provision particularly for those who
are assigned in isolted regions, border areas and islands (DTPK) and other regions experiencing
health troubles (DBK) to 5,320 persons; (5) to increase the number of puskesmas delivering
Jamkesmas facility to 9,323 units and Jampersal facilities to 2,663 units; (6) to increase the
percentage of home health equipment products and logistics (PKRT) complying with the
established safety, quality and benefits to 90 percent; and (7) to increase new family planning
(KB) participants to 7.5 million with active KB participants to rise to 29.0 million.
To pursue these targets, policies on health development in 2013 will be focused: (1) to expand
access to quality health services and nutrition for mothers and children; (2) to control
contagious and non-contagious diseases and sanitation; (3) to fortify professionalism and
maximize health operators notably with regard to equal distribution of their assignments;
(4) to increase health insurance; equality, affordability, security insurance, efficacy and quality
of medicine, health equipment and foods, and the competitiveness of domestic products; and
(6) to improve access to KB services.
In view of policies and programs implemented, and the realized outcomes, and problems to
be addressed, the targets of poverty alleviation priority in 2013 are to reduce poverty
rate at 9.5 – 10.5 percent of total population. Thus, the policies to attain such poverty
alleviation target in 2013 will be as follows: (1) to promote inclusive and labor intensive
economic growth (pro-growth & pro-job), especially in sectors involving poor people (propoor); (2) to maintain production stability and food supply availability; (3) to enhance the
power and self-reliance of people to participate actively in inclusive and just development;
(4) to enhance the effectivness of pro-people programs; and (5) to improve the quality of
social insurance services particularly health insurance for poor people and vulnerable groups.
To exercise such policies, poverty alleviation initiatives will be focused on five issues, namely:
(1) to improve and to enhance the quality of household-based social protection policy; (2) to
improve and to enhance the effectiveness of PNPM Mandiri; (3) to expand the access of
micro and small enteprises to productive resources; (4) to improve and expand pro-people
programs; and (5) to improve the synchronization and effectiveness of poverty alleviation
coordination and harmonization of its actors.
Targets to achieve in food resilience priority in 2013 are: (1) to improve paddy production
by 6.25 percent, or production rate of 72.1 million tons of ground un-hulled paddy grains
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(GKG), especially with productivity improvement and cropping areas expansion; corn
production 26 million tons, beans production 2.25 million tons, sugar production 3.21 million
ton, beef production 566 thousand ton, fish production 18.49 million ton (capture fish 5.47
million ton and fish farming 13.02 million ton), and higher production of miscellaneous
meats; (2) maintained good price stability especially domestic rice. (3) reduced rice
consumption by 1.5 percent per annum; (4) better quality of food consumption pattern with
Ideal Dietary Pattern (PPH) to around 91.5; and (5) farmer exchange rate index (NTP) and
fishermen exchange rate index (NTN) above 105.
To pursue the targets of food resilience priority, the policies on food resilience development in
2013 will be directed as follows: (1) food production improvement toward 10 million ton rice
surplus starting from 2014 by increasing the productivity of food crops, especially paddy and
secondary crops with the application of Field Schoold of Integrated Cropping Management
(SL-PTT) and Corporate Based Food Production Improvement Movement (GP3K) and
livestock and fishery productivity improvement; agriculture and fishery area expansion, with
the creation of 100 thousand hectares of paddy fields under GP3K program by SOEs;
agriculture and fishery production protection from pests and diseases; production input
provision improvement (parents, seeds, food and fertilizers) and agriculture and fishery
infrastructure including the procurement of fishing boats and fishery jetties, especially in
Eastern Regions of Indonesia; food production quality enhancement including fishery;
capacity building in counseling, researches and development to support food production;
water supply and irrigation infrastructure service improvement with synchronization of
irrigation infrastructure at various government levels ranging from primary, secondary to
tertiary networks and at farmer level and agriculture lands; and national irrigation network
revitalization acceleration particularly irrigation under the management of regions through
irrigation management partnership of the Government and regions; (2) access expansion of
people to foods and price affordability with domestic food price stabilization; efficiency
improvement in inter-region and inter-season food distribution and logistics; and food export
– import control; (3) food consumption quality enhancement by accelerating the
diversification of food consumption including food shortage management improvement;
and quality and type enhancement of animal protein based processed foods for nutrition
quality promotion especially for low income people with livestock raising other than cows
and buffalos such as poultry, goats/donkeys, rabbits and pigs and fish; (4) farmer protection
and empowerment and farmers’ welfare augmentation by protecting the prices of agriculture
commodities at farmer level, the provision of capital sources for farmers coupled with broader
access of the farmers to capital sources, and capacity building for the farmers with training
and education and extension services, and improved access of the farmers to information,
markets and technology.
Targets to pursue from infrastructure priority in 2013 are inclusive of: (1) to expand the
capacity of infrastructure supporting the development in terms of quality and quantity;
focused on the Eastern Regions of Indonesia and economic growth centers; (2) to accelerate
the development, rehabilitation and maintenance of irrigation infrastructure and dams to
support national food resilience; (3) to accelerate the provision of raw water; (4) flood control
at economic growth centers; (5) rehabilitation and reconstruction of regions vulnerable to
disasters; (6) to improve national connectivity so as to support the development of 6 national
economic corridors; (7) to reinforce virtual domestic interconnectivity (Indonesia connected);
(8) to expand the access of households to liveable, safe, affordable houses and settlement
environment with adequate infrastructure, facilities and utilities; (9) to bolster energy
resilience with electrical power generation; (10) to enhance the quality of infrastructure
construction to meet their service/economic life; and (11) to accelerate infrastructure
development under public private partnership (PPP) scheme.
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Central Government Expenditure
To attain the above targets in infrastructure development priorities in 2013, generally
speaking, policies on infrastructure development as established in RPJMN 2010 – 2014 will
be focused on: (1) improving infrastructure services according to minimum standard service
(SPM); (2) elevating the competitiveness of real sector; and (3) fostering public private
partnership (PPP).
Targets to be achieved from investment climate and business climate priorities in 2013 are:
(1) investment growth consisting of gross fixed capital formation (PMTB) in 2013, which is
expected to grow 12.1 percent; and (2) ease of doing business.
To support the realization of such targets in investment climate and business climate
priority in 2013, the policies will be directed: (1) to simplify and accelerate investment and
business procedures; (2) to deregulate the implementation of PPP projects; (3) to enhance
efficiency of national logistic system with National Single Window (NSW) expansion and
distribution routes and facilities development; (4) the development of special economic zones
(KEK) in economic corridors having geo-economic and geo-strategic advantages; and (5) to
improve manpower climate and strengthen the institution of industrial relationship.
Targets to attain in energy priority in 2013 are; (1) to increase oil production to 890 – 930
thousand barrels of oil per day (BOPD); (2) to increase the production of natural gas to
1,325-1,390 thousands of barrels of oil equivalent per day (BOEPD); (3) to increase the
production of coals to 337 million tons; (4) primary energy mix: geothermal, hydro and
other New and Renewable energy (EBT) 11.5 percent, coal 56.7 percent, gas 22.1 percent
and oil 9.7 percent; (5) energy saving: industries 2.9 percent, commercial 2 percent,
transportation 6 percent and domestic 5.6 percent; (6) to increase the capacity of power
generation by 3,000 megawatt, either by the Government or business entities; and (7) to
raise electrification ratio to 77.6 percent.
To support the realization of targets set for energy development priority in 2013, the policies
of energy development will be generally focused: (1) to increase the production of oil and
gas; (2) to increase the production and consumption of domestic coals; (3) to promote the
consumption of natural gas for domestic demands; (4) to increase the installed capacity of
geothermal; (5) to reduce fuel and electricity subsidies in phases; (6) to encourage behavior
of energy saving among the government apparatus, business entities and people; and (7) to
increase the consumtion of new and renewable energies.
Targets to attain from environment and disaster management priorities in 2013 are: (1) to
control the destruction rate of natural resources and environmental pollution; (2) to improve
information system of climate change and disaster mitigation; and (3) disaster emergency
management.
Policies to support the realization of targets set for environmental development and
disaster management priority are: (1) to rehabilitate forests and critical watersheds (DAS)
500 thousand ha and 500 thousand ha in people’s forests and village forests; (2) to finalize
border demarcation of 19 thousand km long and the operation of 30 Forest Management
Units (KPH); (3) Disaster and Climate Change Information system; (4) the provision of
logistics in disaster prone regions; and (5) anticipation of earthquake and tsunami threats
with capacity building in preparedness and reduction of disaster risks, the provision of early
warning system and temporary evacuation shelters (TES).
Development targets to reach from [the development of] underdeveloped regions,
frontiers, outer islands and conflict-torn regions priority in 2012 are: (1) to increase
average economic growth in underdeveloped regions by 6.9 percent in 2013; (2) to reduce
the percentage of poor population in underdeveloped regions by 15.4 percent on the average
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in 2013; (3) to enhance the quality of human resources in underdeveloped regions indicated
with average human development index (HDI) in 2013 71.2; (4) to open the isolation of
kecamatan in border areas and small outer islands (PPKT); (5) to improve access to quality
education and health service in kecamatan of border areas and small outer islands (PPKT);
(6) to prepare strategic plans based on priority border location (blue print); (7) to implement
livestock raising enterprises in Pegunungan Tengah, Bomberai and Kebar; (8) to provide
free education service until senior secondary level for all districts and kampongs in Papua
province and West Papua province; (9) to provide alternative renewable energy sources
(microhydro power generator (PLTMH), solar power generation (PLTS) and the construction
of cement factory in Timika and Manokwari; and (10) special quota for Papua young
generation.
To attain the above targets, the policies will be exercised to support priority programs of [the
development of] underdeveloped regions, outer islands and conflict-torn regions in 2013,
i.e.: (1) to develop local economy of underdeveloped regions by optimizing their potentials
with cluster approach; (2) to improve infrastructure and facility, to deliver quality education
and health services and affordable in underdeveloped regions; (3) to provide transport facilities
and services connecting kecamatan in border areas; (4) to prepare strategic plan (blue print)
and detail spatial plan of kecamatan being the priority locations and PPKT; (5) to develop
decent schools including the associated teaching-learning facilities with qualified teachers
and their incentives (houses, special allowances) in kecamatan of outer islands and PPKT,
and the development of boarding schools in kecamatan of outer island and PPKT (priority
locations); (6) to strengthen food resilience in Papua and West Papua; and (7) great attention
to indigenous people in Papua and West Papua.
Targets to be achieved from culture, creativity and technology innovation priority in
2013 are: (1) to establish and enact integrated cultural reserve management; (2) museum
and library revitalization; (3) facilitation for cultural art development, exploration and
performance in big cities and kabupaten capitals; (4) research and development on culture
and archeology to support culture development policies; (5) to elevate appreciation, creativity
and productivity of art actors; (6) to enhance national film production and film censorship
agency services both in terms of quality and quantity; (7) to fortify the capacity and creativity
of youth in science and technology, religious faiths and devoutness, arts, culture and creative
industry; and (8) to implement basic research packages, applied researches, and incentive
research packages.
To achieve these targets, the policies to support culture and science and technology
development priority in 2013 will be directed to: (1) magnify the awareness and understanding
of people on the importance of character and national identity building; (2) cultural heritage
development and exploration; (3) elevate public appreciation to art and culture diversity; (4)
build cultural capacity; and (5) advance and development technology and creativity of youth.
Targets to achieve from other priority in politics, laws and security affairs in 2013
are: (1) to enhance the quality of democracy in Indonesia; (2) to improve the capacity in
monitoring, early detection of terrorism attack threaths and to enhance the effectiveness in
deradicalization process; (3) to maximize national defense industries to establish a self-reliant
defense; (4) to promote the roles of Indonesia in maintaining national security and establishing
peaceful world; and (5) to intensify corruption prevention and eradication measures, and to
respect, protect and comply with human rights in various sectors.
To realize the foregoing targets, the policies to support the realization of other priorities in
politics, laws and security affairs in 2013 will include: (1) revising terrorism acts prevention
Financial Notes and Indonesian Budget 2013
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Central Government Expenditure
and anticipation coordination management, and empowering people in terrorism acts
prevention; (2) delivering political education to implant democracy values and nationality
to people in general; (3) maximizing national defense industries toward self-reliant defense
with the procurement of primary weaponry system for the Armed Forces and National Police
(TNI/Polri); (4) reinforcing coordination of law enforcers in corruption crime management
and salvaging assets accumulated from corruption; and (5) fortifying the respect, protection
and compliance of human rights.
Targets to achieve from other priority in economic sector in 2013 are: (1) non-oil and
gas processing industries to grow at 6.8 – 7.0 percent; (2) to buttress the commitment of
Indonesia in Asean Economic Community 2015 with the compliance of MEA Scorecard
until 90 percent; (3) to succeed WTO Ministerial Conference IX and APEC chairing and
hosting in 2013; (4) open unemployment to drop 5.8 – 6.1 percent in 2013; (5) migrant
workers (TKI) registered according to their Single Identity Number (NIK)for 600,000 persons
in 2013; (6) competitive of UMKM (micro small and medium enterprises) elevated evident
from increased UMKM productivity by 5.0 percent; employment absorption 2.0 percent,
contribution of UMKM for GDB formation 6 percent, and export values of UMKM products
15.0 percent; (7) capacity and quality of cooperatives enhanced.
To realize these targets, the policies to introduce to support other priorities in economic sector
in 2013 will be directed to: (1) assure regulation certainty and more effective bureucracy
services in non-oil and gas processing industries; (2) establish mutual and non-discriminatory
multilateral and regional trade system; (3) expand business opportunities for young
generation; (4) establish one-stop migrant worker service post at kecamatan level in 123
kabupaten/cities of migrant workers enclaves; and (5) promote cooperative and UMKM
business activities with integrated business service centers, cooperative revitalization and
national KUMKM survey.
Targets to achieve from budget allocation to other priority in people’s welfare sector in
2013 are: (1) to increase the number of foreign tourists to 9.0 million persons and domestic
tourist travels of 250 million travels; (2) to augment the tourism contribution in national
employment absorbtion to 8.35 million persons; (3) to promote the roles of youths in economic,
political, social and cultural development; (4) to enhance the quality and capacity of guidance
and counseling on religious tenets application in families and societies; (6) to prepare policies
on the implementation of gender mainstreaming (PUG) in political and decision making
and manpower affairs; (7) to facilitate the introduction of PUG (Gender Mainstreaming)
policies and women protection against any and all violences; (8) to introduce gender
segragated data system; and (9) to facilitate policies on violation eradication to children.
To attain these targets, the policies to take to support other priorities in people’s welfare
sector in 2013 will be: (1) to promote 10 tourism destination objection in Indonesia with
creative and effective marketing and promotion channel and to to enhance the quality of
tourism supporting facilities and services networks; (2) to encourage the participation and
active roles of youths in full range of cultural development and enhancement and sports
both at regional and international level; (3) to fortify the understanding, comprehension,
application and development of religious values and to advocate harmonious religious life;
and (5) to integrate gender perspective in planning and budgeting cycles within overall
ministries and agencies; and to reinforce protection for women and children against any and
all violences.
Some strategic targets of national development in 2013 as indicated in RKP 2013 can be seen
in Table 4.10.
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TABLE 4.10
SOME STRATEGIC DEVELOPMENT TARGETS 2013
STRATEGIC ISSUES
FORTIFYING COMPETITIVENESS
1. Boltering Climate for Investment and Business
a. Investment Promotion (%)
b. Ease of Doing Business, including:
- Time to commence business (days)
- License to build Building (days)
2. Infrastructure Development Acceleration: Domestic Connectivity
a. National Links in Good Condition (%)
b. District/City Capital served by broadband service (%)
3. Industrial infrastructure development in various economic corridors
a. Processing Industry Improvement (%)
b. Non-Oil and Gas Processing Industry Improvement (%)
4. Employment Generation especially for young workforce
- Open unemployment rate (%)
REINFORCING ECONONIC RESILIENCE
5. Food Resilience: toward 10 million ton rice surplus
a. Paddy production (million tons og GKG)
b. New Paddy Fields (thousand ha)
6. Electrification and Energy Conversion Ration increased
a. Peningkatan
Electrification
Rasio
Ration
Elektrifikasi
increased
- Electrification Ration (%)
- Generator Capacity (MW)
b. Pelaksanaan
Gas Conversion
Konversi Gas
- Gas connection to houses
AUGMENTING AND EXPANDING PEOPLE WELFARE
7. Human Resources Development
Education
a. Average School Attendance of 15 years old and over population
b. APM SD/SDLB/MI/Paket A (%)
c. APM SMP/SMPLB/MTs/Paket B (%)
Health
a. Improve access to health and quality nutrition for mothers and childred
- Percentage of 0-11 month infants receiving complete basic immunization
b. Contagious and non contagious disease control and sanitation improvement
- Number of villages performing Community Based Total Sanitation (STBM)
c. Professional improvement of and maximizing the health operators
- Number of health operators maximized and granted with incentives in DTPK and DBK
d. Helath Financing Insurance improvement
- Number of TT Class III used to deliver health services (new initiative)
e. Improving the supplies, distribution, affordability, safety, efficacy and quality of medicine, health
equipment and food and competitive domestic products
- Percentage of medicine and vaccine supplies
f. Access to quality KB (Family Planning) services improved and equlized
- Number of new KB participants from poor households (KPS and KS-II) receiving contraception (1
million contraceptors)
8. Poverty alleviation acceleration: Cluster I-IV synergy
a. Poverty Rate Decrease (%_
i. Culster I
• PKH (million RTSM)
• Raskin (million RTS)
• Jamkesmas (million jiwa)
ii. Cluster II
• PNPM Rural (Kecamatan)
• PNPM Urban (Desa/Kelurahan)
iii. Cluster III
- Number of UMKM advocated to access KUR credit facility (KUMKM)
iv. Cluster IV
• The Development of self-help houses/very low cost houses (thousand units)
REINFORCING SOCIAL POLITICAL STABILIZATION
9. Preparing 2014 General Election
- Political participation in 2014 (%)
10. Improving Bureaucracy Performance and Corruption Eradication
- Corruption Perception Index
11. Development Acceleration toward Minimum Military Force
Weaponry (Alutsista) improvement (%_
- Land military force
- Sea military force
- Air military force
2011
2012
2013
8,8
10,9
11,1
45
158
36
145
20
137
88,50
66
90,50
76
92,50
83
6,2
6,8
6,1
6,6
6,7
7,2
6,6
6,4-6,6
5,8-6,1
65,7
62,1
67,8
100
72,1
100
72,95
37.353
75,90
43.653
77,60
48.555
17.939
16.000
16.000
7,92 *)
95,55
77,71
7,85
95,7
75,4
8,25
95,8
81,0
84,7
85
88
6.235
11.000
16.000
1.376
3.820
5.320
-
-
10.544
87
90
95
4,29
3,89
3,97
12,5
10,5-11,5
9,5-10,5
1,116
1,516
2,4
17,5
17,5
(Jan-Jun)
15,5
(Jul-Des)
15,5
76,4
76,4
86,4
5.020
10.948
5.100
10.948
5.230
10.922
-
27.520
27.520
-
60
298,25
75**)
3,0
3,2
4,0
17
15
22
30
19
24
37
21
31
Note:
*) realization in 2010
**) targets to achieve in 2014 General Election. Year 2013 is for preparation to pursue such targets
Source: RKP 2013
Financial Notes and Indonesian Budget 2013
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Chapter IV
Central Government Expenditure
4.4 Policies and Central Government Expenditure Budget
in APBN 2013
As a component of State Budget (APBN), budget allocated for government expenditures is
designed and prepared for the reflection of state finance management enacted on yearly
basis under a law and implemented in transparent and accountable fashion solely dedicated
for the prosperity of people, as mandated in Article 23 of 1945 Constitution (UUD 1945). In
light of that, as one of fiscal policy pillars, policy on government expenditure plays very
strategic roles, notably in pursuing the main targets of national development, either for
medium term targets or annual targets. To get maximum results, policy management,
including in respect of budget allocation, the government expenditure must be prepared in
professional, meticulous manner subject to the targets to pursue as established in MediumTerm National Development Plan (RPJMN) and Government Work Plan (RKP).
As an integral part of government expenditure budget, policy and allocation of budget for
central government expenditure in draft state budget (RAPBN) 2012 have been worked out
with reference to the policy directions and development priorities established in RKP 2012,
fiscal policy highlights, and macro-economic framework 2012 as mutually agreed between
the Government and House of Representatives of Republic of Indonesia (DPR-RI) during
preliminary discussion on RPJMN 2013. Consistent with the directions of development spelled
out in RPJMN 2010-2014 and RKP 2013, the policy of Central Government Expenditure
Budget will be aimed at supporting the realization of development targets according to the
missions of RPJMN 2010 – 2014, i.e.: (1) Continuing the development toward prosperous
Indonesia; (2) reinforcing democracy pillars; and (3) strengthening justice dimensions in all
sectors.
Based on policy directions and strategic targets to pursue in 2013, and in view of problems
and challenges that are likley to deal with in the coming 2013, the Government along with
DPR during preliminary discussion forum on RAPBN 2013 agreed to set a National
Development Theme in RKP 2013 saying: “Reinforcing Domestic Economy for People’s
Welfare Augmentation and Expansion”. Consistent with this theme and as a series of RPJM
2010-2014 implementation, RKP 2013 establishes 11 (eleven) national development priorities,
to wit: (1) Bureucracy Reform and Good Governance; (2) Education; (3) Health; (4) Poverty
Alleviation; (5) Food Resilience; (6) Infrastructure; (7) Investment Climate and Business
Climate; (8) Energy; (9) Environment and Disaster Management; (10) [the Development
of] Underdeveloped Regions, the Frontiers, Outer Islands and Conflict-Torn Regions; (11)
Culture, Creativity and Technology Innovation; and other three priorities, namely: (1) Politics,
Laws and Security Affairs; (2) Economic Sector; and (3) Welfare Sector.
To support the realization of targets of each priority and other program targets in RKP 2013
the policies of Central Government expenditure in APBN 2013 will directed to the following
measures: (1) to maintain the payment of the 13th salary and pension and to increase basic
salary and basic pension of TNI/Polri by 7 percent on the average, and to rise the salaries of
judges; (2) to finalize Bureaucracy Reform program within the Ministries/Agencies, and
evaluation of K/L remuneration budget policies for Bureaucracy Reform with regard to
their implementation especially public services still needed improvement; (3) to establish
more efficient governance operation with flat policy in office operational material spendings;
and (4) to revise the introduction of Performance Based Budgeting (PBB) and Medium
Term Expenditure Framework (MTEF) so as to enhance the quality of spendings.
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Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Meanwhile to support the implementation of development programs in order to achieve the
specified economic growth and poverty alleviation targets, the policies of Central Government
expenditure will be directed: (1) to increase infrastructure budget to improve domestic
connectivity, energy resilience and tourism destination promotion; (2) to support MP3EI
program on infrastructure development at 6 (six) economic corridors; (3) to build the capacity
in climate change mitigation and adaptation with budget supports of environmental
conservation and renewable energy development; and (4) to strenghten social protection
program in order to reduce poverty rate including to reinforce pro-people program (cluster
4) and the synergy of clusters under Master Plan for the Acceleration and Expansion of
Indonesia’s Economic Development (MP3KI).
In addition, policy of Central Government expenditure will be exercised to buttress
Government programs with regard to the provision of subsidies and certain activities executed
in 2013 inclusive of: (1)efficient subsidy policy, i.e. allocated to the most needy beneficiaries
coupled with subsidy control either for energy or non-energy sectors; (2)to provide additional
budget for the introduction of well-targeted subsidy; (3) to enhance efficiency of fuel
subsidy allocation, i.e. to the target beneficiaries with subsidized fuel consumption control,
socialization of fuel consumption conversion program, city gas development and the
consumption of BBN; (4) to enhance efficiency of electricity subsidy allocation, i.e. to the
target beneficiaries with electricity rate increase while keeping the provision of affordable
electrical power for low-income households and other needy groups, and promoting the
consumption of renewable energy; (5) to anticipate global economic uncertainty
with fiscal risk reserve supports; (6) to allocate budget for Social Security Providers (BPJS),
SJSN implementation and efficiency in the implementation of Social Aids budget; (7) to
anticipate the preparation of fair, well-planned and democratic general election in 2014 so
as to maintain national stability; (8) to provide budget allocation for the formation and
operational activities of Financial Service Authority (OJK); (9) to allocate budget for the
construction of protection shelters against disasters, disaster prone area mapping, and housing
development for new citizens in border areas with East Timor; (10) to allocate budget for
the preparation of APEC Meeting host in 2013; and (11) to support research activities on low
cost green car, low carbon emission, superior paddy seeds and researches on disease and
health issues.
As for initiatives to enhance the quality of spendings, especially Central Government
expenditure, the Government is continually attempting to revise the introduction of
performance based budgeting (PBB). The main principles for PBB application are that of
well-cut linkage of policies established in national planning document and budget allocation
managed by K/L respective of their tasks-functions. The said planning documents are
Government Work Plan (RKP), and K/L Work Plan; meanwhile budget allocation managed
by K/L is reflected in K/L Work and Budget Plan (RKA KL) and Budget Allocation List
(DIPA). In 2013, the introduction of PBB is focused on output restructuring and confirmation
of output cost standard (SBK) roles in planning-budgeting process. Output restructuring
aims to direct the achieved performance more consistent with the established performance
indicators. Meanwhile, SBK which reflects the amounts of costs required to produce activity
output plays function of making budget allocation in planning stage more efficient. Thus, it
is expected that the set targets can be materialized with optimum budget spendings.
Financial Notes and Indonesian Budget 2013
4 -5 9
Chapter IV
Central Government Expenditure
Based on strategic targets, development priorities, general policies and budget planning process
as previously noted, the budget allocation for Central Government expenditure in APBN
2013 is to amount Rp.1,154.4 trillion (12.5 percent of GDP). This allocation in APBN 2013
will be spent to support a wide range of development programs, either executed by the
ministries/agencies (K/L expenditure) respective of their tasks and functions or cross-sector
programs, and/or non-K/L expenditure according to development priorities prescribed in
RKP 2012. Of such sums, 51.5 percent (Rp.594.6 trillion) will be allocated for K/L for
governance operation and the implementation of various development programs. Meanwhile,
the other 48.5 percent (Rp.559.8 trillion) is for state general treasury budget (Non-KL budget),
which in majority will be expended for subsidies and payment of Government loan interests.
Pursuant to Article 11 paragraph (5) Law Number 17 of 2003 concerning State Finance,
budget for central government expenditure will be proportioned by functions, organizations
and types of spendings.
4.4.1 Budget of Central Government Expenditure by Functions
Based on function classification, the allocation of Central Government expenditure budget
will be brokendown into 11 (eleven) functions. This classification aims to illustrate the tasks
of the Government in the pursuit of national development objectives. These functions are:
(1) public service function; (2) defense function; (3) laws and order function; (4) economic
function; (5) environmental function; (7) health function; (8) tourism function; (9) religion
function; (10) education functions; and (11) social protection function. These budget
allocations of Central Government expenditure are further elaborated into various subfunctions, which are basically the compilation of budgets for programs and activities in
every K/L. Activities are the elaboration of program which its formulation reflects the tasks
and functions of echelone II/working unit or particular assignments of K/L containing one
or more activity components to realize the output with measurable performance indicators.
In addition, activities comprise some actions of resources mobilization, either human
resources, materials, including equipment and technology, and fund or in other words,
activities are combination of some or all types of resources as input to produce output in the
forms of goods/services. Working Unit is a business unit performing budget cycle from the
planning and budgeting to reporting.
In 2013, the allocation of central government expenditure by functions is still dominated by
public service function, i.e. 62.4 percent of total budget allocated for Central Government
expenditure, and the remaining 37.6 percent is distributed in several functions such as
economic function, education function, defense function, housing and public facility function,
environmental function, tourism function, religious function and social protection function.
The relatively high portion of budget allocation to public service function indicates that the
implementation of public service function to the people is the main function of the
Government, which includes, among other things, subsidy provision, payment of loan
interest, management and implementation supports of other technical tasks of the
Government, diplomacy, and international cooperation, demographic administration
restructuring community empowerment, regional development and science and technology
research and development. The comparison of budget allocation for Central Government
expenditures by functions in 2012 – 2013 is presented in Table 4.11.
4 -6 0
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
TABLE 4.11
CENTRAL GOVERNMENT EXPENDITURE BY FUNCTION, 2012 - 2013
(trillion rupiah)
2012
NO.
FUNCTION
APBN-P
01
PUBLIC SERVICES
02
2013
% to
GDP
APBN
% to
GDP
659,1
7,7
720,1
7,8
DEFENSE
73,9
0,9
81,8
0,9
03
LAW AND ORDER
33,4
0,4
36,5
0,4
04
ECONOMY
120,1
1,4
122,9
1,3
05
ENVIRONMET
10,7
0,1
12,4
0,1
06
HOUSING AND PUBLIC FACILITIES
29,5
0,3
30,7
0,3
07
HEALTH
15,4
0,2
17,5
0,2
08
TOURISM
3,2
0,0
2,5
0,0
09
RELIGIONS
3,6
0,0
4,1
0,0
10
EDUCATION
115,0
1,3
118,5
1,3
11
SOCIAL PROTECTION
5,6
0,1
7,4
0,1
1.069,5
12,5
1.154,4
12,5
TOTAL
Source: the Ministry of Finance
Budget Allocation of Public Service Function
In 2013, the allocation of budget for public service function reaches Rp.720.1 trillion implying
an increase of some 9.2 percent if compared with its allocation in APBN 2012, which amounted
Rp.659.1 trillion. This sum is for: (1) executive and legislative institutions, finance, fiscal and
foreign affairs sub-function Rp.134.8 trillion (18.7 percent of total public service function);
(2) public service sub-function Rp.12.3 trillion (1.7 percent); (3) basic research and science
and technology development sub-function Rp.2.6 trillion (0.4 percent); (4) Government
loan sub-function Rp.113.3 trillion (15.7 percent); (5) regional development sub-function
Rp2.9 trillion (0.4 percent); (6) public service research and development sub-function
Rp.376.2 billion (0.1 percent); and (7) other public service sub-function Rp.317.6 trillion
(63.0 percent).
Budget allocation to other public services in 2013 is particularly for subsidies and other
transfers. In government loan sub-function, the budget will be used to pay loan interests. As
to executive and legislative institution, financial and fiscal and foreign affairs sub-function
the budget will be used to finance some programs including: (1) support program for the
management and implementation of other technical tasks of the National Police (Polri); (2)
tax revenue improvement and safeguarding program; (3) institutional capacity building
program of House of Representatives of Republic of Indonesia (DPR RI); and (4) statistical
information provision and service program.
The development targets expected to achieve from public service function in 2013 include:
(1) public service quality enhanced with professional service management, integrated human
resources, the introduction of minimum standard service, and comprehensive demographic
data; (2) fuel subsidy channeling with target volume 46 million kilo liter; (3) electrical power
Financial Notes and Indonesian Budget 2013
4 -6 1
Chapter IV
Central Government Expenditure
supply at affordable rate to people; (4) food subsidy and subsidized rice supplies for 15.5
million poor households with 15 kg per target households (RTS); fertilizer subsidy and seed
subsidy consisting of high quality and affordable fertilizers and seeds for farmers; (6) public
transport subsidy for the economic class passengers of railways and sea transport modes;
and (7) improved good governance implementation within government institutions in
integrated, accountable manner and in compliance with and respect to laws.
Budget Allocation for Defense Function
Budget allocation to defense function concerns with the efforts of Government to magnify
the defense capacity of nation to pursue one of national objectives as prescribed in the preamble
of 1945 Constitution, i.e. to protect the nation and Indonesian people. In 2013, budget
allocation to defense function reaches Rp.81.8 trillion for various defense programs
implemented by the Ministry of Defense (including Armed Force Head Quarter, Army, Navy
and Air Force), National Defense Agency and National Defense Council. If compared with
its allocation in APBN 2012 reaching Rp.73.9 trillion, budget allocation for defense function
in 2013 reflects an increase of 10.6 percent. This sum can be further detailed as follows: (1)
national defense sub-function Rp.57.7 trillion (70.6 percent of total budget for defense
function); (2) defense support sub-function Rp.22.9 trillion (28.0 percent); and (3) defense
research and development sub-function Rp.1.2 trillion (1.4 percent).
Budget allocation to national defense sub-function in 2013 can be used to develop integrative
defense, army military force development, navy military force development and air military
force development, maintaining the sovereign and union of the Unitary State of Republic of
Indonesia. In defense support sub-function the allocated budget will be spent to develop
defense system and strategy, and defense technology and industry development. Meanwhile,
in defense research and development sub-function, the budget will be used for defense research
and development and nation defense development.
Budget allocation in defense function in 2013 is expected capable of recording some
achievements including: (1) national defense industries maximized for defense self-reliance
with improved primary weaponry system of Indonesian Armed Forces and National Police
(TNI/Polri) in terms of quantity, quality and variation; (2) more leading roles of Indonesia
in maintaining national security and global peace; (3) primary weaponry system and non
primary weaponry system enhanced including the facilities and infrastructure of army, navy
and air military forces; (4) bolstering defense industries, facilities and infrastructure complying
with the standard qualities and the latest progress of science and technology in self-help
manner; (5) the preparedness of primary weaponry system and non-primary weaponry
system, organization, doctrines, facilities and infrastructure and other supporting power
enhanced coupled with firmer law enforcement and well-secured national sea jurisdiction;
and (6) primary weaponry system modernization and improvement including the associated
facilities and infrastructure to reach the targets set for Air Force power and capacity
development toward minimum essential force (MEF).
Budget Allocation for Laws and Orders Function
Meanwhile, budget for laws and order function reflects the sum of budget allocated to deliver
services to the people in public laws and orders. This allocation relates to the attempts of the
Government in exercising the constitutional mandate, i.e. “to protect the nation and Indonesial
4 -6 2
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
people”. In 2013, budget allocation for laws and orders function is to amount Rp.36.5 trillion
or 9.1 percent higher than its allocation in APBN 2012 recording Rp.33.5 trillion. Budget for
laws and orders function in 2013 consists of: (1) police sub-function Rp.22.8 trillion (62.6
percent); (2) disaster management sub-function Rp.1.4 trillion (3.7 percent); (3) law
development Rp.3.3 trillion (9.1 percent); (4) justice sub-function Rp.5.4 trillion (14.8
percent); (5) laws and orders research and development sub-function Rp.20.8 billion (0.06
percent); (6) other laws and orders sub-function Rp.3.6 trillion (9.8 percent).
Budget allocation for police sub-function in 2013 will be used to finance several program,
including: (1) public laws and orders maintenance program; and (2) Police human resources
empowerment program. Budget in justice sub-function will be spent to finance some programs
such as: (1) constitutional case management program; and (2) general judiciary management
improvement program. Budget of law development sub-function will be expended for the
financing of several programs, i.e.: (1) facility and infrastructure development program for
Attorney General Office; and (2) general criminal case handling and settlement program.
Meanwhile, allocation for other laws and orders sub-function will be used to finance some
programs inclusive of: (1) investigation and national protection and security development
program; and (2) national encryption development program.
Development targets expected to achieve from budget allocation in laws and orders function
in 2013 are: (1) monitoring and early detection capacity of terrorism attack threats improved;
(2) the efficiency of deradicalization process enhanced; (3) Police performance management
function increased in optimum manner to foster Police image; (4) public laws and orders
condition bolstered capable of protecting all Indonesian people in performing their activities
so as to augment living standards, free of any risk, threat and disturbance that may lead to
bodily injuries; (5) public confidence to Police establishments buoyed up as reflected with
police services provided according to Excellent Standard Services of Public Laws and Orders;
(6) crime rates dropped (conventional crimes, transnational crimes, crimes with contingency
implication and crimes to state assets) without impairing human rights; and (7) strategic
measures developed, and potential security disturbance prevented in terms of quality or
quantity until reaching the roots of crimes, disruption and conflicts within the society and
social, political and economic sectors in a manner that will lessen public laws and orders
disturbance .
Budget Allocation to Economic Function
Efforts to accelerate quality economic growth by strengthening economic resilience coupled
with transportation, agriculture, infrastructure and energy development will be funded under
budget allocation to economic function. In 2013, budget allocated for this economic function
amount Rp122.9 trillion, implying an increase of 2.3 percent if compared with its allocation
in APBN 2012 at Rp.120.2 trillion. This sum is for some sub-functions: (1) trade, business,
cooperation and SME development Rp.3.8 trillion (3.1 percent); (2) agriculture, forestry,
fishery and marine sub-function Rp.19.9 trillion (16.2 percent); (3) irrigation sub-function
Rp821.2 billion (0.7 percent); (4) fuel and energy sub-function Rp.13.2 trillion (10.8 percent);
(5) mining sub-function Rp.2.1 trillion (1.7 percent); (6) transportation sub-function Rp.66.3
trillion (54.0 percent); (7) industry and construction sub-function Rp.2.8 trillion (2.3 percent);
(8) manpower sub-function Rp.2.3 trillion (1.9 percent); (9) telecommunication sub-function
Rp.3.2 billion (0.003 percent); (10) economic research and development sub-function Rp.4.0
trillion (3.3 percent); and (11) other economic sub-function Rp.7.6 trillion (6.2 percent).
Financial Notes and Indonesian Budget 2013
4 -6 3
Chapter IV
Central Government Expenditure
Budget allocation to transport sub-function in 2013 will be used to finance some programs,
to wit: (1) road operation program; (2) sea transport management and operation program;
(3) air transport management and operation program; (4) land transport management and
operation program; (5) railways transport management and operation program;(6) policy
coordination program in economic sector. Targets to achieve from budget allocation in
transportation sub-function in 2013 include: (1) capacity and quality of transportation
networks enhanced and integrated in supporting domestic connectivity at national economic
corridors and logistic systems, either connecting production centers and national outlet or in
isolated regions, hinterlands, border areas and frontiers and outer islands; (2)road transport
safety enhanced evident from lower fatality rate in transport accidents; (3) the quality of
transport services in urban areas enhanced with sound transportation network system in 6
big cities; (4) 92.5 percent of national links in good conditions; and (5) efficiency of passenger
and cargo movements enhanced and inter-regional transport service disparities abated.
Meanwhile, budget allocation for agriculture, forestry, fishery and marine sub-function in
2013 will be used to perform various programs, including: (1) agriculture facility and
infrastructure provision and development program; (2) beef self-sufficiency and safe, hygienic,
wholesome and halal animal foods provision program; (3) food crop production, productivity
and quality improvement program for sustainable food self-sufficiency and self-resilience;
(4) capture fishing development and management program; and (5) fish farming production
and fish product competitiveness improvement program. The targets expected to achieve
from budget allocation to agriculture, forestry, fishery and marine sub-function in 2013 are:
(1) basic food self-sufficiency attained and improved toward 10 million ton rice surplus per
annum; (2) the stability of domestic food commodity prices maintained; (3) domestic rice
stocks secured; (4) foodstuff imports controlled, especially rice; (5) inter-region and interseason food distribution improved; (6) farmer exchange rate (NTP) and fishermen exchange
rate (NTN) above 105.0; and (7) fishery production from fish farming and capture fishing
increased.
Budget allocation for fuel and energy sub-function in 2013 will be used to finance some
programs, including: (1) electrical power management program; (2) renewable energy
management and energy conservation program; and (3) oil and gas management and supply
program. Targets expected from budget allocation to fuel and energy sub-function in 2013
are: (1) electrification ratio to rise to 77.60 percent with service coverage expansion and the
construction of transmission network and substation development; (2) electrified village ratio
to reach 97.80 percent; (3) gas fuel infrastructure (SPBG) development in Bali and FEED in
Medan, Cilegon, and Balikpapan; (4) natural oil production to hike to 900 thousand BOPD;
(5) natural gas production to rise to 1,360 thousand BOPD; (6) coal production to increase
to 337 millions tons; and (7) green energy initiatives promotion with intensified renewable
energy consumption.
Budget Allocation for Environmental Function
In 2013, budget allocation to environmental function amounts Rp.12.4 trillion or 15.9 percent
higher than its allocation in APBN 2012 at Rp.10.7 trillion. This sum is further allocated to:
(1) waste management sub-function Rp.3.2 trillion (25.3 percent); (2) pollution mitigation
sub-function Rp.153.7 billion (1.2 percent); (3) natural resources conservation sub-function
Rp.4.7 trillion (38.0 percent); (4) spatial planning and land affairs Rp.3.5 trillion (28.3 trillion);
and (5) other environmental sub-function Rp.891.6 billion (7.2 percent).
4 -6 4
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Illustration of budget allocation in 2013 for some significant sub-functions within
environmental function can be depicted as follows. Budget allocation of waste management
sub-function is mainly used for Settlement Infrastructure Improvement and Development
Program. Budget of natural resources conservation sub-function is particularly to finance
some programs, such as: (1) community empowerment based whatershed (DAS) function
and carrying capacity development program; and (2) biodiversity conservation and forest
protection program. Meanwhile, allocation to spatial planning and land affairs sub-function
is mostly for: (1) national land management program; and (2) spatial planning program.
The implementation of programs under this function is designed to enhance the quality of
environment as parts of climate change impact mitigation and adaption.
Consistent with the allocated budget, the targets expected from environmental function in
2013 are: (1) spatial information improved in terms of quality and quantity with greater
priority given to the provision of spatial data to support regional development along economic
corridors and other priority development zones (KEK and KAPET); (2) access to spatial data
and information improved; (3) operational regulation for Law Number 26 of 2007 concerning
Spatial Planning finished and complete; (3) land asset legalization charged to the Government
for around 884,050 parcels of land realized; (4) forest resources conservation and rehabilitation
improved with the completion of forest demarcation (outer and functional boundaries) 19,000
km, and the operation of 30 Forest Management units, forest and land rehabilitation of
500,000 ha, and the preparation of Integrated Watershed (DAS) management Plans in 11
priority DAS; (5) the population of endangered priority species population increased to 0.5
percent; (6) hotspots in Kalimantan, Sumatra and Sulawesi to decrease by 59.2 percent and
burned forest areas to lower by 40 percent from avarage rate in 2005 – 2008; (7) social
problems beyond the affected area maps dealt with based on review of integrated team as
established in Perpres Number 37 of 2012; and (8) frontage development for the relocation
of arterial links and Kota Surabaya PDAM pipelines.
Budget Allocation for Housing and Public Facility Function
In 2013, budget for housing and public facility function of Central Government expenditure
reaches Rp.30.7 trillion or 4.3 percent higher than its realization in APBN 2012 of Rp.29.5
trillion. This sum consists of: (1) budget allocation for housing development sub-function
Rp.4.1 trillion (15.2 percent); (2) settlement community empowerment sub-function Rp.3.8
trillion (12.3 percent); (3) water supply sub-function Rp.5.5 trillion (18.0 percent); and (4)
other housing and public facility Rp.17.3 trillion (56.3 percent).
Budget allocation in some significant sub-function of housing and public facility function in
2013 can be illustrated as follows. Budget for housing development sub-function is mainly
for housing and settlement zone development program. Meanwhile, allocation to the
settlement community empowerment sub-function has been particularly expended for
settlement infrastructure improvement and development and housing and settlement zone
development program. As to budget proceeds allocated to water supply sub-function, they
have been mostly used to finance settlement infrastructure improvement and development
program. Budget allocated to other housing and public facilities is for community
empowerment program and settlement infrastructure improvement and development
program.
Financial Notes and Indonesian Budget 2013
4 -6 5
Chapter IV
Central Government Expenditure
Targets expected from housing and public facility function in 2013 include: (1) the construction
of 183 multi-storey blocks (rusunawa); (2) facilitation and simulation for the construction
of 20,000 units of self-helf houses; (3) facilitation and stimulation for quality improvement
of 230,000 units of self-help houses; (4) facilitation for the construction of 60,000 housing
and settlement complexes; (5) the development of rural SPAM (water Supply System) in
1,610 villages; (6) the development of waste water infrastructure in 567 areas; (7) the
expansion of national raw water supply capacity by 12.2 M3/second extracted from: BREGAS,
Telaga Waja of Kabupaten Karangasem, Kabupaten Tanjung Jabung Timur; (8) the
construction of raw water reservoir in Galang Batang of Bintan island; (9) acceleration for
water conveyance development preparation in Jatiluhur, Karian, Bandung, Semarang and
Cilegon; (10) the development of Ground Water Pump Irrigation Networks in West Java,
Aceh, West Kalimantan, and NTT; and (11) improved accessibility of low-income households
to decent and affordable settlement facilities.
Budget Allocation to Health Function
Budget allocation of health function in 2013 is to amount Rp.17.5 trillion implying an increase
of 13.8 percent higher than the allocation in APBN 2012 at Rp.15.4 trillion. Budget for health
function comprises: (1) medicine and health logistics sub-function Rp.2.8 trillion (16.2 percent
of total Health Function budget); (2) individual health service sub-function Rp.10.0 trillion
(57.2 percent); (3) public health service sub-function Rp.1.4 trillion (7.7 percent); (4)
demography and family planning sub-function Rp.2.6 trillion (14.9 percent); (5) health
research and development sub-function Rp.435.0 billion (2.5 percent); and (6) other health
sub-function sub-function Rp.252.2 billion (1.4 percent).
Targets expected from budget allocation to health function in 2013 include: (1) access to
quality health and nutrition services for mothers and children improved; (2) contagious and
non-contagious disease control and neighborhood sanitation improved; (3) health operators’
professionalism fortified and maximized; (4) health insurance improved; (5) the safety,
efficacy and quality of domestic medicine and food and health equipment enhanced; and (6)
access to quality family planning service expanded.
Budget Allocation for Tourism Function
In 2013, budget allocation for tourism function is to reach Rp.2,5 billion. This sum is an
increase of around 3.2 percent if compared with its allocation in APBN 2012 Rp3,2 trillion.
The said proceeds are further expended to: (1) tourism promotion sub-function Rp.714,4
billion (28,5 percent of total tourism function); (2) publication and broadcasting development
sub-function Rp.9.6 billion (0.4 percent); (3) competition sport development sub-function
Rp.560.0 billion (22.3 percent); (4) tourism research and development Rp.15.7 billion (0.6
percent) and (5) other tourism sub-function Rp.1.2 billion (48.2 percent).
Budget allocation for tourism promotion sub-function in 2013 is mainly for tourism
destination development progam and tourism marketing program. As to budget to
competition sport development sub-function this allocation aims to elevate the achivements
in sport competition. Meanwhile for other tourism sub-function the budget is allocated to
some programs including: (1) Management and Implementation Support Program for other
Technical Tasks of the Ministry of Tourism and Creative Economy and (2) History, Archeology
and Museum Program.
4 -6 6
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Targets to pursue from tourism function in 2013 are inclusive of: (1) number of foreign
tourists to increase to 9.0 million persons and number of domestic tourist movements to rise
at 250.0 millions travels; (2) the contribution of tourism sector to the employment of national
workforce to reach 8.4 million persons; (3) the contribution of tourism sector to GDP to
increase to 4.2 percent; (4) investment value to total national investment to augment to 4.6
percent; (5) foreign exchange earned from foreign toursist to surge up USD10.4 billion; (6)
the spendings of domestic tourists to rise to Rp.175.0 trillion; and (7) research resources
capacity to elevate.
Budget Allocation to Religion Function
The Government has great concerns on the religious life among varying social groups. The
majority of people has passion and strong desire to understand, comprehend and implement
their own religious tenets, while it must be admitted that some other groups have yet to do
that. In addition, the varying religions and beliefts is potential to spark conflicts that may
disrupt religious life harmony and concord. In addition, the obligation of the Government to
provide decent and non-discriminatory worship facilities is manifested with budget allocation
to religion function.
Budget allocated to religion function in 2013 is to reach Rp.4.1 trillion. It implies an increase
of 14.6 percent higher that its allocation in APBN 2012 at Rp.3.6 trillion. The proceeds are
further distributed to: (1) religious life improvement sub-function Rp.1.3 trillion (32.9 percent
of total religion function budget); (2) religious life harmony sub-function Rp.65.5 billion
(1.6 percent); (3) religion research and development sub-function Rp.2.0 trillion (48.3
percent); and other religious service sub-function Rp.705.0 billion (17.2 percent).
In 2013, budget allocation for religious life improvement sub-function is used to advocate
religious development and guidance to the communities. Budget allocated to religious life
harmony sub-function has been totally used to support the management and implementation
of other technical tasks of the Ministry of Religions. In other religious service sub-function,
the budget is allocated for Islamic community development program. As to budget allocation
of religious research and development sub-function the proceeds are expended to perform:
(1) Islamic community development program; (2) hajj pilgrimate development and
management program; and (3) research and development, education and training program
for the Ministry of Religions.
Budget allocation to religion function 2013 is aimed to pursue the following targets: (1)
quality and capacity of guidance and counseling on the implementation of religious tenets in
families and society enhanced; (2) social harmony evident from intensive inter-faith dialogue
and cooperation improved; (3) quality and professionalism in hajj pilgrimage management
enhanced; and (4) better religious development governance.
Budget Allocation of Education Function
Budget allocated to education function reflects the earnest attention of the Government in
delivering services to the communities in education sector. Budget allocation of education
function relates to the Government’s attempt in exercising constitutional mandate of allocating
minimum 20 percent of APBN in education sector. In 2013, this budget is to reach Rp.118.5
trillion or 3.0 percent higher than its allocation in APBN 2012 of Rp.115.0 trillion. These
proceeds are then further allocated to: (1) elementary education sub-function Rp.29.0 trillion
Financial Notes and Indonesian Budget 2013
4 -6 7
Chapter IV
Central Government Expenditure
(24.5 percent of total education function budget); (2) secondary education sub-function
Rp.8.2 trillion (6.9 percent); (3) tertiary education sub-function RP.38.2 trillion (32.2 percent);
(4) aid service sub-function to education sector Rp.11.9 trillion (10.0 percent); (5) non-formal
and informal education sub-function Rp3.7 trillion (3.1 percent); (6) religious sub-function
Rp.2.8 trillion (2.3 percent); (7) other education and culture sub-function Rp.19.3 trillion
(16.3 percent); (8) childhood education sub-function Rp.1.2 trillion (1.0 percent); (9) official
education sub-function Rp.835.2 billion (0.7 percent); (10) education research and
development sub-function Rp.1.2 trillion (1.0 percent); (11) youth and sport development
sub-function Rp.1.1 trillion (0.9 percent); and (12) culture development sub-function Rp.1.3
trillion (1.1 percent).
In 2013, budget allocation to elementary education sub-function will be spent to perform
compulsory education program at elementary level. For the budget allocated to secondary
education, it is expended to carry out secondary education level. Accordingly budget procceds
for tertiary education is used to fund the implementation of tertiary education. In nonformal and informal education sub-function the allocated budget is used to finance library
development program. In case of aid service sub-function to education sector, the budget
will be used to finance: (1) PTK profession and education quality assurance program; and
(2) language and letter improvement and development program.
Targets expected from budget allocation to education function in 2013 are inclusive of: (1)
access rate to quality education service enhanced evident from: (i) higher average school
participation rate of 15 years old and over population to 8.25 years; (ii) lower illiteracy rate
among the 15 years old and over population to 4.4 percent; (iii) higher APM SD/SDLB/MI/
Package A to 95.8 percent; (iv) higher APM SMP/SMPLB/MTs/package B to 80,1 percent;
(v) higher APK SMA/SMK/MA/Package C to 82.0 percent; and (vi) higher APK university
for 19-23 years old population to 28.7 percent; (2) national education standard (SNP) for
religious and religiousity education in elementary and secondary education units achieved;
(3) nation character building education in education units implemented; (4) the relevance
of secondary and tertiary education graduates and development demands increased; and (5)
professionalism and distribution of teachers and pedagogical staff augmented marked with
more teachers holding qualification minimum S1/D4 degree and higher percentage of certified
teachers.
Budget Allocation of Social Protection Function
Budget allocation for social protection function in 2013 is to amount Rp.7.4 trillion implying
an increase of 33.5 percent if compared with its allocation in APBN 2012 at Rp.5.6 trillion.
This budget is further allocated to: (1) social protection and service sub-function for ailing
persons and the disabled Rp.326.0 billion (4.4 percent of total social protection function
budget); (2) social protection and services to the elder Rp.148.3 billion (2.0 percent); (3)
social protection and services sub-function to children and households Rp.501.1 billion (6.8
percent); (4) women empowerment sub-function Rp.191.8 billion (2.6 percent); (5) social
aids and insurance sub-function Rp.33.9 billion (0.5 percent); (6) social protection research
and development sub-function Rp.269.9 billion (3.6 percent); and (7) other social protection
sub-function Rp.5.9 trillion (80.2 percent).
Targets expected from the allocation of budget to social protection function in 2013 are: (1)
Gender Mainstreaming implementation policy in political and decision making and manpower
4 -6 8
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
affairs established; (2) Gender Mainstreaiming implementation policy and women protection
to any and all violence facilitated; (3) gender segregated data system applied; (4) policy on
the eradication of violence to children facilitated; social insurance service quality for the
poor and vulnerable people enhanced.
4.4.2 Budget of Central Government Expenditure by
Organizations
Of budget proceeds allocated for Central Government expenditure worth Rp. 1,154.4 trillion,
allocation to the ministries/agencies (K/L) reaches Rp.594.6 trillion or 51.5 percent of total
Central Government Expenditure. Meanwhile, the other Rp.559.8 trillion or 48.5 percent
are for non-KL spending (State General Treasurer Budget Section = BA SUN).
4.4.2.1 Ministries/Agencies Budget Section (BA K/L)
In 2013, there are 86 ministries/agencies with
GRAPH 4.38
K/L EXPENDITURE BUDGET TREND, 2007-2013
separate budget sections. They consist of: (1)
33 ministries; (2) three coordinating
ministries; (3) six state institutions; (4) 38
government agencies; and (5) six
commissions. Out of them, 10 (ten) K/L are
the recipients of the largest budget sections.
It is consistent with the changing fiscal policy
orientation in 2011 – 2014, which is more
focused on stimulation aspects to the
economy (pro-growth, pro-job, dan propoor) than fiscal consolidation as adopted in previous period. In ABPN 2013, ten K/L with
the largest budget allocations form 75.5 percent of total K/L budget. They are: (1) the Ministry
of Defense (13.8 percent of K/L budget); (2) the Ministry of Public Works (13.1 percent of K/
L budget); (3) the Ministry of Education and Culture (12.3 percent of K/L budget); (4) the
National Police of Republic of Indonesia (7.7 percent of K/L budget); (5) the Ministry of
Religions (7.4 percent of K/L budget); (6) the Ministry of Transportation (6.2 percent of K/
L budget); (7) the Ministry of Health (5.8 percent of K/L budget); (8) the Ministry of Energy
and Mineral Resources (3.2 percent of K/L budget); (9) the Ministry of Finance (3.1 percent
of K/L budget); (10 The Ministry of Agriculute (3.0 percent of K/L budget).
Trillion (Rp)
700,00
600,00
6,4
6,4
5,7
5,2
Percent
7,00
5,6
5,5
6,00
5,2
500,00
5,00
400,00
4,00
300,00
547,9
417,6
200,00
100,00
3,00
594,6
259,7
225,0
307,0
2,00
332,9
1,00
-
-
2007
2008
2009
2010
2011
K/L Expenditure
APBNP
2012
2013
% to GDP
Source: the Ministry of Finance
GRAPH 4.39
TOP 10 K/L WITH LARGEST BUDGET ALLOCATION, 2011-2013
GRAPH 4.40
TOP 10 K/L WITH LARGES BUDGET ALLOCATION , 2013
Triliun (Rp)
90,00
Min.Religion 07%
82,0
78,0
75,0
80, 00
72,9
Min.Transport 06%
Police 08%
77,2
73,1
Min.Health 06%
Min.EDSM 03%
70,00
61,1
Min.Finance 03%
60,00
51,2
Min.Edu&Culture 12%
51,3
45,6
50,00
40,00
34, 4
39,4
38,1
33,2
36,7
34,6
Min. Public Work 13%
31,2
30,00
26,9
20,1
20,00
Min.Agriculture 03%
44,0
41,9
16,3
18,2
16,9
18,8
14,9
Min. Defense 14%
9,0
10,00
Others 25%
17,1 17,8
16,0
Min. Defense
LKPP 2011
Min. PW
Min.Edu&Cul
APBNP 2012
Police
Min.Religions Min.Transport
Min.Health
Min.ESDM
Min.Finance Min.Agriculture
APBN 2013
Source: the Ministry of Finance
Financial Notes and Indonesian Budget 2013
Source: the Ministry of Finance
4 -6 9
Chapter IV
Central Government Expenditure
According to policy directions and strategic targets to pursue in 2013 and in view of problems
and challenges to be dealt with in 2013 the theme of national development in RKP 2012 is:
“Reinforcing Domestic Economy for People’s Welfare Augmentation and Expansion”. From
such theme, 11 national priorities are established in RKP 2013, to wit: (1) Bureaucracy and
Governance Reform; (2) Education; (3) Health; (4) Poverty Alleviation; (5) Food Resilience;
(6) Infrastructure; (7) Investment Climate and Business Climate; (8) Energy; (9)
Environment; (10) Underdeveloped Regions, the Frontiers, Outer Islands and Conflict –
Torn Regions with focus directed to development acceleration in Papua, West Papua and
NTT; and (11) culture, creativity and technology innovation. In addition there are other
three priorities, i.e.: (1) politic, law and security affairs; (2) economic affairs; and (3) people’s
welfare affairs. Such priorities, programs and activities prescribed in RKP 2013 will serve as
references in working out development policies including the work and budget plan of
ministries/agency (RKA – K/L).
In 2013, K/L Work Plan is prepared with the adoption of performance based approach,
integrated medium term expenditure and budgeting framework containing policies, programs
and activities including for subsidies, public service obligation (PSO) and other special
spendings, which are not inseparable from the said K/L policies.
To support the realization of various development targets in 2013 coupled with efficiency
and effectiveness, the allocation of K/L budget is made with reference to K/L expenditure
policies in 2013 including: (1) to enhance the efficiency of K/L expenditure with the
introduction of flat policy for operational spendings and refining the composition of priority
spendings; (2) to improve the effectiveness in budget allocation for Armed Forces’ primary
weaponry system so as to achieve minimum essential force (MEF) subject to the financial
capacity of the Government; (3) to reinforce the synergy of Central – Region on funding
and regulation affairs including DAK (Special Allocation Fund), deconcentration fund, and
co-administration tasks; and (4) to implement affirmative actions, especialy for the
development of underdeveloped regions/outer islands, and small and creative industries and
support to the development of traditional pilot markets including village markets.
In addition, K/L expenditure policies will be focused to support the implementation of president
directives consisting of: (1) Masterplan for the Acceleration and Expansion of Indonesian
Economic Development (MP3EI); (2) Masterplan for the Acceleration and Expansion of
Poverty Alleviation (MP3KI); (3) domestic connectivity acceleration; (4) the strengthening
of four development clusters; (5) the attainment of energy resilience; and (6) the reinforcement
of food resilience, including to achieve 10 million tons rice surplus by 2014.
To support the realization of strategic targets, policy directions and national development
priorities, budget allocation to K/L is planned to hit Rp,594.6 trillion. These proceeds will be
used to give funding support for various development programs of K/L respective of their
tasks and functions within development priority framework established in RKP 2013.
One problem hampering effective K/L spendings concerns the lackluster performance in
budget absorbtion. To cope with this low budget absorption, the solutions proposed by the
Government are: (1) revising goods and service procurement mechanism with amendment
to Keppres Number 80 of 2003 to Perpres Number 54 of 2010; (2) improving budget
implementation mechanism with the amendment of Keppres Number 42 of 2002 to Perpres
Number 53 of 2010; (3) simplifying budget revision procedure with the issuance of Regulation
4 -7 0
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
of Finance Minister (PMK) Number 49 of 2012 concerning Procedure for Budget Revision in
2012; (4) accelerating project activity invoicing by contractors with the issuance of PMK
Number 170 of 2010 concerning the settlement of State Budget (APBN) Liabilities at Working
Units; (5) simplifying DIPA (Budget Allocation List) format to enhance flexibility of K/L in
implementing budget; and (6) integrating K/L Work Plan (RKA-K/L) database and DIPA to
speed up DIPA release.
Thereafter, to apply planning and budgeting reform, the Government has introduced planning
and budgeting reform in phases executed in three stages, to wit: (1) introduction stage (20052009); (2) maintenance stage (2010-2014) and (3) improvement stage (2015 and beyond).
To buttress the implementation of such budgeting reform, for APBN 2013 preparation, the
Government has revised the costing methodology and introduced efficiency dividend that
will make budget in 2013 more efficient. Moreover, during the preparation of APBN 2013,
review of forward estimate in 2012 has been made as baseline figures in 2013 budget.
To support the implementation of Article 108 Law Number 33 of 2004 concerning Fiscal
Balance of Central Government and Regional Governments with regard to deconcentration
fund and co-administration tasks that have been delegated to regions under Special Allocation
Fund (DAK), some initiatives have been made in phases to transfer such funds until 2014.
For 2013, budget for deconcentration and co-administration of the Ministry of Agriculture
had been transferred to DAK of APBN 2013. The transfer of K/L programs and activities into
DAK will be established under a Presidential Regulation (Perpres), which its drafting is still
underway. This Perpres will contain regulations on technical supervision and directives of
K/L to regions to assure that the national priority targets under the responsibility of K/L
concerned to regions can be accomplished, for which reward and punishment mechanism
will be applied. Regions fail to execute the DAK as specified in the regulations will be liable
for sanctions.
To fortify discipline and performance of K/L in 2013 based on Presidential Regulation
(Perpres) Number 39 of 2012 concerning Reward and Punishment for the Implementation
of Ministries/Agencies Expenditure Budget, the Government will continue introducing such
reward and punishment system. The Government will give reward of additional ceiling to
K/L if they are able to optimize the use of budget or to reach the specified targets at lower
costs than that planned in 2012 budget. Otherwise, K/Ls that fail to absorb the budget and
unable to meet the specified targets with unacceptable grounds will be punished with lower
ceiling. It is expected that this reward and punishment mechanism will increase K/L
performance either in terms of planning or implementation and the APBN becomes more
efficient. Based on the above mentioned K/L expenditure policy directions and in view of the
available fiscal room, activity focuses and targets to pursue in 2013, budget allocation plan
including the programs and targets of 10 (ten) K/L with the largest allocations will be
presented in narration. As for other K/L budget allocation, program and target plans they
can be seen in Matrix 4.1.
The Ministry of Defense
In RAPBN 2013, the Ministry of Defense will receive budget allocation Rp.82.0 trillion. The
proceeds will be used to reach the vision of the Ministry of Defense, i.e. “Realizing Sturdy
National Defense” and the associated missions , i.e. “to maintain the sovereignty and union
of the Unitary State of Republic of Indonesia (NKRI) and nation safety”. The said budget is
Financial Notes and Indonesian Budget 2013
4 -7 1
Chapter IV
Central Government Expenditure
to increase by Rp.9.0 trillion or 12.4 percent if compared with budget ceiling allocated for the
Ministry of Defense in APBNP 2012 at Rp.72.9 trillion.
This budget allocation comes from rupiah of Rp.68.6 trillion, foreign and domestic loans
Rp.13.4 trillion to carry out some programs including: (1) defense technology and industry
development program; (2) integrative use of defense force program; (3) Army Military Force
readiness support program; (4) Modernization Program on Alutsista and Non Alutsista /
Navy Military Force Facility and Infrastructure; and (5) Modernization Program on Alutsista
(Main Equipment for Defense System) and Non Alutsista And Air Military Force Facilities
and Infrastructure Development.
Performance indicators of the foregoing programs are: (1) number of the domestically
produced main weapons for the Armed Forces increased by 30 percent; (2) the percentage of
laws and orders operation increased in terms of quality and quantity by 46 percent; (3)
percentage of personnel, material and documentary safety operation and early warning
detection effectiveness and efficiency increased to reach 58 percent; (4) percentage of additional
material for strategic primary weaponry system of the Armed Forces increased in accountable
and timely manner to reach 12 percent; and (5) MEF of air military force reached at 28
percent.
Based on policies and programs to be performed by the Ministry of Defense in 2013, the
outcomes expected from policies, programs and activities of the Ministry of Defense in 2013
include: (1) demands on domestically produced main weaponry syatem met in phases; (2)
the use of integrative defense force capable of identifying, deterring, preventing threaths in
integrated, effective and timely manner; (3) the readiness of main weaponry system and
the associated facilities and infrastructure to achieve the targets of Army Force strenght and
capability development toward MEF; (4) Navy military strenght and capability increased
and ready to operate to support the given tasks according to the specified standards and
demands, with high supporting, deterrent and combating capabilities; and (5) main weaponry
system modernization and improvement including the facilities and infrastructure to reach
targets of Air Force Military strenght and capability development toward MEF.
The Ministry of Public Works
National infrastructure development with sound supporting and driving capacities to just
and pro-people economic and social growth throughout the archipelago with active
participation of all Indonesian people is the theme advocated in RKP 2013 and serving as
reference for the Ministry of Public Works in establishing some development priorities i,e,
poverty alleviation, food shortage management, investment climate and business climate,
energy, environment and disaster management and the development of under developed
regions, the frontiers, outer isaland and conflict torn regions. Development policy directions
of the Ministry of Public Works in 2013 is focused to pursue its vision, i.e. “to provide reliable
public works and settlement infrastructure to support Prosperous Indonesia 2015”.
The Ministry of Public Works in APBN 2013 is planned to receive budget Rp.78.0 trillion
coming from rupiah sources Rp.70.1 trillion, non-tax revenue and public service agencies
Rp.45.6 billion and foreign loans and grant Rp. 7.8 trillion used to execute a number of
programs including: (1) construction development program; (2) settlement infrastructure
improvement and development program; (3) road operation program; (4) spatial planning
program; and (5) water resources development program.
4 -7 2
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
The performance indicators for the implementation of the said program are: (1) regional
construction service developed in 33 regions; (2) rural settlement area infrastructure developed
in 185 village with the number of villages served by water supply infrastructure to record
1,610 villages; (3) toll road of 19 km long constructed and the other 34,368 km long of roads
and 226,500 m long of bridges preserved; (4) spatial planning synchronized to its development
program in 32 provinces; and (5) irrigation networks serving 111,729 ha areas constructed/
improved and 46,061 ha of swamp networks developed/improved.
Based on policies and programs to be performed by the Ministry of Public Works in 2013, the
expected outcomes are to include: (1) capacity and performance of central and regional
construction service providers enhanced; (2) number of cities introducting the norms,
standards, procedure and criteria of settlement area development according to the specified
spatial planning and the number of areas served with settlement infrastructure increased;
(3) facilitation for regional road operation improved toward 60 percent in good condition;
(4) consistency of development plans (national and regional) with regional spatial planning,
consistency of infrastructure development program and national spatial planning (especially
for public works and settlement infrastructure); and (5) water resources management
performance improved.
The Ministry of Education and Culture
Theme promoted in education sector as indicated in RKP 2013 is “improving access to quality,
affordable, relevant and efficient education toward prosperity, self-reliance, lofty and strong
nation characters”. Education development is focused to attain economic growth coupled
with the proportional balance of educated workforce and capacity of: (1) creating employment
or promoting enterpreneurship and (2) responding challenges of manpower demands.
To reach the vision of the Ministry of Education and Culture, i.e. “to deliver excellent national
education services to forge smart and comprehensive Indonesian people”, in APBN 2013,
the Ministry of Education and Culture is planned to receive budget allocation of Rp.73.1
trillion. The budget will come from rupiah sources Rp.58.6 trillion, non-tax revenue/public
service agency Rp.12.5 trillion, and foreign loans Rp.1.9 trillion to conduct various programs,
inclusive of: (1) research and development program within the Ministry of Education and
Culture; (2) basic education program; (3) secondary education program; (4) tertiary education
program; (5) profession development program for teachers and pedagogical staff and
education quality supervisors; and (6) culture preservation program.
Performance indicators for the implementation of such programs are: (1) the percentage of
curriculum development and application effectiveness through monitoring, evaluation and
controlling to reach 78.67 percent; (2) the percentage of districts/cities having minimum
one extraordinary elementary school (SDLB), 82.4 percent, and the beneficiaries of school
aids for students of poor households to record 9.6 million students of elementary/extraordinary
elementary and junior secondary/extraordinary junior secondary schools (SMP/SMPLB)
and 1.6 million of senior secondary/vocational schools (SMA/SMK); (3) SMA/SMK students
to receive quality management operation aids (BOOM)/pioneer BOS; (4) 5 new universities
established and 98 working units (satker) receiving community fund set up; (5) certified
teachers for SD/SDLB to reach 57.5 percent and certified teachers for SMP/SMPLB 60.0
percent; and (6) 1,000 documented museums
Financial Notes and Indonesian Budget 2013
4 -7 3
Chapter IV
Central Government Expenditure
Based on policies and programs to be executed by the Ministry of Education and Culture in
2013, the expected outcomes are: (1) learning model, data and information and PAUD quality
standards, basic education, secondary education and tertiary education and adult education
and their accreditation available; (2) coverage and distribution of access to quality TK/TKLB,
SD/SDLB, and SMP/SMPLB without any gender based discrimination and relevant to the
needs of communities in all provinces, kabupaten (districts), and cities expanded; (3) coverage
and distribution of access to quality SMA, SMK, SMLB without any gender based
discrimination and relevant to the needs of communities in all provinces, districts and cities
expanded; (4) coverage and distribution of access to quality and internationally competitive
higher education without any gender based discrimination and relevant to the needs of nation
and state expanded; (5) professionalism of teachers and pedagogical staff enhanced and
education quality assured according to national education standards (SPN); and (6) inventory
and protected cultural works increased.
The National Police of Republic of Indonesia
The National Police of Republic of Indonesia (Polri) in performing their strategic plan 20102014 promotes vision: “Realizing excellent public laws and orders services, firm law
enforcement and solid domestic security and pro-active police synergy”. In efforts to
materialize such vision, Polri carries some missions, i.e.: early detection and warning through
investigation, safeguarding and mobilization activities/operation; (2) delivering simple,
responsive and non discriminatory protection, caring and services; (3) maintaining public
laws and orders and traffic flows to assure safe passenger and goods movements; (4) securing
in the maintenance of domestic security; (5) developing public police based on law abiding
communities; (6) professional, objective, proportional, transparent and accountable law
enforcement to assure legal certainty and justice; (7) managing overall Polri’s resources in
professional, transparent, accountable and modern manner to support operational tasks of
the national police; and (8) developing inter-departmental and international policy synergy
system as well as with social components to foster partnership building/networking.
In the pursuit of such vision and missions, the National Police of Republic of Indonesia
(Polri) in APBN 2013 is planned to receive budget of Rp.45.6 trillion. This sum implies an
increase of Rp.3.7 trillion or 8.9 percent higher than its allocation of Polri’s budget in APBNP
2012 recording Rp.41.9 trillion. The said budget comes from rupiah sources Rp.38.7 trillion,
PNBP (non-tax revenue) and BLU (Public Service Agency) Rp.4.7 trillion, PLN/PDN (Foreign
and Domestic Loans) Rp.2.2 trillion to execute several programs, including: (1) research and
development program within the Polri; (2) public laws and security strategy development
program; (3) public laws and security maintenance program; (4) criminal probe and
investigation program; and (5) domestic serious security threat mitigation program.
With such budget support and program plan, performance indicators for the implementation
of the foregoing programs are: (1) 12 prototype and review review reports prepared; (2) 12
services of each strategic public laws and orders services and regional laws and orders services
provided; (3) lower percentage of security disturbance along public activity routes notably in
sea transport: coast guard and national/international ports security, by 11 percent and policy
operations being the priority needs of public to record 12 operations; (4) terrorism criminal
cases and clearance rate at national level to reach 102 percent and criminal case and clearance
rate at national level to reach 57 percent; and (5) 12 regional domestic security management
reports;
4 -7 4
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Based on programs and activities to be executed by Polri in 2013, the expected outcomes are:
(1) technology based police equipment capable of dealting with various criminal trends; (2)
early detection of potential security disruption that may spark public unrest as earlier
anticipation can be made; (3) well-maintained and improved public law and order conditions
to protect overall citizens in performing their activities for living standard augmentation free
from any and all risks, threaths and disruptions that may cause bodily injuries; (4) various
types of crimes coped with and decreased (conventional crimes, transnational crimes, crimes
with contingency implications and crimes against state assets) without violating human
rights; and (5) peaceful people from any law and order disturbance, particularly the serious
criminal threats (mass riots and organized crimes).
The Ministry of Religions
Development objectives to pursue from religious affairs by the Ministry of Religions are to
realize Indonesian citizens who are religiously pious, modern, prosperous, well-educated
and mutually respect with others in social, nation and state life within the Unitary State of
Republic of Indonesia. These objectives are focused to reach the vision of the Ministry of
Religions, i.e. “to forge religiously pious, harmonious, well-educated, self-reliant and spiritually
and materially prosperous Indonesian citizens”. To materialize such vision, the Ministry of
Religion in APBN 2013 will receive budget allocation of Rp.44.0 trillion. This sum is Rp.4.6
trillion of 11.6 percent higher than allocation ceiling for the Ministry of Religions in APBNP
2012 recording Rp.39.4 trillion. This budget comes from rupiah sources Rp.42.8 trillion,
non-tax revenue/public service agency (PNBP/BLU) Rp.856.4 billion, and foreign loans
Rp.270.1 billion to execute several programs of, among other things: (1) hajj and umrah
pilgrimage management program; (2) Islamic education program; (3) Christian community
development program; (4) Catholic community development program; (5) Hindu community
development program; and (6) Buddha community development program.
Performance indicators of the above mentioned programs include: (1) hajj dormitory facility/
information and public relation center for embarkartion and information and public relation
center (PPIH) in Saudi Arabia consisting of 15 locations and 1,534 persons rehabilitated; (2)
the beneficiaries of School Operation Aids (BOS) for Madrasah Ibtidaiyah (MI) students
and Madrasah Tsanawiyah (MTs) to reach respectively 3,310,000 persons and 2,762,000
persons; (3) the benefiaries of scholarship facility for university students from low-income
households to reach 1,000 persons and certified teachers of Christianity to reach 1,000
persons; (4) the beneficiaries of scholarship facility for university students from low-income
households to reach 2,000 persons and aids for 215 Catholic worship places; (5) the benefiaries
of scholarship facility for university students from low-income households to reach 2,500
persons and certified Hindu teachers to reach 1,500 persons; and (6) the benefiaries of
scholarship facility for university students from low-income households to reach 100 persons
and certified Buddha teachers to reach 510 persons.
Based on policies and program to be executed by the Ministry of Religions in 2013, the expected
outcomes will include: (1) the quality of hajj and umrah pilgrimate services and its information
system enhanced; (2) access, quality and competitiveness of Islamic education improved;
(3) quality of social counseling for Christian communities and Christian education enhanced;
(4) quality of social counseling for Catholic communities and Catholic education enhanced;
(5) quality of social counseling for Hindu communities and Hindu education enhanced; and
(6) quality of social counseling for Buddha communities and Buddha education enhanced.
Financial Notes and Indonesian Budget 2013
4 -7 5
Chapter IV
Central Government Expenditure
The Ministry of Transportation
Programs and activities of the Ministry of Transportation will be directed to reach its vision,
i.e. “to deliver reliable, competitive and added value generating transportation services”.
Reliable transport services are indicated with safe, timely, well-maintained, adequate transport
operation covering regions accross the country and able to support national development
within the Unitary State of Republic of Indonesia (NKRI). To pursue such vision, the following
missions are then formulated: (1) to increase transportation safety and security in attempt
to improve transport services; (2) to improve the accessibility of public to transportation
services to support inter-region connectivity; (3) to enhance the performance of transportation
services; (4) to continue consolidation with restructuring and reform in regulations,
institutions and human resources, and consistent law enforcement; and (5) to develop ecotransportation technology as anticipation to climate change.
To realize the Government program consistent with Government Development Plan (RKP)
2013 i.e. “Reinforcing Domestic Economy for People’s Welfare Augmentation and Welfare”
and to implement development stages as formulated in the fourth RPJMN 2005 – 2025
focusing on NKRI strengthening, human resources quality enhancement, and science and
technology development to fortify economic competitiveness, the Ministry of Transportation
will take leading roles in national development priorities for the building of competitive
domestic economy through agriculture, infrastructure and energy development, particularly
to enhance the quality and capacity of transporatation infrastructure development according
to the established minimum service standard, to buttress the support of transportation
infrastructure to the competitiveness of real sector and to promote investments on
transportation infrastructure development and expansion under Public Private Partnership.
In light of that, the Workd Plan of the Ministry of Transportation in 2013 is prepared with
focuses directed on transporation improvement and development policies as an effort to
support new initiatives as leverage for the acceleration and expansion of national economic
growth covering: (1) Masterplan for the Acceleration and Expansion of Indonesia’s Economic
Development (MP3EI) 2011-2025; (2) Masterplan for Indonesia’s Poverty Alleviation
Acceleration and Expansion (MP3KI) 2011-2025; (3) Development Acceleration for Papua
and West Papua; (4) sustainable development mainstreaming with national action plan of
Reducing Emissions from Deforestation and Forest Degradation; and (5) employment
generation.
In view of the foregoing conditions, the strategic targets of transportation development
according to Perpres 45/2012 on RKP 2013 concern with strategic issues of fortifying
competitiveness with infrastructure development acceleration that will support domestic
connectivity, i.e.: (1) to realize national navigation fleet segment for domestic routes reaching
100 percent; (2) to reach railway cargo transport segment of 3 percent and railway passengger
transport segment of 10 percent; and (3) domestic air passenger transport to grow by 11.5
percent/annum and 13 percent/annum for international air transport.
Budget allocation of the Ministry of Transportation will be used to support transportation
facility and infrastructure service improvement to reach minimum service standard and to
elevate the competitiveness of real sector. In APBN 2013 the Ministry of Transportation is
planned to receive budget in amount of Rp.36.7 trillion. This sum is from rupiah sources
Rp.33.7 trillion, non-tax revenue (PNBP) and Public Service Agency (BLU) Rp.763.5 billion
and foreign loans Rp.1.4 trillion to execute a number of programs including: (1) human
4 -7 6
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
resources development program in transportation sector; (2) land transportation
management and operation program; (3) railway transportation management and operation
program; (4) sea transportation management and operation program; and (5) air
transportation management and operation program.
The performance indicators from the implementation of such programs are: (1) participants
and graduates of degree transportation education program to reach 164 persons per annum
and number of certified graduates of transportation human resources development program
to reach 5,292 persons per annum; (2) three packages of urban transport masterplan, urban
traffic information master plan, evaluation reports prepared, automatic traffic control system
(ATCS) operated, 32 urban transport safety and land traffic safety facilities provided; (3) 84
units of locos, KRDI, KRDE, KRL, railbus, trams and new railways tracks including double
tracks of 383.37 km long procured; (4) 78 routes of pioneer sea transport served and 20
pioneer ships and passenger ships built to support the operation of pioneer sea transport; and
(5) 132 pioneer air transport routes served and 120 airports developed and rehabilitated.
Based on policies and programs adopted by the Ministry of Transportation in 2013, the
expected outcomes will include: (1) human resources with reliable, skilled, expert competency
in land, sea, air and railways transport and and highly competitive in supporting the programs
and activities of transportation sector; (2) land transportation service performance improved;
(3) railways transportation service performance improved; (4) sea transportation service
performance improved; and (5) air transportation service performance improved, which are
timely scheduled, integrated, safe and comfortable to enhance the efficiency of passenger
and cargo movements and to minimize inter-region air transport service and to boost national
economy.
The Ministry of Health
The theme of action program in health sector in RKP 2013 is “Emphasizing Health
Development through Preventive Approach on Top of Curative Approach, Improving Public
Health and Sanitation with Water Suppply Expansion, Slum Area Improvement so as to
Elevate Life Expectancy from 70.7 years in 2009 to 72.0 years in 2014, and Realizing the
Entire Millennium Development Goals (MDGs) by 2015”. The vision of the Ministry of Health
in Strategic Plan Document 2010 – 2014 is to develop “Healthy Population in Self-Reliance
and Just Manner”. To pursue this vision the Ministry of Health carries missions as follows:
(1) to improve public health rate through community empowerment including the
participation of private parties and civil society groups; (2) to protect public health with
assurance on the provision of complete, equal, quality and just health services; (3) to ensure
the provision and distribution of health resources; and (4) to establish good governance.
To support such development priorities in health priorities, the Ministry of Healt in APBN
2013 is planned to receive budget Rp.34.6 trillion. This sum reflects an increase of Rp.3.4
billion or 10.8 percent if compared with budget allocation in APBNP 2012 of Rp.31.2 trillion.
This budget comes from rupiah sources Rp.28.4 trillion, non-tax revenue/general public
agency (PNBP/BLU) Rp.6.0 trillion and foreign loans Rp.203.9 billion to implement various
programs, including: (1) health development program; (2) human resources development
and empowerment program in health sector; (3) nutrition and mother and children health
development program; (4) pharmateutical and health equipment program; and (5) disease
control and sanitation improvement program.
Financial Notes and Indonesian Budget 2013
4 -7 7
Chapter IV
Central Government Expenditure
Performance indicators of such programs are: (1) 91 puskemas established in inhibited border
areas and small islands and 9,323 puskemas delivering basic health services for poor
population; (2) 5,320 health operators assigned in isolated, border areas and island and other
disease prone regions maximized and granted with incentives; (3) 100 percent of under five
malnourished babies treated and 89 percent of maternal mothers served by skilled health
operators; (4) 95 percent of medicine and vaccines provided and 90 percent of health
equipment and logistics in the markets comply with safety, quality and efficacy requirements;
and (5) 99 percent of 0 – 11 month infants receiving complete basic immunization and 85
percent of zoonosa case found handled according to the standards.
Based on policies and programs to be carried out by the Ministry of Health in 2013 the
expected outcomes are: (1) basic, referential, traditional, alternative, complementary health
initiatives, occupational, sport and matra health improved including the standardization,
accreditation and quality of health services; (2) health human resources supply and quality
enhanced according to the specified health service standards; (3) supply and affordability of
quality health services for all citizens improved; (4) supply of pharmautical and health
equipment complying with the standards and affordable by the people improved; and (5)
lower prevalence rate, mortality rate and disability rate as a result of diseases.
The Ministry of Energy and Mineral Resources
In line with the theme and targets of National Development 2013 as prescribed in
Government Work Plan 2013, energy and mineral resources mineral plays leading roles in
national priorities in terms of two aspects, i.e.: bureaucracy and governance and energy
reform with priority theme “Realizing National Energy Resilience to Assure National Growth
with Institutional Restructuring and Optimun and Broad Consumption of Alternative
Energy”. It is consistent with the vision of the Ministry of Energy and Natural Resources
(ESDM) i.e. “realizing energy relisience and self-sufficiency and augmenting the added value
of energy and mineral to generate maximum benefits for people”.
Based on the strategic plan of the Ministry of ESDM 2010 – 2014 and according to the
theme of RKP in 2013 and in view of problems and challenges in energy and natural mineral
sector , the policies and strategies to take by the Ministry of ESDM in 2013 will be focused on:
(1) fuel and electricity subsidy reduction through intensified gas consumption for
transportation (gas station development), and for domestic purposes (urban gas distribution
networks) and fuel substitution for power generation; (2) increasing electrification ratio by
expanding distribution networks and sub-stations in villages, the provision of affordable and
saving electricity for the residents of underdeveloped regions and fishermen households,
and the construction of renewable energy plants; (3) increasing lifting and oil and gas reserve
by evaluating oil and gas reserves and CBM, exploration to look for new oil and gas reserves,
improving oil and gas and CBM production sharing contracts; (4) energy diversification
with Energy Independent Village (DME) development; geothermal development, geothermal
consumption promotion; (5) energy conservation with energy audit, education and
socialization of energy conservation; (6) energy infrastructure improvement with the
resumption of power generation development, transmission network and sub-station
development, Gas station (SPBG) development, urban gas distribution network development
and mini LPG plant development; (7) increasing the added values of minerals and coals by
augmenting the added values of mine minerals; (8) mineral and coal development and
supervision by intensifying production supervision and mineral and coal marketing, national
4 -7 8
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
mineral and coal production inventory preparation, potential non-tax revenue inventory
and verification from general mining.
Budget ceiling of the Ministry of ESDM in 2013 is set at Rp.18.8 trillion. This sum reflects an
increase of Rp.2.5 trillion or 15.5 percent higher than allocation of the same ministry in
APBNP 2012 earmarked at Rp.16.3 trillion. The said budget comes from rupiah sources
Rp.17.1 trillion, non-tax revenue (PNBP) and Public Service Agency (BLU) Rp.1.7 trillion
for the execution of some programs including: (1) electricity management program; (2)
new renewable energy management program; (3) geological research, mitigation and service
program; (4) oil and gas management and supply program; and (5) oil fuel supplies and
distribution arrangement and supervision and piped gas transport program.
The performance indicators for the implementation of such various programs are: (1) power
generation with cap. 188 megawatt, 3,625 kilometer circuit (kms) of transmission networks,
main sub-station with cap. 4,740 mega volt ampere, 9.319,8 kms of distribution networks
and distribution sub-station with cap. 213.5 mva; and 16,204 customers of affordable and
saving electricity program realized; (2) 12 investments and cooperation in bioenergy sector
realized and 5 renewable power generator plants developed; (3) geologic information used
by 4,000,000 people and more intensive use of regional resources prospects data in 42 mining
work areas (WKP) and 74 locations; (4) oil production of 890-930 thousand BOPD, gas
1,325-1,390 thousand BOEPD and Coalbed Methane (CBM) 61.34 thousand BOEPD realized;
and (5) three special rights for transmission routes and gas distribution network areas and
the coverage of fuel distribution supervision system embracing 30 percent of NKRI territories
awarded.
Based on policies and programs to be carried out by the Ministry of Energy and Mineral
Resources in 2013, the expected outcomes are: (1) electrical energy consumption in reliable,
safe and environmentally friendly manner; (2) new renewable energy management program
and energy conservation realized; (3) the status of database, geological resources, geology
based spatial planning and geological disaster mitigation improved; (4) oil and gas production
sustainability improved, including the national capacity, fuel supply reliability and efficiency
and industrial raw materials, infrastructure reliability and lower occupational accidents and
environmental impacts of oil and gas activities; and (5) fuel supplied and distributed
throughout NKRI and national fuel reserves allocated.
The Ministry of Finance
In APBN 2013 the Ministry of Finance is planned to receive budget of Rp.18.2 trillion. This
allocation will be used to pursue the vision advocated by the Ministry of Finance i.e. “toward
trustable and accountable state finance and asset manager for prosperous, democratic and
just Indonesia” and to materialize the mission of “developing sound, sustainable, prudent,
responsible fiscal policies; realizing optimum asset management based on functionality
principle, legal certainty, transparency, efficiency and accountability; building capital market
industries and non-banking institutions as driving and reinforcing force to forge globally
competitive national economy, to foster and develop public administration based organizations
suitable to the public demands; to build and develop trustable, professional, highly integrated
and responsible human resources; and to build and develop modern, integrated financial
information system and other strategic facilities and infrastructure”.
Financial Notes and Indonesian Budget 2013
4 -7 9
Chapter IV
Central Government Expenditure
Budget allocated to the Ministry of Finance in 2013 is to rise by Rp.1.3 trillion or 7.8 percent
higher than allocation in APBNP 2012 set at Rp.16.9 trillion. The said budget is from rupiah
sources Rp.17.8 trillion, public service agencies (BLU) Rp.152.2 billion and foreign loans
Rp.300.7 billion used to finance the implementation of various programs, inclusive of: (1)
tax revenue improvement and safeguarding program; (2) customs and excise collection
supervision and service program; (3) state treasury management program; (4) state asset
management, state receivable settlement and auction service program; (5) education and
training program for the officials of the Ministry of Finance; (6) fiscal policy formulation
program; (7) fiscal balance of the Government and regional government management
improvement program; (8) state budget management program; (9) accountability supervision
and improvement program for officials of the Ministry of Finance; and (10) loan management
and financing program.
Performance indicators from the implementation of these programs are: (1) percentage of
the proposed PP (Government Regulation) and PMK (Regulation of Finance Minister)
preparation and revision in taxation I to reach 100 percent; (2) percentage of regulation
formulation finalization in custom facility sector to reach 100 percent and the average
percentage for the realization of committed custom facility services to reach 85 percent; (3)
the timely finalization of 3 documents, i.e. LKPP and draft PP on APBN and APBN-P and
remuneration revenue for the short-term savings, deposits and investments (idle cash KUN)
to amount Rp.4.0 trillion; (4) the utilized state assets to reach Rp.103.0 trillion and recovery
proceeds from APBN expenditures to amount Rp.350.0 billion; (5) the percentage of STAN
diploma program graduates with minimum academic achievement “good” to reach 87.5
percent; (6) rupiah exchange rate deviation of 5 percent and the percentage of fiscal risk
budget reserve used to reach 90 percent; (7) the percentage of accurate amount of transfer
to regions proceeds to reach 100 percent and the percentage of Regional Regulation (Perda)
on PDRD in accordance with laws and regulations to reach 90 percent; (8) draft Financial
Notes, APBN and Bill APBN (APBNP) timely prepared with accurate amounts (100 percent);
(9) the percentage of proven investigation to reach 90 percent and 30 policy recommendations
from supervision; and (10) the percentage of timely financial and BMN reconciliation and of
integrated debt database development to reach respectively 100 percent.
Based on policies and programs to be executed by the Ministry of Finance in 2013, the expected
outcomes include: (1) more optimum tax revenues; (2) custom and excise administrator
providing facilitation to industries, trades and communities and revenue optimizing; (3)
state treasury management in professional, transparent and accountable fashion according
to the laws; (4)professional, sound, maximum and optimum state asset management, state
receivable settlement and auction services capable of building good image to stakeholders;
(5) human resources with high integrity and competency; (6) sustainable fiscal policies with
measurable fiscal risks for stabilitation and economic growth; (7) effectiveness and efficiency
of financial relation management of the Government and regional governments enhanced;
(8) budgeting function excercised according to the laws and Government’s policy; (9) added
value generating supervision through efficiency enhancement in risk management process,
controlling and governance and accountability of officials within the Ministry of Finance;
and (10) optimum management of Government Bonds (SBN) or loans to secure APBN
financing.
4 -8 0
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
The Ministry of Agriculture
In the fourth stage of RPJMN (2010-2014) agriculture development remains to play strategic
roles in national economy. These strategic roles are evident from concrete contribution for
capital formation, food supplies, industrial raw material supplies, foods and energy,
employment absorption, soucers of foreign exchange and income sources, and environmental
preservation with environmentally friendly farming practices. The theme of action program
in agriculture sector as prescribed in RKP 2013 is “Bolstering Food Resilience and Continuing
Agriculture and Fishery Revitalization toward Food Sufficiency, Competitiveness
Improvement of Agriculture Products; Farmer Income Augmentation; and Environmental
and Natural Resources Preservation; GDP of agriculture sector to grow by 3.9 percent; Farmer
Exchange Rate index above 105 and Fishermen Exchange Rate index above 105”.
Based on evaluation to agriculture development that has been made to date, there are still
many fundamental issues requiring more careful and proper management including: (1)
the increasing food demands in line with the growing population and income of people; (2)
fluctuation of prices and good supplies due to international market impacts; (3) the depleting
land, water and energy resources; (4) global climate change, (5) small status and area of
lands, (6) limited capacity in national hutchery and seedling system, (7) limited farmer access
to capital, and (8) weak institutional capacity of farmers and extension agents.
With the ratification of ASEAN-China Free Trade Area since 2010, and to face ASEANIndia Free Trade Area in 2011, ASEAN Economic Community in 2015, and global trade
agreement set up by WTO that will take into effect starting in 2010, the distribution of goods
and services will be more freely flowing between the countries ratified such agreements
including agriculture products. Indonesia should not deemed this issue as a challenge only
but at the same time as an opportunity to expand its specialty products. It is consistent with
the vision of the Ministry of Agriculture i.e. “Developing Superior Sustainable Industrial
Agriculture based on Local Resources to Fortify Food Sufficiency, Added Values,
Competitiveness, Export and Farmers’ Welfare”. The Ministry of Agriculture has proclaimed
four agriculture development targets knows as three success targets, namely: (1) sustainable
food resilience and self sufficiency; (2) food diversification; (3) added value, competitiveness
and export building; and (4) farmers’ welfare augmentation.
To support the vision and missions of the Ministry of Agriculture, in APBN 2013, the Ministry
of Agriculture is planned to receive budget Ro.17.8 trillion. This sum is Rp.721.7 billion or 4.2
percent higher that the agriculture budget allocated in APBNP 2012 of Rp.17.5 trillion. The
said budget comes from rupiah sources Rp.17.5 trillion, non-tax revenue (PNBP)/Public
Service Agency (BLU) Rp.91.6 billion, and foreign loans Rp.195.3 billion used to execute a
number of programs such as: (1) food crop production, productivity and quality improvement
program to achieve sustainable food resilience and food self-sufficiency; (2) agriculture
infrastructure and facility provision and development program; (3) beef self-sufficiency and
safe, healthy, wholesome and hala animal food supplies; (4) technology development and
highly competitive superior agriculture varieties development program; (5) agriculture human
resources and farmer institution development program; and (6) sustainable plantation plant
production, productivity and quality improvement program.
Performance indicators for the implementation of these programs are: (1) 112,625 tons of
high quality seeds under direct aid mechanism distributed to integrated plant management
Financial Notes and Indonesian Budget 2013
4 -8 1
Chapter IV
Central Government Expenditure
field schools (SLPTT) and non SLPTT schools (paddy) and 703 units of post harvest facilities;
(2) 146,770 ha of lands optimized, conserved, rehabilitated and reclaimed and 11.08 million
tons of fertilizer subsidized; (3) cattle breeding to produce 3.1 million heads of young cattle
and the control, prevention and eradication of zoonosis contagious diseases attacking animals
(PHMSZ), viral, bacteria, parasite and reproduction disruption of 8.98 million doses; (4) 13
new high quality varieties of food crops and 10 high quality variety of plantation plants
invented; and (5) coffee export development in 3,540 ha of land.
Based on policies and programs to be performed by the Ministry of Agriculture in 2013, the
expected outcomes are: (1) food crop farming expanded supported with post-harvest
management system and seed supplies and efficient production safeguarding to realize
sustainable and adequate food crop production; (2) agriculture facility and infrastructure
provision and development realized with land expansion and management, agriculture
financing facility, fertilizer and pesticide facilitation, and agriculture equipment and machine
facilitation; (3) animal food supplies improved (meat, eggs, milk) and higher contribution
of domestic livestock in the provision of animal food supplies (meat and eggs); (4) agriculture
technology innovation and dissemination; and (5) sustainable plantation plant production,
productivity and quality. In addition, to support the policy of deconcentration fund reallocation
and co-administration tasks that have been delegated to regions to DAK (Special Allocation
Fund), in APBN 2013 the Ministry of Agriculture is planned to transfer its activities to DAK
worth of Rp.417.1 billion.
TABLE 4.12
EXPENDITURE BUDGET FOR MINISTRIES/AGENCIES, 2012 - 2013
(miliar rupiah)
NO
4 -8 2
BA
CODE
APBNP
2012
MINISTRIES/AGENCIES (K/L)
APBN
2013
1
001
PEOPLE'S ASSEMBLY COUNCIL (MPR)
623,2
732,7
2
002
HOUSE OF REPRESENTATIVES (DPR)
2.706,6
2.998,3
3
004
SUPREME AUDITOR (BPK)
2.674,8
2.903,4
4
005
SUPREME COURT (MA)
5.055,6
5.325,9
5
006
ATTORNEY GENERAL'S OFFICE (KEJAKSAAN AGUNG)
3.789,4
4.362,2
6
007
STATE SECRETARIATE MINISTRY
1.977,2
2.473,2
7
010
THE MINISTRY OF HOME AFFAIRS
16.722,1
15.782,6
8
011
THE MINISTRY OF FOREIGN AFFAIRS
9
012
THE MINISTRY OF DEFENSE
10
013
THE MINISTRY OF LAWS AND HUMAN RIGHTS
6.949,5
7.575,3
11
015
THE MINISTRY OF FINANCE
16.913,7
18.234,4
12
018
THE MINISTRY OF AGRICULTURE
17.097,8
17.819,5
13
019
THE MINISTRY OF INDUSTRIES
14
020
THE MINISTRY OF ENERGY AND MINERAL RESOURCES
4.996,8
5.590,1
72.935,5
81.963,6
2.443,0
3.269,9
16.286,3
18.803,9
36.679,2
15
022
THE MINISTRY OF TRANSPORTATION
38.147,1
16
023
THE MINISTRY OF EDUCATION AND CULTURE
77.179,8
73.087,5
17
024
THE MINISTRY OF HEALTH
31.204,5
34.582,0
18
025
THE MINISTRY OF RELIGIONS
39.375,8
43.960,5
19
026
THE MINISTRY OF MANPOWER AND TRANSMIGRATION
4.101,4
4.863,1
20
027
THE MINISTRY OF SOCIAL AFFAIRS
4.549,9
5.605,6
21
029
THE MINISTRY OF FORESTRY
5.686,8
6.717,5
22
032
THE MINISTRY OF MARINE AND FISHERY
6.014,1
7.077,4
23
033
THE MINISTRY OF PUBLIC WORKS
74.977,1
77.978,0
24
034
THE COORDINATING MINISTRY FOR POLITICS, LAWS AND SECURITY
405,1
518,2
25
035
THE COORDINATING MINISTRY FOR ECONOMY
212,0
281,1
26
036
THE COORDINATING MINISTRY FOR SOCIAL WELFARE
222,3
298,9
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
TABLE 4.12
EXPENDITURE BUDGET FOR MINISTRIES/AGENCIES, 2012 - 2013
(miliar rupiah)
NO
BA
CODE
MINISTRIES/AGENCIES (K/L)
27
040
THE MINISTRY OF TOURISM AND CREATIVE INDUSTRIES
28
041
THE MINISTRY OF STATE OWNED ENTERPRISES
29
042
THE MINISTRY OF RESEARCH AND TECHNOLOGY
30
043
THE MINISTRY OF ENVIRONMENT
31
044
THE MINISTRY OF COOPERTIVE, SMALL AND MEDIUM ENTERPRISES
32
047
33
048
34
050
35
36
37
054
CENTRAL BUREAU OF STATISTICS
38
055
THE MINISTRY OF NATIONAL DEVELOPMENT PLANNING
39
056
NATIONAL LAND AGENCY
40
057
NATIONAL LIBRARY
41
059
THE MINISTRY OF COMMUNICATION AND INFORMATICS
42
060
NATIONAL POLICE
43
063
DRUG AND FOOD SUPERVISION BODY
44
064
45
46
APBNP
2012
APBN
2013
2.672,0
2.053,0
111,3
143,6
639,8
653,0
738,6
921,5
1.387,5
1.810,7
THE MINISTRY OF WOMEN EMPOWERMENT AND CHILD PROTECTION
150,9
234,7
THE MINISTRY OF STATE APPARATUS PERFORMANCE IMPROVEMENT AND BUREAUCRACY REFORM
131,4
201,3
STATE INTELLIGENCE AGENCY
1.484,9
1.551,4
051
STATE CRYPTOGRAM AGENCY
1.758,4
1.593,5
052
NATIONAL DEFENSE AGENCY
31,1
38,9
2.272,6
3.741,7
755,5
1.055,1
3.881,2
4.390,2
348,0
478,7
3.090,8
3.807,4
41.892,9
45.622,0
1.079,7
1.188,3
NATIONAL RESILIENCE BODY
174,2
235,0
065
CAPITAL INVESTMENT COORDINATING BODY
650,7
705,1
066
NATIONAL NARCOTICS BODY
841,0
1.072,6
47
067
NATIONAL NARCOTICS BODY
1.153,8
2.048,8
48
068
NATIONAL DEMOGRAPHY AND FAMILY PLANNING BODY
2.110,1
2.601,9
49
074
NATIONAL COMMISSION FOR HUMAN RIGHTS
50
075
53,7
72,8
METEOROLOGY, CLIMATOLOGY AND GEOPHYSICS BODY
1.284,0
1.392,3
1.625,2
8.492,0
221,8
199,8
51
076
KOMISI PEMILIHAN UMUM
52
077
MAHKAMAH KONSTITUSI RI
53
078
PUSAT PELAPORAN DAN ANALISIS TRANSAKSI KEUANGAN
54
079
LEMBAGA ILMU PENGETAHUAN INDONESIA
73,1
79,3
761,7
891,1
55
080
BADAN TENAGA NUKLIR NASIONAL
637,1
668,9
56
081
BADAN PENGKAJIAN DAN PENERAPAN TEKNOLOGI
808,6
888,7
57
082
LEMBAGA PENERBANGAN DAN ANTARIKSA NASIONAL
491,9
526,1
58
083
BADAN KOORDINASI SURVEI DAN PEMETAAN NASIONAL
535,9
602,1
59
084
BADAN STANDARDISASI NASIONAL
74,2
98,5
60
085
BADAN PENGAWAS TENAGA NUKLIR
72,0
159,4
61
086
LEMBAGA ADMINISTRASI NEGARA
243,6
247,0
62
087
ARSIP NASIONAL REPUBLIK INDONESIA
130,3
154,2
63
088
BADAN KEPEGAWAIAN NEGARA
486,9
535,1
64
089
BADAN PENGAWASAN KEUANGAN DAN PEMBANGUNAN
1.050,5
1.250,4
65
090
KEMENTERIAN PERDAGANGAN
2.441,5
3.105,7
66
091
KEMENTERIAN PERUMAHAN RAKYAT
5.928,5
5.168,1
67
092
KEMENTERIAN PEMUDA DAN OLAH RAGA
1.757,9
1.956,7
68
093
KOMISI PEMBERANTASAN KORUPSI
634,5
706,5
69
095
DEWAN PERWAKILAN DAERAH (DPD)
589,8
595,5
70
100
KOMISI YUDISIAL REPUBLIK INDONESIA
71
103
BADAN NASIONAL PENANGGULANGAN BENCANA
72
104
BADAN NASIONAL PENEMPATAN DAN PERLINDUNGAN TENAGA KERJA INDONESIA
73
105
BADAN PENANGGULANGAN LUMPUR SIDOARJO (BPLS)
74
106
LEMBAGA KEBIJAKAN PENGADAAN BARANG/JASA PEMERINTAH
183,4
211,5
75
107
BADAN SAR NASIONAL
992,1
1.666,4
76
108
KOMISI PENGAWAS PERSAINGAN USAHA
77
109
BADAN PENGEMBANGAN WILAYAH SURAMADU
78
110
OMBUDSMAN REPUBLIK INDONESIA
58,8
67,7
79
111
BADAN NASIONAL PENGELOLA PERBATASAN
197,7
274,1
80
112
BADAN PENGUSAHAAN KAWASAN PERDAGANGAN BEBAS DAN PELABUHAN BEBAS BATAM
735,3
885,0
81
113
BADAN NASIONAL PENANGGULANGAN TERORISME
82
114
SEKRETARIAT KABINET
83
115
BADAN PENGAWAS PEMILIHAN UMUM
84
116
LEMBAGA PENYIARAN PUBLIK RADIO REPUBLIK INDONESIA
769,0
985,2
85
117
LEMBAGA PENYIARAN PUBLIK TELEVISI REPUBLIK INDONESIA
753,2
864,2
86
118
BADAN PENGUSAHAAN KAWASAN PERDAGANGAN BEBAS DAN PELABUHAN BEBAS SABANG
JUMLAH
77,4
91,9
1.128,2
1.345,5
265,9
392,7
1.533,3
2.256,9
113,5
119,8
268,2
399,6
92,8
152,2
197,2
213,4
53,1
856,6
-
392,2
547.925,5
594.597,6
Source: the Ministry of Finance
Financial Notes and Indonesian Budget 2013
4 -8 3
Chapter IV
Central Government Expenditure
4.4.2.2 State General Treasury Budget Section (BA BUN)
Apart from budget allocation through Ministries/Agencies (K/L) Budget Section, the Central
Government Expenditure is allocated under State General Treasury Budget Section (BA BUN
999) managed by the Minister of Finance in the capacity of fiscal manager. In APBN 2013
allocation for BA BUN is earmarked at Rp.559.8 trillion (48.5 percent of Central Government
Expenditure). This budget will be allocated for, among other things,: (1) the compliance of
Government’s obligations to other parties such as pension payment to the retired persons,
health insurance for public servants, and loan interest payment; (2) the distribution of various
types of subsidies; and (3) reserve fund allowance for emergency such as for the anticipation
of risks arising from the mismatch of macroeconomic assumptions and their realization,
and reserve fund for naturan disaster management. BA BUN in Central Government
Expenditure is recorded into several budget section classification as follows.
BA BUN of the Government Loan Management collects loan interest payment as debt services
that must be complied with by the Government for the withdraw of loans in the past. This
interest payment is an instrument to maintain economic stability from which the investors,
foreign and domestic creditors, and other international agencies can assess the credibility of
the Government from its capacity in complying with the debt services in timely fashion. In
view of some relevant variables loan interest payment in APBN 2013 has been allocated to
amount Rp.113.2 trillion. This allocation is for the payments of domestic loan interest Rp.80.7
trillion and foreign loan interests Rp.32.5 trillion.
BA BUN for Grant Management collects the allocation of budget for grant spending, which
in APBN 2013 is earmarked Rp.3.6 trillion. This grant spending budget is to support grant
spending policy to regions in 2013 aiming to augment the capacity of regional governments
in providing basic public services in transportation sector, water supply facility development,
waste water management, irrigation, sanitation, and geothermal exploitation.
Budget allocation through BA BUN, which is very significant is for subsidies collected in BA
BUN for subsidy spending management. Subsidy spending aims to maintain the price stability
of domestic goods and services, to give protection to low-income people, to increase agriculture
production and to provide incentive for business world and the communities in general. In
APBN 2013 budget for subsidies amounts Rp.317.2 trillion. This allocation is planned to be
extended for energy subsidy Rp.274.7 trillion, i.e. fuel subsidy Rp.193.8 trillion and electricity
subsidy Rp.80.9 trillion. Meanwhile, the other Rp.42.5 trillion is planned for non-energy
subsidy including: (1) food subsidy Rp.17.2 trillion; (2) fertilizer subsidy Rp.16.2 trillion; (3)
seed subsidy Rp.1.5 trillion; (4) PSO subsidy Rp.1.5 trillion; (5) program credit interest subsidy
Rp.1.2 trillion; and (6) tax subsidy Rp.4.8 trillion.
Meanwhile in APBN 2013, BA BUN for Other Spending Management is to collect sosical
contribution for the premium of health insurance of public servants Rp.3.0 trillion, reserve
fund for natural disaster management Rp.4.0 trillion, and other spendings Rp.19.95 trillion.
Reserve fund for natural disaster management will be used to protect the affected people
against impacts of natural disaster. The activities to perform are pre-disaster stage, for
example, prevention and preparedness in dealing with the disaster, response emergency stage
and post-disaster recovery with rehabilitation and reconstruction activities.
Other spendings in BA BUN for Other Spending Management in 2013 is to collect all Central
Government expenditures allocated to finance certain activities, i.e. for the operation of
4 -8 4
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
agencies not yet have separate budget section code, ad-hoc activities, fiscal risk reserve fund,
and anticipation of urgent needs for governance operation. The allocation of other spending
budget in BA BUN of Other Spending Management consists of fiscal risk reserve fund (policy
measures) Rp.5.5 trillion; (2) other spendings Rp.14.45 trillion.
Fiscal risk reserve fund is for the anticipation of the Government against deviation as a
result of changing macroeconomic assumptions from the previously set parameters, which
is expected to affect the APBN posture such as assumptions of economic growth, rupiah
exchange rate to US dollar, and target oil lifting. In light of that the Government will allocate
budget for food price stabilization to anticipate the impacts of soaring food prices in global
markets, which are worried to hamper national food resilience, and reserve fund for land
capping risks as Government’s financing support for land acquisition in toll road development.
Other spendings are budget allocation to meet ad-hoc spending necessities, which are expected
not to repeat in future, operational spendings for agencies not yet have separate Budget
Section (BA), and other unexpected spendings required to run the governance.
Pursuant to PMK (Regulation of Finance Minister) Number 234/PMK.05/2011 concerning
Special Transaction Accounting System, as from fiscal year 2012, spendings for international
cooperation and pension payments will be part of BA BUN for Special Transaction
Management. In APBN 2013 this BA BUN receives budget allocation in amount of Rp.74.34
trillion, which in majority consists of social constribution to comply with the Government’s
obligations on pension payment Rp.74.30 trillion and the remaining Rp.35.56 billion is
contribution to international agencies not yet accommodated in BA K/L.
4.4.3 Central Government Expenditure Budget by Types
In APBN 2013, the Central Government expenditure budget is to rise by Rp.1,154.4 trillion
(12.5 percent of GDP) higher than its allocation in APBNP 2012 Rp.1,069.5 trillion (12.5
percent of GDP). According to Law Number 17 of 2003 concerning State Finance, this sum
shall be allocated into 8 types of spendings subject to their economic characters, i.e. personnel
expenditure, material expenditure, capital expenditure, loan interest payment, subsidies, grant
spending, social aids and other spendings. The composition of Central Government
expenditure allocation in 2013 by economic classification is presented in Table 4.13 and
Graph 4.41.
TABLE IV.13
CENTRAL GOVERNMENT EXPENDITURE TREND, 2012 - 2013
(trillion rupiah)
2012
No.
Description
APBN
% thd PDB
2013
APBNP
% thd PDB
APBN
% thd PDB
1.
Personnel expenditure
215,9
2,7
212,3
2,5
241,6
2.
Material expenditure
188,0
2,3
162,0
1,9
200,7
2,2
3.
Capital expenditure
152,0
1,9
176,1
2,1
184,4
2,0
4.
Loan interest expenditure
122,2
1,5
117,8
1,4
113,2
1,2
5.
Subsidies
208,9
2,6
245,1
2,9
317,2
3,4
6.
Grants expenditure
1,8
0,0
1,8
0,0
3,6
0,0
7.
Social Adis
47,8
0,6
86,0
1,0
73,6
0,8
8.
Other expenditure
28,5
0,4
68,5
0,8
20,0
0,2
965,0
11,9
1.069,5
12,5
1.154,4
12,5
Total
2,6
Source: the Ministry of Finance
Financial Notes and Indonesian Budget 2013
4 -8 5
Chapter IV
Central Government Expenditure
GRAPH 4.41
CENTRAL GOVERNMENT EXPENDITURE
COMPOSITION BY ECONOMIC CLASSIFICATION
, 2013
Mate rial
Capital
Expe nditure
Expe nditure
17%
Intere st
16%
Payment
10%
Pe rsonnel
Expenditure
21%
Other
Expe nditure
02%
Social Adis
06%
GRAPH 4.42
CENTRAL GOVERNMENT EXPENDITURE
COMPOSITION BY MANDOTARY/NONMANDATORY SPENDING , 2013
NonMandatory
Spending
35%
Mandatory
Spending
65%
Subsidy
27%
Grant
Expenditure
00%
Source : the Ministry of Finance
Source : the Ministry of Finance
By composition, subsidy allocation in 2013 is the highest portion of central government
expenditure by 27.5 percent, followed with personnel expenditure (20.9 percent), and material
expenditure (17.4 percent), and capital expenditure (16.0 percent). The lower proportion of
capital expenditure than that of material expenditure in central government expenditure is
not indicating favoritism to goverment apparatus and less attention of the Government in
pushing economic growth. These proportions have been classified according to the universally
accounting system and not fully reflected the implementation of Government’s programs.
For example, not all proceeds of capital expenditure will be used to finance infrastructure
development, and similarly material expenditure budget will not be expended totally to pay
Government’s apparatus. Some parts of capital expenditure proceeds will be expended to
support the Government’s apparatus such as for the procurement of computer. On the other
side, some material expenditure will be allocated to purchase assets for transfer to the people
that will generate significant impacts to the economy. The roles of the Government in economy
can be seen from Government’s investment expenditure analysis (which is not completely
similar to capital expenditure) as pointed out in Box. 4.2.
The sum of Central Government expenditure in APBN 2012 is in majority or around 65.0
percent (Rp.750.1 trillion) consists of compulsory expenditures that must be met (personnel,
operational material, subsidies, loan interest payment and social aids for natural disaster
management reserve); with the other 35.0 percent (Rp.404.3 trillion) for discretion spendings
of the Government (non-operational materials, part of social aids, grant spending and other
spendings) as presented in Graph 4.42. It indicates that efforts taken to enhance efficiency
and effectiveness of government expenditures must be continued. Elucidation of Central
Government expenditure budget for individual types of spendings is presented below.
Personnel Expenditure
Personnel expenditure is spending used to finance compensation in the form of money or
goods to government officials, either still active or retired as compensation and reward of
their services.
Budget allocated for personnel expenditure in APBN 2013 is planned to reach Rp.241.1 trillion
or 2.6 percent of GDP. In nominal wise, this sum is to increase by 13.6 percent (Rp.29.4
trillion) if compared with allocation in APBNP 2012 reaching Rp.212.3 trillion (2.5 percent
of GDP). It particularly relates with policy measures taken by the Government in bureaucracy
reform either to improve and maintain the welfare of Government officials and the retired
4 -8 6
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
officials or to enhance the quality of public services. This budget increase for personnel
expenditure in APBN 2013 takes place in all personnel expenditure components, i.e. salaries
and allowances, honorarium, vacation, overtime, etc., and social contribution.
Budget for salary and allowance in APBN 2013 is earmarked at Rp.112.2 trillion or 46.6
percent of total personnel expenditure. This allocation is to rise by Rp.11.4 trillion or 11.2
percent higher than the ceiling of APBNP 2012 recording Rp.101.3 trillion. This increase is
particularly due to policy of increasing basic salary by 7.0 percent on the average and the
budget reserve allowance to anticipate salary payments of new officials in various Central
Government institutions in order to enhance the quality of public services and replace officials
entering pension age.
For honorarium, vacation, overtime etc. APBN 2013 has allocated a budget of Rp.51.6 trillion
or 21.4 percent of total personnel expenditure. This budget is Rp.9.9 trillion or 23.7 percent
higher than APBNP 2012 recording Rp.41.7 trillion. The increase is mainly attributed to
budget allocation for remuneration to some ministries/agencies as the implication of total
bureaucracy reform in 2013.
Budget allocated to social contribution, which will be used, among others, to pay pensions
and health insurance, in APBN 2013 is planned to reach Rp.77.3 trillion or 32.0 percent of
total personnel expenditure. This budget is in nominal term to increase Rp.8.1 trillion or 11.7
percent higher than its allocation in APBNP 2012. The increase is due to higher basic pension
of 7.0 percent on the average.
Material Expenditure
Material expenditure is spending for the purchase of consumable goods and/or services for
the production of tradable and/or non-tradable goods/services for the transfer or sold to the
public other than social aids spending and duty travel spending. Material expenditure consists
of: (1) operational good spending, (2) non-operational good spending, (3) Public Service
Agencies (BLU), and (4) good spending for transfer to the public.
Budget allocation for material expenditure in RAPBN 2013 is planned to reach Rp.200.7
trillion or 2.2 percent of GDP. The allocation of material expenditure budget in 2013 is more
focused on Government’s initiatives to: (1) maintain well-advanced governance operation
to enhance the quality of public services to the communities; (2) improve efficiency and
effectiveness of K/L material expenditure; (3) maintain state assets with routine maintenance
to roads/bridges/other infrastructure assets; and (4) capacity building to support national
development program.
This material expenditure of Rp.200.7 trillion is also to collect some spendings of capital
character or classified as Government investment spending. Material expenditure of this
Governmet investment spending include: (1) the procurement of other physical goods for
co-administration tasks; (2) consultant fees for intellectual rights; (3) professional services
for capacity building; (4) maintenance cost to maintain asset values; and (5) the procurement
of goods for transfer to the public or other entities, not classified as social aids (see elucidation
in Box 4.2).
Financial Notes and Indonesian Budget 2013
4 -8 7
Chapter IV
Central Government Expenditure
Capital Expenditure
Capital expenditure is budget used to acquire or add fixed assets or other assets generating
benefits more than one accounting period and exceeds the minimum capitalization threshold
of fixed assets and other assets established by the Government. The said fixed assets will be
used for the operation of day-to-day activities of a working unit, but not for sales. Budget for
capital expenditure along with material expenditure will be allocated to various development
programs according to the theme and priorities of development as prescribed.
Budget allocation for capital expenditure in APBN 2013 is set at Rp.184.4 trillion or 2.0
percent of GDP. Nominally, this sum shows an increase of Rp.8.3 trillion or 4.7 percent
higher than allocation in APBNP 2012 recording Rp.176.1 trillion (2.1 percent of GDP). capital
expenditure budget in APBN 2013 is planned to: (1) support funding for basic infrastructure
development (energy, transporation, irrigation, food resilience, housing, water supply and
communication infrastructure); (2) improve the roles of capital expenditure, especially in
infrastructure provision to support MP3EI progra and promote Government’s investments;
(3) support security stability with accelerated achievement to Minimum Essential Force
(MEF); (4) support funding for multiyear activities to maintain the sustainability of program
and development financing; and (5) increase the mitigation and adaptation capacity to the
negative impacts of climate change.
In addition, on top of budget allocation for capital expenditure Rp.184.4 trillion there is BA
BUN budget allocation for: (1) shelter mapping and development in disaster prone regions;
(2) livestock raising development (cow ranches in Nusa Tenggara Timur and West Papua);
(3) development acceleration in Madura; (4) development acceleration in Papua Province
and West Papua Province (P4B); (5) the completion of housing development in Nusa Tenggara
Timur. The said BA BUN budget is potential to increase the capital expenditure budget.
In line with the increasingly allocation for capital expenditure, the Government consistently
attempts to raise budget allocation for more productive activities, especially in infrastructure
development. This Government’s attempt is reflected from the trend of budget earmarked
for infrastructure development/improvement. In 2013, this effort is focused on the
development of infrastructure with strong driving force to economic growth such as electricity,
roads, ports, and infrastructure in 6 (six) economic corridors. Further description on
infrastructure budget can be seen in Box 4.1.
Apart from capital expenditure budget of Rp.184.4 trillion there is expenditure budget of
capital character or classified as Government investment spending, which according to
Government Accounting Standard is recorded as material expenditure or social aid spending.
This material expenditure include: (1) the procurement of other physical goods for coadministration tasks; and (2) the procurement of goods for transfer to the public or other
entities, not classified as social aids (see elucidation in Box 4.2.
4 -8 8
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Box 4.1.
INFRASTRUCTURE BUDGET IN APBN
Law Number 17 of 2003 concerning State Finance spells out that the Central Government
Expenditures shall be also classified by organization, functions and types of spending. expenditure
classification by organization is to break down expenditure by K/L (ministries/agencies) or general
treasury budget section (BA BUN). Meanwhile expenditure classification by function details 11
functions illustrating various aspects of governance in public service delivery and people’s welfare
augmentation. These elevent functions are: (1) public service function; (2) defense function; (3)
law and order function; (4) economic function; (5) environmental function; (6) housing and
public facility function; (7) health function, (8) tourism and cultural function; (9) religion function,
(10) education function; and (11) social protection function. Economic classification is the
breakdowns of central government expenditure in eight types of spending inclusive of personnel
spending material spending; capital spending; interest payment; subsidies; grant spending; social
aids; and other spending.
However, during the discussion of national development programs and their budget, data on the
trend of budget allocation and realization in APBN for activities in certain sectors will be also
necessary to take decision. Budget information in certain sectors in APBN which is relatively
significant is budget to support infrastructure development (hereinafter referred to as
infrastructure budget).
Since infrastructure is a terminology of one of development output, information on infrastructure
budget must be prepared as an attempt to support the introduction of performance based
budgeting, in a sense that budget that has been or will be prepared must be attached with the
realization and target to achive in infrastructure sector. In addition, information of infrastructure
budget can be also used to express accountability and/or commitment of the Government for
national development targets in infrastructure, including economic growth, workforce
employment. In terms of economic substance, apart from the urgent need, infrastructure
development is believed as the most effective driving force for overal economic development.
Moreover, information on infrastructure budget is expected capable of enriching and expanding
public perception on the roles and efforts of the Government in stimulating the economy that
thus far is more viewed from the sum of capital expenditure, in which budgeting performance is
more assessed based on input (input based). For example, not all capital expenditure budget will
be used to develop infrastructure, such as computer procurement, on the other side, not all
proceeds for non-capital expenditure (e.g. material spending) will be used for infrastructure
development, let’s say consulting services. The logical consequence, seriour efforts by the
Government in pushing infrastructure development will not only increase capital expenditure
but also can create additional types of spending. Likewise, significant increase in capital
expenditure allocation will not always rise significatnly budget for infrastructure development.
Infrastructure development covers the construction of facilities and services for water resources,
irrigation, transportation, housing and settlement, communication and informatics, and lands
and spatial planning.
Infrastructure budget in APBN will be comprehensively compiled not only cover government
expenditure but also budget financing. For central government expenditure, infrastructure budget
may come from central government expenditure either through ministries/agencies (K/L) or
Non-K/L. As to transfer to regions, infrastructure budget may be from special allocation fund in
sectors related to infrastructure. For budget financing, the infrastructure spending may consist
of Government investments in infrastructure, revolving fund for land acquisition, and State Capital
Participation in PT Sarana Multi Infrastruktur (PT SMI) or PT Penjaminan Infrastruktur Indonesia
(PT PII).
Financial Notes and Indonesian Budget 2013
4 -8 9
Chapter IV
Central Government Expenditure
Infrastructure budget through K/L is mainly allocated to some K/Ls with the primary function in
infrastructure sector and/or supporting the implementation of infrastructure development. For
example, the Ministry of Public Works, the Ministry of Transportation (for road and transportation
infrastructure) and the Ministry of Energy and Mineral Resources (for energy infrastructure) will
be categorized under infrastructure budget through K/Ls. For non-K/L budget, the infrastructure
budget will be allocated for the development of Bintan and Karimun areas and land capping risks
in other expenditure post.
Infrastructure Budget Trend,
2007-2013
250
8,00
6,3
200
6,2
06
6,5
6,5
07
6,00
4,6
150
(%)
(Rp trillion)
The allocation orientation of infrastructure budget is
expected to more secure the realization of development
targets and at the same time to respond various challenges
in infrastructure sectors as set out in Government Work
Plan (RKP). For example, in RKP 2013, one challenge that
must be addressed in national development in the
exceeding logistic costs between regions throughout
Indonesia causing inefficiency. In dealing with this
challenge and supporting the focused infrastructure
development priority, support for real sector
competitiveness improvement and the provision of basic
infrastructure for people welfare augmentation,
sustainable infrastructure provision and domestic
connectivity will garner great attention from the
Government with regular restructuring and revision.
4,00
100
175
201
129
50
60
79
91
99
2008
2009
2010
2,00
0
,00
2007
Infrastructure Budget
2011
2012
2013
Economic Growth, RHS
Source: the Ministry of Finance
The trend of infrastructure budget in APBN from 2009 – 2013 is presented in Graph.
Budget Allocation for Loan Interest Payment
For the last few years, the Government has introduced deficit budget policy aimed at achieving
economic growth up to the specified target. Such policy requires adequate financing sources
to cover the predetermined deficit either from loans or non-loans. However, the non-loan
financing sources are getting scarcer. Thus, the Government has to use loans to finance the
deficit. Consequently, the outstanding loans are steadily increasing from year to year with
immediate consequence of heavier loan burders that must be shouldered by the Government.
This upward burden comes from higher interests of outstanding loans and expenses for new
loan procurement.
Loan interest is part of debt services that must be complied with by the Government, apart
from the principal on due. Besides, the investors, foreign and domestic creditors and other
international agencies will assess the credibility of the Government from its timely compliance
to debt services. Given that, it is deemed necessary to plan loans in prudent and meticulous
manner to assure that financial liabilities of debt services in future will remain within the
economic capacity without exerting excessive pressure to ABPN and Balance of Payment.
In calculating the loans, some variables should be taken under considerations, including: (1)
the assumption of rupiah exchange rate to US dollar and some other hard currencies; (2) 3Month SPN rate used as reference for variable rate SBN; (3) the assumption of Libor rate as
reference in calculating loan instruments; (4) outstanding loans; and (5) the estimate of
new loans in 2012. Based on the foregoing variables, the Government will allocate budget
for loan interest expenditure in APBN 2013 worth of Rp.113.2 trillion or 1.2 percent of GDP.
The payment of loan interest in 2013 can be seen in Table 4.14.
4 -9 0
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
TABLE 4.14
LOAN INTEREST PAYMENT, 2012 - 2013
(billion rupiah)
Description
Loan Interest Payment
i. Domestic
ii. Foreign
Factors influencing:
Average rupiah exchange rate (Rp/US$)
Average 3-Month SBN Rate (%)
2012
APBN
2013
APBNP
APBN
122.217,6
88.503,3
33.714,3
117.785,2
84.749,3
33.035,9
113.243,8
80.703,3
32.540,5
8.800,0
6,0
9.000,0
5,0
9.300,0
5,0
133,6
134,6
0,9
(1,9)
156,2
159,6
1,0
(4,4)
161,4
180,4
0,5
(19,5)
Loan Financing: (trillion rupiah)
i. SBN issuance (netto)
ii. Domestic loan drawing (netto)
iii. Foreign loan drawing (netto)
These loan interest liabilities are for the payments of domestic loan interests Rp.80.7 trillion
and foreign loan interests Rp.32.5 trillion. As to the former it decreases by Rp.4.0 trillion if
compared with the previous year’s allocation. In nominal wise, the payment of domestic
loan interest is a little bit higher than that of foreign loan interest. It is because of higher
domestic loans on due, and Government’s policy more prioritizing loans from domestic
sources. Consequently the outstanding domestic loans are increasing, especially Domestic
SBN and other domestic loans. Another factor concerns with soft loans with lighter terms
and conditions that will minimize the percentage of foreign loan interest. In the mean time,
domestic loan interest liabilities are anticipated to fall by Rp.0.5 trillion, It is attributed to
lower costs for International SBN issuance and lower foreign loan interest references. The
issuance of International SBN is consistent with the Government’s policy of preventing
crowding out effect and abating dependency on foreign creditors.
Generally speaking, the Sovereign Credit Rating dan Country Risk Classification (CRC) of
Indonesia is constantly bolstering from year to year and positively affecting loan procurement
by the Government, which is getting more efficient, either during SBN issuance or loan
withdraw. Rating promotion of 1 notch is potential to reduce the yield of new International
SBN around 75-115 bps, with a decrease of 1 level CRC will be potential to cut expenses of
foreign loans, especially new export credit facilities at 130-150 bps. The Indonesia’s rating
position in 2012 was at BBB- (Fitch), BB+ with positive outlook (S&P) and Baa3 (Moody),
and lastly level3 (CRC).
Budget Allocation for Subsidy Expenditure
Subsidy in the Government expenditure is allocated to abate people’s burden in accessing
basic needs, and to maintain the productivity of producers, especially those producing basic
necessities at affordable rate. Subdity is granted to maintain price stability of domestic goods
and services, to protect low-income people, to increase agriculture production, and to give
incentives for business world and communities. It is expected that with such subsidy the
basic needs can be supplied in adequate quantity with stable prices and affordable by people.
Financial Notes and Indonesian Budget 2013
4 -9 1
Chapter IV
For subsidy budget allocation in 2013, the
subsidy expenditure policy will be focused
to: (1) control subsidy so as to increase
significantly capital expenditure in medium
term and fortify competitiveness; (2) reduce
fuel consumption in power generation
plants by intensifying the consumption of
coals, gas, geothermal, water and biodiesel
including solar energy; (3) bolster food
resilience; and (4) fortify business
competitiveness and access to UMKM
capital sources with interest subsidy aid of
program credits such as KKPE, KPEN-RP,
and KUPS .
Central Government Expenditure
GRAPH 4.43
SUBSIDY SPENDING COMPOSITION 2013
Subsidi
Listrik;
Rp80,9 T
Subsidi
Energi;
Rp274,7 T
Food Subsidy;
Rp17,2 T
Fertilizer
Subsidy;
Rp16,2 T
Subsidi Nonenergi;
Rp42,5 T
Subsidi BBM;
Rp193,8 T
Seed Subsidy
Rp1,5 T
PSO; Rp1,5 T
KP Subsidy;
Rp1,2 T
Tax Subsidy;
Rp4,8 T
Source: the Ministry of Finance
With such policies, budget allocated for subsidy in APBN 2013 is earmarked at Rp.317.2
trillion (3.4 percent of GDP). This sum is to rise by Rp.72.1 trillion if compared its ceiling in
APBNP 2012 recording Rp245.1 trillion. The majority of budget allocation for subsidy in
APBN 2013 will be channelled as energy subsidy Rp.274.7 trillion, i.e. fuel subsidy, 3-kg LPG
and LGV subsidy totalling Rp.193.8 trillion, and electricity subsidy Rp80.9 trillion. As to nonenergy subsidy, it amounts Rp.42.5 trillion consisting: (1) food subsidy Rp.17.2 trillion; (2)
fertilizer subsidy Rp.16.2 trillion; (3) seed subsidy Rp.1.5 billion; (4) PSO subsidy Rp.16.2
trillion; (5) interest subsidy for program credits Rp.1.2 trillion; and (6) tax subsidy Rp.4.8
trillion (see Graph 4.43).
Energy Subsidy
In APBN 2013, the Government still allocates budget for fuel subsidy for certain types, i.e.:
(1) kerosene; (2) premium and bio premium; and (3) solar and biosolar. In addition, the
Government provides subsidy for 3-kg LPG and LGV. With such subsidy it is expected that
fuel of particular types, 3-kg LPS and LGV be supplied at affordable rate. The amount of
subsidy for fuel, 3-kg LPG and LGV in APBN 2013 is considerably subject to parameters
used in calculating such subsidy, which include: (1) ICP US$100.0 per barrel; (2) the
consumption of subsidized fuels estimated to reach 46.0 million kiloliter (kl) and 3-kg LPG
3.9 metric ton; (3) fuel alpha Rp.642.6/liter; and (4) rupiah exchange Rp.9,300.0/US$. In
view of these parameters, budget earmarked for fuel of certain types, 3-kg LPG and LGV in
APBN 2013 is expected to amount Rp.193.8 trillion (2.1 percent of GDP) or to increase by
Rp.56.4 trillion if compared with subsidy for fuel, 3-kg LPG and LGV in APBN 2012 recording
Rp.137.4 trillion (1.6 percent of GDP). In 2012 realization, subsidy for fuel, 3-kg LPG and
LGV is expected to reach Rp.216.8 trillion. Since APBNP 2012, the proceeds of fuel subsidy
have included VAT of subsidized fuel for certain type and 3-kg LPG. It is to follow up BPK’s
findings and expected that the implementation of APBN in future be more transparent and
accountable.
With the soaring ICP price recently and the increasingly volumes of subsidized fuel, it is
deemed necessary to take policy measures to control the hike of fuel subsidy burden. In light
of that, in 2013 the Government will take a number of policies including: (1) to enhance the
efficiency of fuel subsidy allocation; (2) to control the consumption of subsidized fuel; (3) to
promote fuel to BBG (gas) conversion program, particularly for public transport in big cities;
(4) to continue kerosene to 3-kg LPG conversion program.
4 -9 2
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
TABLE 4.15
SUBSIDY FOR CERTAIN FUEL AND 3-KG GAS
2012-2013
DESCRIPTION
No
Subsidty of the Year (billion Rp)
- Subsidy for Fuel and BBN (billion Rp)
- Premium and BBN
- Kerosene
- Solar and BBN
- Subsidy for 3-kg LPG (billion Rp)
- Subsidi LGV (billion Rp)
- PPN (billion Rp)
- Underpayment in 2010 (billion Rp)
- Estimated under payment for 2012 (billion Rp)
2012
APBNP
2013
APBN
137.379,8
193.805,2
91.891,0
146.461,8
51.698,3
87.195,1
7.882,5
8.035,1
32.310,3
51.231,7
29.126,2
26.452,0
54,0
100,0
12.101,7
17.291,4
706,9
-
3.500,0
3.500,0
Parameter :
1
ICP (US$/barrel)
2
Exchange rate (Rp/US$)
3
Alpha BBM (Rp/liter)
4
Fuel volume + Bio BBM (thousand KL)
- Premium and Bio Premium
- Kerosene
- Solar and Bio solar
5
Volume Elpiji (million kg)
105,0
100,0
9.000,0
9.300,0
641,94
642,64
40.000,0
46.010,0
24.411,3
29.200,0
1.700,0
1.700,0
13.888,7
15.110,0
3.606,1
3.859,0
Source: the Ministry of Finance
In APBN 2013, electricity subsidy is still needed since the electricity rate tariff remains lower
than the production costs of electrical power. For the last few years, the realization of electricity
subsidy budget records significant increase. Thus, to control electricity subsidy, the
Government together with PT PLN (Persero) will take measures to decrease the production
costs of electrical power in phases. This initiative has been commenced in 2012 by minimizing
losses and optimizing energy mix for the fuel of power generation plants by particularly
minimizing fuel consumption while assuring and maintaining adequate supplies of
geothermal, coals and other energy sources. Moreover, the Government will restructure PT
PLN (Persero). It is to make sure than PT PLN (Persero) will suffer liquidity and funding
difficulties, for which the Government will provide business margin 7 percent in 2013. It is
also to increase the financial condition and bankability of PT PLN (Persero) as evident from
Consolidated Interest Coverage Ratio (CICR) above 2 percent – a requirement that must be
complied with by PT PLN (Persero) for global bond issuance in international markets. With
margin 7 percent in 2013, proceeds collected from the bonds (loans) in international markets
will be used to finance development investments in 2013, which in the majority consist of
transmission, distribution and sub-station development. Impacts expected from this
development are: (1) the volume of power sold increased; (2) electrification ratio increased;
and (3) fuel consumption in power generation plants decreased by intensifying the efficiency
and consumption of coals, gas, geothermal, water and biodiesel including solar energy.
Apart from the above policies, electricity subsidy in 2013 is also based on assumptions and
parameters as follows: (1) ICP US$100.0 per barrel; (2) rupiah exchange rate Rp.9.300.0
per US dollar; (3) increase of electrical rate tariff at around 15 percent on the average; (4)
business margin of PT PLN 7 percent; (5) higher volume of power sold; and (6) losses 8.5
percent. Based on these policies and parameters, budget allocated to electricity subsidy in
APBN 2013 is planned to amount Rp.80.9 trillion (0.9 percent of GDP) or Rp.16.0 trillion
Financial Notes and Indonesian Budget 2013
4 -9 3
Chapter IV
Central Government Expenditure
TABLE IV.16
ELECTRICITY SUBSIDY, 2012 - 2012
No
PARAMETER
1
ICP (US$/bbl)
2
Exchange Rate (Rp/US$)
3
TTL (%)
4
Growth Sales (%)
Energy sales (TWh)
5
Losses (%)
6
Fuel Mix
2012
APBNP
2013
APBN
105,0
100,0
9.000,0
9.300,0
-
15,0
7,0
9,0
167,2
182,3
8,50%
8,50%
5,5
4,3
- High Speed Diesel/HSD (million KL)
- IDO (million KL)
1,4
- Marine Fuel Oil/MFO (million KL)
1,7
-
38,1
48,8
- Gas (million BBTU)
0,3
0,4
- Geohermal (TWh)
3,4
4,2
0,01
0,01
- Coal (million ton)
- Bio Diesel (million KL)
7
Margin (%)
Subsidy of the Year (Miliar Rp)
Underpayment of previous year (miliar Rp)
Subsidy (accrued and cash) (Miliar Rp)
7%
7%
60.466,6
78.627,1
4.506,8
7.310,7
64.973,4
85.937,8
Carry over to coming years
(5.000,0)
TOTAL SUBSIDY(Miliar Rp)
64.973,4
80.937,8
Source: the Ministry of Finance
higher than its allocation in APBNP 2012 reaching Rp.64.9 trillion (0.8 of GDP). In the
estimated realization 2012, electricity subsidy is expected to reach Rp.89.1 trillion.
Non-Energy Subsidy
Non-energy subsidy expenditure in APBN is to collect budget allocated for food subsidy,
fertilizer subsidy, seed subsidy, PSO subsidy, interest subsidy of program credits, and tax
charged to the Government (DTP) subsidy. In APBN 2013, this non-energy subsidy is planned
at Rp.42.5 trillion (0.5 percent of GDP) or Rp.0.2 trillion lower than its budget allocation in
APBNP 2012 for non-energy subsidy, which reached Rp.42.7 trillion.
Budget for food subsidy in APBN 2013 is planned to reach Rp.17.2 trillion (0.2 percent of
GDP). This sum is Rp.3.7 trillion lower than expenditure ceiling for food subsidy in ARPB
2012 recording Rp.20.9 trillion (0.2 percent of GDP). This food subsidy is provided by selling
TABLE 4.17
FOOD SUBSIDY, 2012 - 2013
DESCRIPTION
1. Raskin Quantum(ton)
a. Target (RTS)
b. Distribution
c. Allocation (kg/RTS/distribution)
2. Price Subsidy
a. HPB (Rp/kg)
b. Selling Price (Rp/kg)
TOTAL (trillion rupiah)
2012
2013
APBNP
APBN
3.672.481,5
17.488.007,0
14,0
15,0
2.795.561,5
15.530.897,0
12,0
15,0
5.698,1
7.298,1
1.600,0
6.151,9
7.751,9
1.600,0
20,9
17,2
Source: the Ministry of Finance
4 -9 4
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
rice to the target households (RTS) at affordable price for low-income people. It aims to give
access to foods, either physically (rice available at the nearest distribution points) to the
target households. In 2013 this food subsidy program is expected to cover 15.5 million target
households (RTS) with the provision of 2.8 million ton affordable rice by Bulog. These supplies
will be distributed in 12 batches with allocation of 15 kg per RTS per month and the selling
price of this rice for the poor (raskin) of Rp.1,600 per kg. The number of 15.5 million RTS
(target households) is acquired from social protection program survey (PPLS) 2011 by Central
Bureau of Statistics (BPS), and lower than RTS number in 2012 recording 17.5 million.
To support food resilience with the target of 10 million ton of rice surplus for the next 5 – 10
years, facilitation of agriculture input with the distribution of subsidized seeds and fertilizer
must be intensified. According to RKP 2013 targets to pursue with respect to food resilience
improvement are: (1) GDP of agriculture,
TABLE 4.18
FERTILIZER SUBSIDY, 2012 - 2013
fishery and forestry sector to increase by 3.9
percent, (2) rice production to increase by
2012
2013
Description
Unit
APBNP
APBN
6.25 percent, corn by 8.3 percent, soybean
of Fertilizer
by 18.4 percent, sugar by 9.2 percent, cow/ Type
Urea
Thousand ton
4.755,4
4.993,2
Thousand ton
3.742,3
3.879,4
buffalo meat by 9.5 percent; and fish by Non Urea
Organik
Thousand ton
426,0
468,6
24.43 percent; (3) Government’s food HPP Fertilizer
Thousand ton
3.281,0
3.445,0
reserve to rise to minimum 1 million ton of Urea
Non Urea
Thousand ton
3.826,2
3.993,5
rice and more food reserves of regional Organic
Thousand ton
1.863,7
1.967,2
Fertilizer
governments and communities; (4) quality HET
Urea
Thousand ton
1.800,0
1.800,0
of food consumption enhanced with the Non Urea
Thousand ton
1.900,0
1.900,0
Organic
Thousand ton
500,0
500,0
realization of Good Dietary Pattern (PPH) Subsidi
Billion Rp
5.685,0
6.288,5
score 91.5; (5) quality of agriculture, fishery Urea
Non Urea
Billion Rp
7.702,4
8.872,0
and forestry products enhanced according Organic
Billion Rp
571,2
670,0
Billion Rp
314,0
to the established quality and standards; (6) Fertilizer Direct Subsidy
Underpayment
coverage of agriculture, fishery and forestry Year 2010
Billion Rp
84,2
Billion Rp
13.958,6
16.228,8
extension services broadened; and (7) Total Subsidy
Source: the Ministry of Finance
institutions of agriculture, fishery and
forestry actors widespread.
To realize the expected food resilience, budget allocation for fertilizer subsidy in APBN 2013
is estimated to amount Rp.16.2 trillion (0.2 percent of GDP) or Rp.2.3 trillion higher than
the ceiling of fertilizer subsidy set in APBNP 2012 recording Rp.13.9 trillion (0.2 percent of
GDP). Budget allocation of fertilizer subsidy in 2013 has included budget to offset under
payment of fertilizer subsidy in 2010 reaching Rp.84.2 billion. (see Table 4.18) and the
planned direct subsidy provision to farmers worth Rp.314.0 billion.
Meanwhile, to increase
agriculture production and
food resilience program, the
Government has allocated
seed subsidy. This subsidy is
to provide seeds of paddy,
corns and soybeans at
affordable prices for the
farmers. The allocation of
TABLE 4.19
SEED SUBSIDY, 2012 - 2013
APBNP 2012
No
1
2
3
4
5
6
DESCRIPTION
Non-Hybrid Paddy
Hybrid Parry
Composite Corn
Hybrid Corn
Soybean
Water consumption fee from PT Jasa Tirta (M3)
TOTAL
Volume
(ton)
70.000,0
1.000,0
2.500,0
2.500,0
23.482,0
Price Subsidy
(thousand/to
n)
1.400
2.075
8.407
2.387
106
Total
(billion
Rp)
98,0
2,1
21,0
6,0
2,5
129,5
Volume
(ton)
120.000,0
7.500,0
2.000,0
7.500,0
15.000,0
APBN 2013
Price
Subsidy
(thousand
/ton)
6.450
49.000
8.200
19.000
10.250
Total
(billion
Rp)
774,0
367,5
16,4
142,5
153,8
1.454,2
Source: the Ministry of Finance
Financial Notes and Indonesian Budget 2013
4 -9 5
Chapter IV
Central Government Expenditure
seed subsidy budget in APBN 2013 is expected to amount Rp.1,454.2 billion. This sum is
Rp.1,324.7 billion higher than its subsidy ceiling in APBNP 2012 recording Rp.129.5 billion.
This increase is mainly attributed to budget reallocation of Agriculture Ministry BA to seed
subsidy Rp.1,316.2 billion.
To give financial compensation to SOEs
PSO SUBSIDY, 2012-2013
assigned to perform Public Service
(billion rupiah)
Obligation (PSO), such service provision
in certain regions and/or the charge of
2012
2013
No
APBNP
APBN
lower prices than market prices (e.g. sea
transport and railways transport of 1 PT KAI
770,1
704,8
economy class), in APBN 2013 budget 2 PT Pelni
1.024,0
726,5
allocation for PSO subsidy is to amount 3 PT Posindo
272,5
84,8
89,8
Rp.1.5 trillion. This sum is lower than the 4 LKBN Antara
ceiling of PSO subsidy expenditure set in
Total
2.151,4
1.521,1
APBNP 2013 of Rp.2.2 trillion. The lower
PSO budget in 2013 is due to the Source: the Ministry of Finance
reallocation of PSO subsidy budget for PT Pos to other expenditure budget starting from
fiscal year 2012. This PSO subsidy budget in will be allocated to respectively PT Kereta Api
(Persero) Rp.704.8 billion for assignment of railway transport service provision for passengers
at economy class; PT Pelni Rp.726.5 billion for assignment of sea transport service provision
for passengers at economy class; and Perum LKBN Antara Rp.89.8 billion for assignment of
news services consisting of texts, photos, radio, multimedia, English news and television.
To support food resilience and
TABLE 4.21
PROGRAM CREDIT INTEREST SUBSIDY
energy diversification program,
2012-2013
(billion rupiah)
the Government will continue
2012
2013
DESCRIPTION
its policy of granting interest No
APBNP
APBN
Pattern (PNM)
7,8
4,9
subsidy for program credits in 21 Ex-KBLI
Food & Energy Resilience Credit (KKPE)
224,9
213,3
3,2
5,2
the forms of: (1) credit interest 3 Risk Sharing KKP-E
for Bio-Energy Development and Plantation Revitalization (KPEN-RP)
88,1
96,7
subsidy for food and energy 45 Credit
Interest Subsidy for Enterpreneurs in NAD and NIAS
5,0
2,5
801,1
824,7
resilience program (KKP-E); 6 Service Fee for People Business Credit Insurance (KUR)
7 Cow breeding credit
42,6
38,2
(2) including the provision of 8 Warehouse receipt scheme subsidy
1,1
1,1
116,0
42,1
budget for risk sharing to the 9 Interest Subsidy for Non Subsidy Fuel Facility and Infrastrucure
10 Interest Subsidy for water
4,3
20,0
problem KKP-E charged to the
TOTAL
1.293,9
1.248,5
Government; and (3) credits Source: the Ministry of Finance
for bio-energy development and
plantation revitalization (KPEN-RP). Apart from allocation to these three schemes, the subsidy
for program credit interests, which aims to lessen the burdens of people in satisfying their
funding requirements with relatively low interest rate, is allocated for (1) program credits of
ex-BI Liquidity Credits managed by PT Permodalan Nasional Madani (PNM); (2)
entrepreneur empowerment credits in NAD, North Sumatra, West Sumatra, Jambi, and
West Java; (3) Yield of Security Services of People’s Business Credits (KUR); (4) Cow Hatchery
Credits (KUPS); (5) warehouse receipt subsidy scheme; (6) interest subsidy for water supply;
and (7) subsidy for non-subsidized fuel facility and service credits. With these policy measures
it is expected that budget allocation for subsidy of program credit interest in APBN 2013
amount Rp.1,248.5 billion. This sum is lower by Rp.45.4 billion if compared with its
expenditure ceiling of interest subsidy for program credits in APBNP 2012 set at Rp.1,293.9
billion.
4 -9 6
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
TABLE 4.22
Like in previous years, in 2013 the
TAX SUBSIDY (DTP) 2012 - 2013
(trillion rupiah)
Government also allocates budget for
tax subsidy consisting of tax charged to
2012
2013
DESCRIPTION
No
APBNP
APBN
the Government (DTP) in amount of
Rp.4.8 trillion comprising income tax 1. Income Tax (PPh)
3,7
3,8
(PPh) subsidy and import duty facility.
- PPh for geothermal commodities
0,8
0,8
This sum is higher than budget allocated
PPh for yields of SBN issued in international
2,8
3,0
markets
for tax subsidy in APBNP 2012 reaching
0,6
1,0
Rp.4.3 trillion. In 2013, budget 2. Import Tax Facility
- Import Tax Facility
0,6
1,0
allocation of tax subsidy of income tax
Total
4,3
4,8
charged to the Government (PPh DTP)
Source: the Ministry of Finance
is planned to reach Rp.3.8 trillion. It
consists of PPh DTP for geothermal Rp.0.8 trillion and PPh DTP for yield of SBN issued in
international markets Rp.3.0 trillion. Meanwhile, as to subsidy for import duty facility charged
to the Government in 2013 is expected to record Rp.1.0 trillion.
Budget Allocation for Grant Expenditure
In APBN 2013 budget allocation for grant expenditure is anticipated to record Rp.3.6 trillion,
which implies an increase of Rp.1.8 trillion if compared its ceiling set in APBNP 2012 that
only reached Rp.1.8 trillion. Policy of grant expenditure budget allocation in 2013 will be
directed to support capacity building of regional governments in delivering public basic services
such as in transportation, water supply facilities, wastewater treatment plants, irrigation,
sanitation and geothermal exploration. The fund of grants to regions come from foreign
sources that may consists of loans for further subsidiary (SLA) with the following breakdowns:
First, grant expenditure from foreign loans: (1) Mass Rapid Transit (MRT) program Rp.3.1
trillion from Japan International Cooperation Agency (JICA); and (2) Water Resources
and Irrigation Sector Management Project-Phase II (WISMP-2) Rp166.9 billion from World
Bank.
Second, grant expenditure coming from foreign subsidiary grant, i.e.: (1) Water Supply Grant
Rp.234.1 billion from Australias Government; (2) Wastewater Grant Rp.9.4 billion from
Australian Government; (3)
(3) Development of Seulawah Agam Geothermal in NAD Province Rp61.2 billion from
Germany Government; and (4) Australia – Indonesia Grant for Sanitation Development
Rp93.6 billion from the Australian Government.
Further elucidation of projects/activities financed under grant expenditure budget is as follows.
MRT project is expected capable of dealing with traffic congestion in Jakarta, supporting
and bolstering economic growth of Jakarta with efficient urban transportation system,
generating employment opportunities, and enhancing the quality of Jakarta environment
and supporting the mitigation of climate change impacts. WISMP-2 has objectives of building
the performance capacity of water resources/watershed management units and irrigation
management units and increasing irrigated agriculture productivity in some provinces and
districts (kabupaten).
Water Supply and Wastewater Grant Program aims to develop drinking water connections
for low-income households and to improve access to piped wastewater system to realize
Millenium Development GOals (MDGs). Development of Seulawah Agam Geothermal in
Financial Notes and Indonesian Budget 2013
4 -9 7
Chapter IV
Central Government Expenditure
NAD Province is to finance geothermal exploration in Seulawah of Nangroe Aceh Darussalam
province and expert services consisting of training activities to Seulawah geothermal team.
Australia-Indonesia Grant for Sanitation Development is grant to accelerate developmental
activities in sanitation sector (solid waste and wastewater) granted to regional governments
that have prepared their sanitation development plans.
Budget Allocation of Social Aids
To augment the quality of living standards of people, for the last few years, the Government
assures and commits to intensify the implementation of social security for overall Indonesian
people, especially to meet their basic needs, i.e. education and health. In education sector,
the Government continually performs BOS program and aids for students of poor households
to promote inclusive education. In health sector, the Government has instituted Jamkesmas
and Jampersal programs to enhance the quality of health services to public. Starting from
2014, the Government will introduce national social security scheme (SJSN) program aiming
to give protection and social welfare for all Indonesian people, especially the implementation
of social insurance in health sector in 2014 as mandated in Law Number 40 of 2004
concerning National Social Security Scheme (UU SJSN) and Law Number 24 of 2011
concerning Social Security Organizing Body (UU BPJS). In APBN 2013, budget allocation
for social aids is expected to record Rp.73.6 trillion (0.8 percent of GDP). This sum reflects an
decrease of Rp.12.4 trillion (14.4 percent) if compared with its budget ceiling of social aids
earmarked in APBNP 2012 set at Rp.86.0 trillion (1.0 percent of GDP). This decrease is
particularly due to the reallocation of social aids of capital character to capital expenditure
such as State Capital Participation (PNPM) in infrastructure sector. However to improve the
economic capacity and prosperity of people, the scole of social aid beneficiaries and their
value will be also increased. Budget allocated to social aids in APBN 2013 consists of: (1)
social aids allocation channeled through K/L Rp.69.6 trillion, and (2) reserve fund allocation
for natural disaster management through BA BUN Rp.4.0 trillion.
Some priority programs including in social aid category in 2013 are: (1) BOS program
coordinated by the Ministry of Religions with budget allocation planned to amount Rp.4.0
trillion and BOS for Secondary Education coordinated by the Ministry of Education and
Culture Rp.1.1 trillion; (3)schoolarship facilities for poor students and university students
with budget allocation Rp.6.5 trillion; (4) Jamkesnas and Jampersal with budget allocation
of Rp.8.1 trillion consisting of basic helath service program in Puskemas and thier networks
of Rp.1.0 trillion, referential health service program at class III in general hospitals and
private hospitals as assigned by the Government with budget allocation of Rp.5.5 trillion and
Jampersal (childbirth) service with budget allocation of Rp.1.6 trillion; (5) PNPM Mandiri
consisting of, among other things, PNPM Perkotaan Rp.1.7 trillion and regional socialeconomic infrastructure development (PISEW) Rp.77.0 billion; and (6) PKH or conditional
cash aids with budget allocation of Rp.2.8 trillion.
BOS program is a mandate of Article 34 Law Number 20 of 2003 concerning National
Education System stating that the Government and Regional Government must ensure
compulsory education minimum affordable basic education. The objective of BOS program
is to exempt tuition fees for poor students and lessen the burdens of other students so that all
students can access more quality basic education services and graduate. BOS program is
awarded to education units at SD/MI/Ula and SMP/MTs/Wustha aiming to abate the
4 -9 8
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
burdens of people, notably low-income households in respect of education fees with a view
to lowering dropout rate. BOS budget in 2013 coordinated by the Ministry of Religions is
dedicated to around 6.3 million MI/Ula and MTs/Wustha students. The Government is also
promoting the 9-Year Compulsory Education Program and plans to expand this program
up to universal middle education with BOS Program for Middle Education dedicated to some
8.9 million students of SMA, SMK and MA to expand and augment equal access to quality
middle education services, which concern about gender mainstreaming and relevant to the
needs of people.
For education quality improvement, the Government also allocated budget of education
aids for poor students from basic education to higher education. Education aid program for
poor students in 2013 will be allocated for respectively some 5.2 million students of SD/SDLB
and SMP/SMPLB and for some 2.4 million students of MI/Ula and MTs/Wustha, and for
some 1.2 million students of SMA and SMK, and for some 393 thousand students of MA, and
for some 142 thousand students of universities, and for some 68 thousand students of Religion
Colleges.
To broaden public access to basic health services, especially for the poor, some health insurance
schemes that have been launched in previous years under Jamkesmas and Jampersal
programs will be continued and expanded. In 2013, Jamkesmas program is targeted to around
86.4 million persons consisting of improved access of poor and low-income people to referencial
class III health services in certain general hospitals and private hospitals as assigned by the
Government and maternal services (Jampersal) for some 2.7 millions pregnant mothers.
This Jamkesmas program is the embryo of of SJSN scheme in health sector that will be fully
performed by the Government in 2014.
To improve social protection scheme and as an attempt to accelerate the realization of
Millenium Development Goals (MDGs), especially for poor people, in 2013, the Government
plans to resume PKH program for some 2.4 million RTSM with budget allocation of Rp.2.8
trillion. PKH is a program of distributing cash assistance to RTSM being PKH participants
and have complied with requirements and committment in human resources quality
improvement through better education and health. PKH aids are granted to the beneficiaries
in phases, i.e. 4 times of payments in a year. The sum of PKH aids for RTSM per year is as
follows:(1) permanent aids for RTSM Rp.200,000; (2) for pregnant mothers/mothers in
chilbed who have under five babies Rp.800,000; (3) for RTSM with children at SD/MI school
age Rp.400,00; (4) for RTSM with children at SMP/MTs age school Rp.800,000. Thus the
minimum aids per RTSM will be Rp.600,000 and maximum Rp.2,200,00 (with 3 children).
The targets entitles to receive this aid are: (1) pregnant women and mothers in chilbed; (2)
children/under five babies (0 – 6 years old) of RTSM who will receive health services; (3) 5
– 7 years old children not yet attending basic education; and (4) 15 – 18 years old children of
RTMS not yet accomplish basic education.
To maintain the sustainability of poverty reduction program with the empowerment of overall
social components that have been carried out in previous years, in 2013 this program will be
continued with the harmonization of various community empowerment based poverty
alleviation programs involving many sectors into PNPM Mandiri. The revision and expansion
of community based development program will made through empowerment activities in
10,922 kelurahan and regional social-economic infrastructure development (PISEW) by
empowering 79 kecamatan (sub-districts).
Financial Notes and Indonesian Budget 2013
4 -9 9
Chapter IV
Central Government Expenditure
Meanwhile, budget of social aids allocated through General State Treasury Budget Section
(BA BUN) is reserve fund for natural disaster management. In 2013, the allocation is
earmarked to amount Rp.4.0 trillion. This fund is to protect people from various impacts of
natural disasters with the following activities: (1) pre-disaster stage for prevention and
alertness to deal with the disaster; (2) response emergency stage after the disaster; and (3)
post-disaster recovery stage with rehabilitation and reconstruction process.
Total budget for social aids in 2013 has included expenditure budget of capital character
producing assets or classfied as Government investment spending but according to
Government Accounting Standard recorded as social aids such as for community
empowerment and post-disaster rehabilitation and reconstruction. (see Box 4.2.).
Budget Allocation of Other Expenditure
Policy of other expenditure in APBN 2013 is to accomodate: (1) anticipation to the changing
macroeconomic assumptions with the provision of fiscal risk reserve fund, such as: changes
in macroeconomic assumptions and lan capping risk; (2) the provision of operational costs
for agencies not yet having their own budget section (BA) code and contribution to
international agencies; (3)operational costs for state agencies not yet having their own budget
section (BA) code; (4) contribution to international agencies; (5) support to food resilience
with the allocation of reserve fund for Government’s rice reserve (CBP), national seed reserve
(CBN), and food price stabilization reserve; (4) the provision of budget allocation for transport
fees of rice for public servants assigned in the hinterland districts of Papua Province and
West Papua Province; (7) budget allocation for assignment to PT SMI in facilitation of Project
preparation under Public Private Partnership scheme for the Development of Railway Track
connecting Soekarno Hatta Airport – Manggarai and Umbulan Waster Supply Project; (8)
budget allocation for shelter construction as part of disaster management; (9) budget
allocation for development acceleration program in Nusa Tenggara Timur (NTT) and
economic empowerment for low-income people (MBR) 2013; (10) the provision of preliminary
fund for the operation of Financial Service Authority (OJK); (11) budget reserve for
socialization/education/advocacy to the public with regard to National Social Security Scheme
(SJSN) and Social Security Organizing Body (BPJS); (12) budget allocation for the host of
APEC Meeting 2013; (13) budget allocation for hitech researches; (14) budget allocation for
development acceleration in Madura and Papua and West Papua (P4B); (15) budget allocation
for livestock development; (16) budget allocation for viability gap fund (VGF) for Umburan
Water Supply (SPAM) project and SPAM Bandar Lampung; (17) operational assistance for
universal post services; and (18) fund reserve for Special Region of Yogyakarta (DIY).
With regard to VGT, this allocation is Government’s support to promote investment in
infrastructure sector that may consist of fiscal contribution in cash for part of costs of project
developed under Public Private Partnership scheme in effort to provide infrastructure services
affordable by the communities. The objectives of VGF are: (1) to encourage the interests of
business entities to participate in PPP projects, which are economically feasible but not
financially viable; (2) to ensure the implementation of infrastructure projects with reference
to the established quality and time; and (3) to improve the provision of infrastructure at
affordable tariff according to the capacity of people. Meanwhile, feasibility support is granted
under the following principles: (1) the projects must comply with eligibility criteria to get this
feasibility support; and (2) approval of feasibility support must be mentioned in bid documents.
4-100
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
Universal Post Services (LPU) are special post services that must be secured by the Government
to reach overall regions within the Unitary State of Republic of Indonesia that will enable
the citizens to send and/or receive post from one place to another across the world (Law
Number 38 of 2009 concerning Posts). The use of LPU allocation in 2013 is to provide/
maintain post service capacity in 2,357 units of Branch LPU offices in 11 areas of Indonesia.
The assignment of universal post services from the Government to PT Post Indonesia aims
to assure the people will receive services in: (1) letters, warkat post, printed materials and
small packages (containing goods) up to 2 (two) kilograms; (2) secogram until 7 (seven)
kilogram); (3) printed goods sent in special bags sent to the recipients until 20 (twenty)
kilogram; and (5) instant cash transfer services insofar supported with telecommunication
networks. The expected outcome is that all people living outside the cities will receive post
services in sustainable manner at affordable price.
For fund reserve budget for Special Region of Yogyakarta (DIY), the allocation is as the
continuation of Law Number 13 of 2012 concerning the Speacialities of Special Region of
DIY, particularly Article 42 paragraph (1) stipulating that the Government will allocated
fund for the governance of Special DIY in APBN as needed by DIY and financial capacity of
the Government. The authorities of DIY in this special governance include: (1) procedures
in the election, status, tasks and authorities of Governor and Vice Governor; (2) intitutions
within DIY government; (3) culture; (4) spatial planning. The implementation of this reserve
fund for DIY to run the governance of Special DIY will be further established according to
the applicable laws and regulations.
Budget allocation for other expenditure in APBN 2013 is planned to record Rp.20.0 trillion
(0.2 percent of GDP) consisting of allocation for fiscal risk reserve Rp.5.5 trillion, other
expenditure Rp.14.5 trillion. This allocation shows a decrease of Rp.48.6 trillion or 70.8 percent
if compared with its ceiling in APBNP 2012 recording Rp.68.5 trillion (0.8 percent of GDP).
This lower allocation in 2013 is attributed to no allocation of some items budgeted in 2012
but not in 2013. Such as energy risk reserve, which in 2012 is allocated Rp.23.0 trillion,
compensation of fuel price increase in 2012 allocated Rp.25.6 trillion, and fuel conversion to
gas for the development of compressed natural gas (CNG) and liquified gas for vehicle
(LGV) infrastructure, which in 2012 receiving budget allocation Rp.2.1 trillion. However,
on the other side there are some budget items in APBN 2013 not allocated in 2012. They
include preliminary budget for the operation of Financial Service Authority (OJK) of Rp.1.7
trillion, shelter construction as part of disaster management Rp.1.0 trillion, higtech research
Rp.1.0 trillion, development acceleration in Papua and West Papua Province (P4B) Rp.1.0
trillion, livestock development Rp.1.0 trillion and NTT development acceleration and economic
empowerment for low-income people in 2013 of Rp.931.8 billion.
Budget allocation for fiscal risk reserve in APBN 2013 is to deal with changing macroeconomic
assumptions, food price stabilization, and land capping risk. Fiscal risk reserve fund is to
anticipate possible deviation of macroeconomic indicator trend and the specified
macroeconomic assumption that is expected to generate negative impacts to APBN posture,
for example economic growth assumption and rupiah exchange rate to US dollar. The
Government also allocates reserve fund for food price stabilization aiming to lessen the impacts
of soaring food prices to poor people and can spark inflation. Moreover, the Government
provides reserve fund for land capping risk to show the Government’s support on land
acquisition financing for toll road construction. To promote investment climate in toll road
development in Indonesia, the Government has set the limits of land acquisition costs that
Financial Notes and Indonesian Budget 2013
4-101
Chapter IV
Central Government Expenditure
must be shouldered by business entities, i.e. at the highest values with the provisions as
follows:
a. One hundred and ten (110) percent of land acquisition costs as provided for in toll road
operation agreement (PPJT).
b. One hundred (100) percent of land acquisition costs in PPJT plus two (2) percent of
investment costs in PPJT.
This Government’s support is provided in the form of funding to land acquisition costs
exceeding land acquisition costs that must be borne by business entities.
Based on such policies, busget allocation for fiscal risk reserve in APBN 2013 is planned to
amount Rp.5.5 trillion (0.06 percent of GDP). This sum is to rise by Rp.22.4 trillion or 80.3
percent if compared with its ceiling set in APBNP 2012 at Rp.27.9 trillion (0.3 percent of
GDP). This decrease of budget allocation for fiscal risk reserve in 2013 is due to the no
Box 4.2
CAPITAL EXPENDITURE AND GOVERNMENT INVESTMENT
EXPENDITURE
The Core Message:
The adoption of terminology “Capital Expenditure” in various national development policy
formulation events should be appropriately replaced with “Investment Expenditure”. During
the discussion of national development programs and budgeting (APBN) it is frequently found
out the adoption of same terminologies to refer different meanings and definitions. The most
frequently misinterpreted words are capital expenditure, which actually refer to investment
expenditure. An example of inappropriate statement says that capital expenditure in APBN must
be increased so as to bolster economic growth and augment the welfare of people. The context of
capital expenditure in such statement is more appropriate to be interpreted as investment
expenditure.
In view of worries about potential impacts to policy formation that may bias from the expectation,
it is therefore deemed necessary to correct the adoption of such terminologies and definitions.
The following brief explanation will point out the meanings and definitions of capital expenditure
and investment expenditure. Capital expenditure has different meaning and definition from those
of investment expenditure. The former is the classification of a type of expenditure transactions
in budget management under accounting principles. Types of expenditure transactions normally
referred to as types of expenditures consist of personnel spending, material spending, capital
spending, interest, subsidies, grant, social aids and other expenditure. The accounting principles
said that a type of expenditure transaction can be classified as capital expenditure if the said type
of expenditure transaction complies with criteria of asset generation and used and recorded by
K/L. Meanwhile, investment expenditure more refers to the use of expenditure based on its longterm impacts to the economy (e.g. economic growth and employment) ignoring the types of
transactions as established under accounting principles and asset recording aspect.
Capital expenditure according to accounting principle is defined as the expenditure spent to pay
the acquired assets and/or to increase the values of fixed assets/other assets established by the
Government. The said fixed assets/other assets are used to support the day-to-day operational
activities of a working unit or dedicated for the public but recorded in asset registration of K/L
4-102
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
concerned and not for sales/transfer to the public/local government. Under this definition, there
are some fundamental issues relating to capital expenditure, i.e.: (1) assets generated, (2) the
outcomes of assets extending more than one accounting period, (3) beyond minimum
capitalization limit, and (4) assets used and recorded by K/L.
Having different perspective from capital expenditure, the Government investment expenditure
is part of overall Government Expenditure (Government or G element) in macroeconomic concept,
which is expressed in equation GDP = C + I + G + (X – I). Government Expenditure in such
macroeconomic concept is further classified into Government Consumption Expenditure (G)
and Government Investment Expenditure (G I E). Consumption expenditure aims to finance the
routine and consumable operation of Government with short-term multiplier effects. As for
investment expenditure, it is intended to form assets (capital stock) in future, which is expected
to exert greater and more sustainable multiplier effects for the economy. Investment expenditure
is classified into productive investment expenditure, which is either direct or indirect character.
Direct productive investment expenditure includes land purchase and physical goods/equipment
procurement that will increase physical capital stocks and enhance output in future. This kind of
productive investment must be backed with various supporting investments such as road
construction, power generation, water supply and sanitation, communication facilities, etc.,
which all of them are absolutely necessary to support and integrate any and all productive
economic activities. Whilst, indirect productive investment expenditure includes, for example,
investment in human resources development expected to generate positive impacts to manpower
productivity that in turn will extend the production scale and enhance output growth in sustainable
manner for long-term period. Thus, investment expenditure relates to: (1) all types of expenditures
under accounting principles, which is not only capital expenditure, used for asset formation in
future, (2) expenditure generating great and more sustainable multiplier effect for the economy.
Based on the above definition, there is similarity and difference of capital and investment
expenditures. Their similarity concerns that these two expenditures are to generate assets with
sustainable impacts and used and recorded in K/L. This sameness is further narrowed to
expenditure producing capital goods with outcomes extending more than one accounting period
such as cars, buildings, equipment and machines, road development, bridge development and
airport development. Apart from similarity, these two expenditures record/classify the types of
expenditure in different way in APBN. Types of expenditure transactions classified as investment
expenditure are: (1) expenditure used for research and capacity building, (2) administration for
national development priorities, or (3) capital goods not used and recorded by K/L but transferred
to other parties. According to accounting principles, expenditure transactions of this type are
recorded as material expenditure for point (1) and (2) and as social aids for point (3).
The conclusion is that the use of terminology of expenditure by type of expenditure transactions
and by macroeconomics is not always 100 (one hundred) percent parallel due to different point
of view. Accordingly, the use of data on capital expenditure can’t be adopted to represent
investment expenditure and vice versa. Referring to the history of state finance management,
the consumption and investment expenditure of the Government adopted in old APBN (before
fiscal year 2005) composed of routine and development expenditures. The former is to represent
Government consumption expenditure and the latter is the representation of Government
investment expenditure.
Consistent with state finance management reform as mandated in Law Number 17 of 2003, APBN
(starting from 2005) is classified by organizations, functions and types of expenditure. This
expenditure classification is no longer made under routine and development approach, but under
8 (eight) types of expenditure as prescribed in the internationally accepted GFS Manual 2001 as
best practices. They include: Personnel Expenditure; Material Expenditure; Capital Expenditure;
Loan Interest Expenditure; Subsidies; Grants; Social Aids; and Other Expenditure. The adoption
Financial Notes and Indonesian Budget 2013
4-103
Chapter IV
Central Government Expenditure
of this type based expenditure classification is a new paradigm in APBN preparation. It aims to
provide objective and proportional illustration with regard to Government activities and to
maintain consistency with public sector accounting system and to facilitate the presentation and
to enhance the credibility of Government financial statistics. The change or transfer from old
paradigm to new paradigm is evident from the changing APBN posture as illustrated in diagram
that follows.
In other words, investment expenditure spent by the Government has broader scope or definition
than capital expenditure. Today, the types of expenditure transactions in APBN categorized in
investment expenditure include government expenditure group (e.g. central government
expenditure and transfer to regions) or financing expenditure group consisting of:
1. Central Government Expenditure
- Physical assets procurement under the control of the Government;
- Costs for deconcentration and co-administration;
- Costs for consulting services on intellectual rights;
- Costs for profession services on capacity building;
- Costs for the maintenance of asset values;
- Coast for the procurement of assets for transfer to public.
Thus far, these costs are classified into capital expenditure, material expenditure, social aids and
other expenditure.
2. Transfer to Region
- The transfer of Special Allocation Fund (DAK) per sector that can produce infrastructure in
regions according to the purpose of its allocation;
- The transfer of adjustment fund such as Facility and Infrastructure Fund (which its code and
description is to change every year subject to agreement reached by the Government and DPR).
3. Financing Expenditure
State Capital Participation (PMN) that will produce investments of the Government either in
State Owned Enterprises (SOEs) or other agencies including guarantee secured by the Government.
The trend of capital expenditure and investment expenditure in APBN 2013 is presented in table
and graph that follow. Based on the said table, the investment expenditure composes of:
1. Central Government Expenditure
- Overall capital expenditure can be classified into investment expenditure,
- Material expenditure that can be categorized as investment expenditure includes non-binding
and non-operational expenditure such as maintenance costs and goods procurement not for
the transfer to public/local government,
- Social aid that can be categorized as investment expenditure includes budget with physical
output or classified as assets if recorded by the Government, such as budget for Community
Empowerment National Program (PNPM),
- Other expenditure that can be categorized as investment expenditure include: land capping
risk, the development of Sabang Free-Trade Area, the development of Karimum and Bintan
Areas, Merauke Integrated Food and Energy Estate, and the Assignment to PT Sarana Multi
Infrastruktur (SMI) on Public Private Partnership (PPP).
4-104
Financial Notes and Indonesian Budget 2013
Central Government Expenditure
Chapter IV
2. Transfer to Regions
-
Transfer to Regions that can be classified as investment expenditure include: special allocation
fund for road infrastructure, irrigation infrastructure, water supply infrastructure, and
sanitation infrastructure; additional special autonomy fund for infrastructure.
3. Financing
-
Financing that can be classified as investment expenditure include: Government investment
for infrastructure, State Capital Participation (PMN) for Infrastructure, Home Credit for Healthy
and Simple Houses (KPRSh) and Rusunami, Contingency Fund for State Electricity Company
(PLN), Contingency Fund for Water Enterprises (PDAM), and Revolving Fund for Investments
(Toll Road).
The foregoing table also indicates that capital expenditure in 2013 is to record Rp.184.4 trillion
(11.0 percent of total Government Expenditure in APBN and 2.0 percent to GDP) implying a
growth of 19.2 percent per annum on the average from period 2007 – 2013. If the definition of
capital expenditure is broadened into Government investment expenditure, in 2013 the said
expenditure has reached Rp.356.7 trillion (21.2 percent of total Government Expenditure in
APBN and 3.8 percent of GDP) implying an increase of 21.0 percent per annum on the average
from period 2007 – 2013.
The trend of capital expenditure and investment expenditure during 2007 – 2012 is presented in
the graph that follows.
Financial Notes and Indonesian Budget 2013
4-105
Chapter 4
4-106
Matrix 4.1
Summary of Programs, Performance Indicators and Outcome of Ministries/Agencies
Fiscal Year 2013
No.
1
Program*)
Performance Indicator*)
001 People's Consultative Assembly (MPR) (Rp732,7 billion), including:
1 MPR consitutional task implementation
- Number of review and analysis of constitutional concept and
program including the organs
implementation for MPR and its organs
-
2
002 House of Representatives (DPR) (Rp2.998,3 billion), including:
1 Support Program for the Management and
- Percentage (%) of session, technical and administration according to the
Implementation of Other Technical Tasks of
specified standards and timely in planery meeting
DPR RI
- Percentage (%) of inter-parliamentary cooperation services at
international scale according to the specified standard and timely
2 Facility and Infrastructure Improvement
- Percentage of (%) maintenance, storage and distribution of office
Program for DPR RI apparatus
supplies and equipment and transport modes complying with the
standard
- Constitutional tasks implemented in accorandce with laws and
regulations
7.318
100%
- All activities receive reliable management support
98%
95%
- Planning, implementation, controlling and reporting mechanisms apply
management integrated with up to date and accurate data
-
Percentage (%) security services within MPR/DPR/DPD RI, housing
compound and guest house of DPR RI members complying with the
standard
95%
-
Percentage of review/analysis, academic draft, bills in economic and
financial affairs complying with standards and timely
Persentase reviews/analisis hukum/penyiapan keterangan DPR
yang sesuai standar and tepat waktu
100%
- Law drafting facilitated
100%
- Legal certainty for people in running their life with quality legal products
ensured
80%
- Human resources competency improvement and management supports
-
004 Supreme Auditor (BPK) (Rp2.903,4 billion), including:
1 Support Program for the Management and
- Percentage of complaints followed-up
Implementation of other Technical Tasks of - Percentage of personnel complying with the required competence
BPK
standard
2 Quality Improvement Program for the
Institution, Official and Audit of State Finance
3 State Finance Audit Program
164
Outcome
Percentage of realized program and activities to the plan
65%
90%
-
Percentage of consideration materials issued by BPK
100%
-
Percentage of recommendations followed-up
60%
-
Number of state compensation settlement monitoring reports issued
839
- Institutional, aparatus and administration quality enhanced
- The quality of opinion and consideration expressed enhanced.
- Investigation follow-up action effectiveness improved
Central Government Expenditure
Financial Note and Budget 2013
3 Legislature Function Implementation
Program of DPR RI
3
Number of socialization campaigns of Pancasila, 1945 Constitution,
Unitary State of Republic of Indonesia and Bhinneka Tunggal Ika.
Target
2013
4
Program*)
Performance Indicator*)
005 Supreme Court (MA) (Rp5.325,9 billion), including:
1 Support Program for the Management and
- Standardized public services for public institutions/agencies
Implementation of Other Technical Tasks of
- Quality of financial reports presented according to GOvernment
Supreme Court
Accounting System (SAP), comments on findings of internal and external
auditors, follow-up action of auditor's findings, guiandce and
supervision, evaluation and reporting
2 Facility and Infrastructure Improvement
Program for Supreme Court
-
3 Accountability Supervision and
Improvement Program
4 Education and Training Program for
Supreme Court Officials
-
-
Number of performance supervision and assessment report and the
bahavior of judges and other court officials
-
Number of training and certification for judges and clerks and other
latest materials
Number of research and development activities in laws and justice
according to the needs of judiciary bodies and recommendation of other
working units
Number of criminal cases, industrial relationship court (PHI) with value
less than 150 million including HHsN case and Human Rights case settled
timely
Number of cases settled including high-profile case (HHsN and HAM
cases)
-
5 Supreme Court Case Settlement Program
Number of facilities and infrastructure provided in administrative
division
Number of technical and general facility and infrastructure
at appeal court and district court .
Number of technical, administration supervision of courts and general
administration and complaint resolutions in Supreme Court and the
lower judiciary bodies and socialization of complaint management
system to court officials and communities
-
-
Target
2013
Outcome
Support for the management and technical tasks in judiciary function
12
12
1
Facilities and infrastructure for officials in Supreme Court and the lower
judiciary bodies provided
815
212
Central Government Expenditure
Financial Note and Budget 2013
No
- Quality supervisory function enhanced .
- Standard complaint management
100
1.000
16
-
The quality of human resources in Supervisory Body (Bawas) improved
Quantity of Bawas official sufficient
Spacious building rooms
Professional and competent justice human resources available
- Research reports for legal and justice development as references for the
Supreme Court in making decision available
6.100
- Case settlement administration at first instance degree, appeal degree
and cassasion and juidicial review accelerated
10.000
- Accurate, effective, accountable, transparent and accessible case
information technology management applied
- Human resources quality in case settlement enhanced
- Adequate budget to support cassasion and judicial review cases allocated
- Management and technical support for clerk office
Chapter 4
4-107
5
Program
*)
Performance Indicator*)
006 Attorney General's Office (AGO) (Rp4.362,2 billion), including:
1 Accountability Supervision and
- Number of public complaint reports followe-up and settled and power
Improvement Program for AGO Officials
abuse settled, routine tasks, discipline infringements and case
management by AGO officials in regions
- Number of activities in secretarial affairs within junior AGO for
supervision actions for the coordination, evaluation and monitoring in
following-up the reported complaints.
2 Education and Training Program for the
Officials of AGO
3 Intelligence Case
Investigation/Security/Management
Program
4 General Criminal Case Settlement and
Management Program
300
Quality of supervision to routine and development activities in all AGO
elements enhanced consistent with laws and policies underlined by the
General Attorney.
37
-
Number of management and leadership education and training
Number of Intelligence activities in state finance salvation and criminal
act management .
11
100
-
512 working units
-
Legal counseling and advocacy to enhance the legal awareness of people
in preventing corruption criminal acts .
Number of general criminal act cases accomplished by AGO official at
Kejati, Kejari and Cabjari level
Number of legal actions, pardon and examination to other general
criminal acts
Number of corruption cases settled in pre-prosecution state .
-
Number of grave human right violation cases settled
120.000 cases
40
80
2
Professional capacity, personal intgrity and discipline within AGO
improved
Quality in judicial Intelligence in social, political, financial, economic,
defense and public law and order enhanced .
Quality in pre-prosecution, additional investigation, prosecution, verdic
fixing and court decision, supervision to conditional release and other
legal actions in criminal cases enhanced
Quality in pre-prosecution, additional investigation, prosecution, verdic
fixing and court decision, supervision to conditional release and other
legal actions in economic criminal cases enhanced
Financial Note and Budget 2013
Central Government Expenditure
Technical functional education and training
-
Outcome
1 report
-
5 Special Criminal Case, Grave Human Right
Violation and Corruption Crime Case
Settlement and Management Program
Target
2013
Chapter 4
4-108
No
6
Program
*)
Performance Indicator*)
007 The Ministry of State Secretariat (Rp2.473,2 billion), including:
1 Support Program for the Management and
- Percentage of official/personnel competency assessment reports
Implementation of Other Technical Tasks of
accomplished
the Ministry of State Secretariat
- Percentate of witness and victim protection according to the laws and
regulations
2 Facility and Infrastructure Improvement
Program for the Ministry of State Secretariat
3 Policy Service Support Program to the
President and Vice President
Target
2013
100%
100%
Percentage of building and structure supports in compliance with the
standard
100%
-
Percentage of facility and infrastructure in compliance with the standard
100%
-
Percentage of facility to host state/government leaders during
international sessions/conferences in Indonesia
100%
-
Percentage of security services for the President and Vice President and
the families and other state gusts equal to State/Government Leaders
(VVIP) according to the specified standard
100%
Outcome
- Budget planning and implementation in transparent and accountable and
administration, filing and public relation services according to the
established service standards
- Human resources development within the Ministry of State Secretariat,
institutional restructuring and administation and accountability
improvement in the Ministry of State Secretariat
- Effective inspection and supervision
- Quality of analysis and speed in providing informatics support enhanced
- General service support to state officials and aparatus of the Ministry of
State Secretariat at high quality level and assets maintenance and
management in the Ministry of State Secretariate
Central Government Expenditure
Financial Note and Budget 2013
No
- Initiative permit and bill, draft government regulation, RPP, draf
presidential regulation, law authenticification, government regulation in
lieu of law, Government Regulation and legal opinions and legal problem
analysis and administration, ratification, prerogrative, naturalization and
laws and regulation
- Quality of analysis and speed in domestic and foreign policy support,
material preparation and policy support data enhanced
- Harmonious and synergi institutional relation between the
President/Minister of State Secretary and state institutions, regional
institution, political organizations and community organization
established
Chapter 4
4-109
7
Program*)
Performance Indicator*)
Target
2013
010 The Ministry of Home Affairs (Rp15.782,6 billion), including:
1 Accountability Supervision and
- Percentage of compliance of officials in performing tasks and functions in
90%
Improvement Program within the Ministry of
the Ministry of Home Affairs including:
Home Affairs
Directorate General of Regional Autonomy, Education and Training
Center, Domestic Administration Institute (OPDN) and National Body for
- Percentage of success in implementing coordination, development and
100%
supervision of regional governance
2 Research and Development Program in the
- Research, review and development reports in Regional Development and 17 research/review
Ministry of Home Affairs
Finance affairs presented in seminars and/or published and/or followedreports
up
- Number of research, review and development results in Village
17 research/review
Governance and Community Empowerment presented in seminars
reports
and/or published and/or followed up
3 Education and Training Program for the
- Percentage of quality education and training in Development
80%
Officials of the Ministry of Home Affairs
Management, Demography and Regional Finance
- Percentage of monitoring and evaluation documents, financial, asset and
100%
audit reports accomplished and LHP follow-up to Education and Training
Center at Regional level
4 Regional Development Program
- Percentage of regions facilitated in the preparation of Regional
75%
Regulation (Perda) on Spatial Planning as reference in One-Stop
Integrated Services
(PTSP) (HHsof10.2)
(Cummulative
Targets)
- Percentage
regions
implementing
guidance/policy on spatial use and
85%
control
Financial Note and Budget 2013
-
Number of regions organizing regional head election
-
Number of dismissal and appointment of regional heads and DPRD
accomplished and decided
13 prov
faciliated in
governor/vice
governor election ,
91 kab facilitated in
regent/vice regent
election ,
37 kota faciliated in
mayor/vice mayor
election. PP and
DPRD Code of Ethics
socialized in 33
provinces
13 Governors
91 Regents, 37
Mayors
The performance of tasks and functions in governance operation
increased and financial transparency and accountability improved
The adoption of researh outcomes as recommendations for policy
formulation increased
Number of alumni, suitability of participants with education and training
requirements increased and education and training for officials within
the Ministry of Home Affairs and Regional Government reformed
Quality of regional development planning enhanced, growth maps for
individual regions, areas and zones availiable, and regions considering
their region, area and zone gaps as basis in formulating fiscal balance
(DAK, DAU and DBH) increased and quality of spatial planning,
environmental protection and management enhanced
The implementation of governance affairs and Minimum Service
Standard (SPM) in regions, the performance of regional governance
improved, the progress of New Autonomous Regions evaluated and Basic
Regional Management Stategies prepared , and Law 32 of 2004 revised
Central Government Expenditure
5 Decentralization and Regional Autonomy
Management Program
Outcome
Chapter 4
4-110
No
8
Program*)
Performance Indicator*)
011 The Ministry of Foreign Affairs (Rp5.590,1 billion), including:
1 facility and infrastructure improvement
- Service level in complying with facility and infrastructure requirements
program for officials of the Ministry of
at central and representative level
Foreign Affairs
- Number of development/procurement/rehabilitation of offices/emisary
guest house and other building
2 Foreign Relation and Politic Improvement
- Number of session/discussion for implementation of cooperation in
Program under ASEAN cooperation
political, economic, social and cultural sectors
-
3 Indonesia Role and Diplomacy Improvement Program in Multilateral Cooperation
-
9
Number of activities to maintain the centrality of ASEAN in economic
relation with partner forum (session with partner forum)
Number of Indonesia's initiatives to advocate the reform of Security
Countil in UN
Number of technical coordination for human right advocacy and
protection and human related issue management
The position of Indonesia's diplomacy in preventing the inclusion of
separatism in Indonesia in the end of session
4 Foreign Relation and Political Strengthening
Program and Diplomacy Optimising in Asia
Pacific and Africa Regions
-
5 Diplomacy Optimizing Program in
International Law and Agreement
Management
-
Acoen policy document prepared
-
Number of publi, private and administrative legal service provision,
relating to the Ministry of Foreign Affairs and RI's representatives
012 The Ministry of Defense (Rp81.963,6 billion), including:
1 Defense Technology and Industry
- Number of Primary Weaponry System of Indonesia's Armed Forces (TNI)
Development Program
domestically produced
2 Integrative Defense Force Use Program
100%
60
Roles and leadership of Indonesia in the formation of ASEAN community
in political and security, economic and social-cultural affairs augmented
4
Roles and diplomacy of Indonesia in multilateral issue management
augmented
42
100%
6
Cooperation of RI and other countries in Asia Pacific Region and Africa
fortified
Diplomacy in international laws and agreement reinforced
9 kali
30%
Percentage of additional materials for strategic Alutsista of Indonesian
Navy (TNI AL) in accountable and timely manner
5%
Percentage of preparedness and addition of weapons, electronics and munition of
Indonesian Navy (TNI AL) in accountable and timely Manner
12%
5 Alutsista and Non Alutsista Modernization
and Air Military Force Infrastructure and
Facility Development Program
-
Percentage of achieved MEF for air military force
28%
-
Percentage of capacity and additional number of aircraft fleet to achieve
MEF
24%
85%
43%
48%
- Number of domestically produced Alutsista increased
- Policy for defense industry development accouding to science and
tehnology progress formulated
The use of integrative defense force capable of identifying, deterring, and
destroying threaths in integrated, effective and timely fashion
Alutsista and facility and infrastructure preparedness to reach power and
capacity of Indonesian Army (TNI AD) toward Minimum Essential Force
(MEF)
- The capacity and power of Indonesian Navy (TNI AL) increased and more
operational to support the assigned tasks according to the specified
standard and requirement with high supporting, deterrent and
combating force
Alutsista and facility and infrastructure of Indonesian Air Force (TNI AU)
toward MEF modernized and improved
4-111
Chapter 4
4 Primary Weaponry System (Alutsista) and
Non Alutsista and Sea Military Force Facility
and Infrastructure Modernization Program
-
-
The quality of infrastructure and facility for the Ministry of Foreign
Affairs enhanced
20
46%
-
Outcome
133
Percentage of Law Enforcement and Application in terms of quality and
quantity
Number and coverage of Combat Military Operation (OMP)
Percentage of adequacy of personnel, material and document security
operation and effective and efficient early detection
Percentage of operation preparedness of Army (TNI AD) in weapon and
munition support aspect
3 Land Military Force Preparedness Support
Program
-
Target
2013
Central Government Expenditure
Financial Note and Budget 2013
No
10
Program
*)
Performance Indicator*)
013 The Ministry of Laws and Human Rights (Rp. 575,3 billion), including:
1 Accountability Supervision and
- Percentage of working unit region I reaching the specified standard
Improvement Program for Officials of the
service and performance
Ministry of Law and Human Rights
- Percentage of working unit region I introducing financial accountability
according to the standards to get good opinion of BPK, i.e. WTP
(unqualified opinion)
2 Education and Training Program for Officials - Percentage of graduates in correctional science and techniques
of the Ministry of Laws and Human Rights
3 Legal drafting program
-
-
4 Correctional Development Program
-
5 Imigration Service and Supervision
Improvement Program
-
50
Outcome
Quality of supervision to the performance of tasks and functions of the
Ministry of Laws and Human Rights improved
85
95
Percentage of graduates in imigration science and techniques
Percentage of Province, District/City mapped and their regional
regulations published in accurate and up-to-date manner. Regional
Regulation Information System according to the plan and facilitation
request.
Percentage of Requests of bill harmonization at central level in Political,
Law and Security Affairs accomplished
95
80
Percentage of correntional participants and clients integrated and
classified in timely and accountable manner
Percentage of detainees, convicts and correctional participants receiving
health maintenance according to the standads
Percentage of visit visa, visit visa on arrival, visa for limited residency
and visa for certain countries in compliance with the standard and based
on accurate data
Percentage of normal passport issuance in compliance with the standard
and based on accurate data
77%
Performance of officials within the Ministry of Laws and Human Rights
increased
- Quality of laws and regulations and judicial review enhanced
80
- Quality of correctional system management improved
40%
80%
80%
- Satisfaction of people on imigration service and supervision and legal
certainty increased
Central Government Expenditure
Financial Note and Budget 2013
-
Target
2013
Chapter 4
4-112
No
11
Program*)
Performance Indicator*)
015 The Ministry of Finance (Rp18.234,4 billion), including:
1 Tax Revenue Improvement and Safeguard
- Percentage of proposals and revisions of PP and PMK in Taxation
Program
Regulation I settled
- Percentage of tax receivables paids
2 Customs and Excise Revenue Supervision,
- Percentage of regulation formulation in customs facility sector
Service and Collection Program
accomplished
3 State Treasury Management Program
-
4 State Asset, Receivable Settlement and
Auction Service Management Program
-
Average percentage of realization of the promosed customs facility
services
LKPP and Draft Law on PP APBN accomplished timely
Remuneration for the deposit, placement and short terms investment
(Idle Cash KUN)
State assets utilized
-
The recovery coming from APBN expenditure
Target
2013
100%
30%
100%
Outcome
Optimum state tax revenue
Customs and excise administrators of DG Customs and Excise capable of
providing facilitation to industries, trades and community and optimizing
revenue
85%
3
Rp4,0 trillion
State treasury management in professional, transparent and accountable
manner according to the laws
Rp103 T
Rp350 billion
State asset management, state receivable settlement and auction services
in professional, orderly, timely and optimum manner capable of
developing good image to stakeholder
5 Education and Training Program for Officials within the Ministry of Finance
6 Fiscal Policy Formulation Program
-
Percentage of STAN Diploma Program granduates with minimum
Satisfactory predicate
Exchange rate projection deviation
Percentage of fiscal risk budget reserve used
87,5%
The development of integrated and highly competent human resources
5%
90
Sustainable fiscal policy with measurable fiscal risk for stabilization and
economic growth promotion
7 Fiscal Balance Improvement Program
between Central Government and Regional
Governments
-
Percentage of transfer to region timely distthousandted
100%
-
90%
100%
100%
-
Percentage of Perda PDRD consistent with laws and regulations
Timely and efficient Central Government Expenditure allocation
Draft NK and RAPBN and RUU APBN (APBN-P prepared in accurate and
timely manner
Percentage of proved investigations
-
Number of Policy Recommendations from supervision
Percentage of timely financial and BMN reconciliation
30
100%
Percentage of integrated debt database development
100%
8 State Budget Management Program
9 Accountability Supervision and
Improvement Program for Officials of the
Ministry of Finance
10 Debt Management and Financing Program
90
Central Government Expenditure
Financial Note and Budget 2013
No
Effectiveness and efficiency of financial relation management between
the Central Government and Regional Governments enhanced
Budgeting function according to the laws and regulation and Government
Policy implemented
Supervision generating added value with effectiveness approach to risk
management, controlling and administration process and improved
accountability of officials within the Ministry of Finance
Government Bond (SBM) and loan management optimized to secure
APBN financing
Chapter 4
4-113
12
Program*)
Performance Indicator*)
018 The Ministry of Agriculture (Rp17.819,5 billion), including:
1 Food crop production, productivity and
- Direct Aids of Superior Seeds (BLBU) for SLPTT and Non SLPTT areas
quality Improvement program to reach
(BLBU Padi)
sustainable food self-sufficiency and self- Number of Post-Harves Facility Aids
resilience
2 Agriculture facility and infrastructure
provision and development program
-
Number (ha) of land optimized, conversed, rehabilitated and reclaimed
Quanity of subsidized fertilizer (million tons)
3 Beef self-sufficiency program to safeguard
the provision of safe, healthy, wholesome
and halal (religiously legal) beefs
350.000
11,08
Agriculture facility and infrastructure provision and development with
land expansion and management; irrigation water management;
agriculture financing facilitation, fertilizer and pesticide facilitation; and
agriculture equipment and machines facilitation
More livestock breedings
3,1 million heads
Improved animal food supplies (meat, eggs, milk)
Controlling, prevention and eradication of Contagious Zoonosis Animal
Disease, Viral, bacteria, parasites and reproduction problems (dose)
8.976.802,4 doses
Improved contribution of domestic livestock in animal food provision
(meat and eggs) from domestic sources
Number of new superior varieties of food crops
Number of superior variety/clones of plantation trees
Export commodity development: coffee
National sugar cane self-sufficiency: sugar cane
-
Indonesia's National Standard (SNI) prepared
Agriculture Based Industry Cluster Development ,
Oleochemical in industrial estates
Facilitated sugar factories (PG)
Standardization in Electronics and Telematics
13
10
1331
Technology innovation and dissemination in agriculture
Sustainable plantation trees production, productivity and quality
692
2
Manufacture based industry recovered and developed
31
3
- Agro industry performance improved
25
45
- Agro industries spread beyond Java island
- Industrial added value realized based on high technology
-
Improved competency of Human Resources in Electronics and
Telematics Industries
340
4 Small Medium Industry Revitalization and
Development Program
-
Number of locations developed with cluster approach
Number of IKM following machine/equipment restructuring
5 International Industrial Cooperation
Program
-
Industrial resilience information system development
1
-
Number of investment promotion, industrial products and services
3
14
30
- Innovation and industrial technology proficiency
- Professional and pro-business organization developed
- Access to raw material sources and financing sources for IKM improved
- Technology capacity and HR, the introduction of standardization and HKI,
access to domestic and international markets, institutional cooperation
and business climate for IKM improved
- Access to market, investment sources and technology and international
cooperation improved, national industry interests to access industrial
resources in efficient manner facilitated, national industrial resilience
improved and protected
- National industrial interests to access industrial resources in efficient
manner (5M) fasilitated
Central Government Expenditure
Financial Note and Budget 2013
3 Hightech based Industry Development
Program
703 units
The expansion of proper food crop farming introduction supported with
sound post-harvest management system and seed provision and efficient
production safeguarding to achieve adequate and sustainable food crop
production
-
019 The Ministry of Industries (Rp3.269,9 billion), including:
1 Manufacturing Industry Based Revitalization - Textile and Micellaneous Industrial Cluster growing and developing
and Growth Program
2 Agro industry Revitalization and Growth
Program
112.625 ton
Outcome
-
4 Technology and competitive superior variety development program
5 Sustainable plantation production,
productivity and quality improvement
program
13
Target
2013
Chapter 4
4-114
No
14
Program*)
020 The Ministry of Energy and Mineral Resources (Rp18.803,9 billion), including:
1 Electricity Management Program
- Capacity of generators, length of transmission networks, capacity of
substation, length of distthousandtion and capacity of distthousandtion
stations
- Customers of low-cost and saving electricity program customers
2 New renewable energy management and
energy conservation Program
3 Geological Research, Mitigation and Service
Program
4 Oil and Gas Management and Supply
Program
5 Piped Fuel and Gas Supply and
Distthousandtion Management and
Supervision Program
15
Performance Indicator*)
-
Investment and bioenergy development
-
Increased utilization of prospective resources regions
-
Gas supply for industries, transportation and power generation
-
Oil and gas and coalbed methane (CBM) production
-
Special rights granted for transmission route and gas distribution
network
-
Percentage of fuel distribution supervision system
022 The Ministry of Transportation (Rp36.679,2 billion), including:
1 Transportation Sector Human Resources
- Participants and graduates of Pioneer Degree Education for
Development Program
Transporation Officials per year
Participants and certified graduate of HR Training for Transportation
Officials per year
2 Land Transportation Management and
- Packages of urban transport master plan, urban traffic information
Operation Program
master plan, evaluation reports, ATCS, urban transportation safety
facilities
- Traffic safety facilities
3 Railways transportation management and
- Units of procured locomotive, KRDI, KRDE, KRL, railbus, trams
- Km of new railways tracks including double tracks
operation program
4 Sea transportation management and
operation program program
188; 3625; 4740;
9319,76; 213,46
Outcome
Electrical energy consumption in reliable, safe and environmentally
friendly manner
16204
12
5
4.000.000
42 and 74
70
New renewable energy management program and energy conservation
realized
the status of database, geological resources, geology based spatial
planning and geological disaster mitigation improved
Oil and gas production sustainability improved, including the national
capacity, fuel supply reliability and efficiency and industrial raw
materials, infrastructure reliability and lower occupational accidents and
environmental impacts of oil and gas activities
oil 910-940 MBOPD,
gas
1320‐1390MBOEPD
and CBM
61.34MBOEPD
3
- Fuel supplied and distributed throughout NKRI
30% from NKRI
164
5.292
3
32
84
383,37
4-115
-
Pioneer port locations developed/improved/rehabilitated
20
-
More Indonesian ship fleets reliable to support navigation operation
182
-
Pioneer routes served
132
-
Airports developed and rehabilitated
120
- National fuel reserves allocated
Human resources with reliable, skilled, expert competency in land, sea,
air and railways transport and and highly competitive in supporting the
programs and activities of transportation sector
Land transportation service performance improved
Railways transportation service performance improved
Sea transportation service performance improved
- Air transportation service performance, which are timely scheduled,
integrated, safe and comfortable,
- Efficiency of passenger and cargo movements and to minimize interregion air transport service and to boost national economy enhanced
Chapter 4
5 Air transportation management and
operation program
Target
2013
Central Government Expenditure
Financial Note and Budget 2013
No
16
Program*)
Performance Indicator*)
023The Ministry of Education and Culture (Rp73.087,5 billion), including:
1 Research and development program within - Percentage of effectiveness in curriculum/sylabus development and
the Ministry of Education and Culture
application through monitoring, evaluation and controlling
2 Basic education program
-
3 Secondary education program
4 Tertiary education program
-
Education evaluation analysis and national and international surveys
22
The percentage of districts/cities having minimum one extraordinary
elementary school
Jumlah students SD/SDLB penerima subsidi students miskin
82,4%
-
Working units collecting community funds
98
Percentage of Certified SD/SDLB teachers
57,5%
Percentage of Certified SMP/SMPLB
60,0%
4 Pharmateutical and health equipment
program
-
100%
90%
5
91
Puskusmas delivering basic health services to poor people
Districts/cities of 33 provinces capable of planning their SDMK needs
9.323
70
3.672
100%
-
Health operators maximized either domestic and abroad
Percentage of malnourished under five babies receiving medical
treatment
Percentage (5) of pregnant mothers helped by skilled health operators
-
Percentage (%) of medicine and vaccine supplies
95%
-
Percentage (5) of health equipment products and PKRT in
distthousandtion complying with safety, quality and efficacy
requirements
Percentage (%) of 0-11 month infants receiving complete basic
immunization
Percentage of zoonosa cases found, handled according to the standard
90%
-
5 Disease control and sanitation improvement program
-
Outcome
Learning model, data and information and PAUD quality standards, basic
education, middle education and higher education and adult education
and their accreditation available
Coverage and distribution of access to quality TK/TKLB, SD/SDLB, and
SMP/SMPLB without any gender based discrimination and are relevant
to the needs of communities, all provinces, kabupaten, and cities
expanded
Coverage and distribution of access to quality SMA, SMK, SMLB without
any gender based discrimination and relevant to the needs of
communities in all provinces, districts and cities
Coverage and distribution of access to quality and internationally
competitive higher education without any gender based discrimination
and relevant to the needs of nation and state
Professionalism of teachers and pedagogical staff enhanced and
education quality assured according to national education standards
(SPN)
Basic, referential, traditional, alternative, complementary health
initiatives, occupational, sport and matra health improved including the
standardization, accreditation and quality of health services
Health human resources supply and quality enhanced according to the
specified health service standards
Supply and affordability of quality health services for all citizens
improved
89%
88%
85%
Supply of pharmautical and health equipment complying with the
standards and affordable by the people improved
Lower prevalence rate, mortality rate and disability rate as a result of
diseases
Central Government Expenditure
Financial Note and Budget 2013
3 Nutrition and mother and children health
development program
9.774.160
-
024 The Ministry of Health (Rp34.582,0 billion), including:
1 Health development program
- Puskesmas turned into patient-care puskesmas in inhabited border areas
and outer small islands
2 Human resources development and
empowerment program in health sector
(PPSDMK)
78,67%
SMA/SMK students to receive quality management operation aids
(BOOM)/pioneer BOS
Secondary Students of Extraordinary Schools (SMLB) receiving genderresponsive schollarship facilities
New universities established
5 Profession development program for
teachers and pedagogical staff and education
quality supervisors
17
Target
2013
Chapter 4
4-116
No
18
Program*)
Performance Indicator*)
025 The Ministry of Religions (Rp43.960,5 billion), including:
1 Hajj and umrah pilgrimage development and - Rehabilitation of hajj accommodation facilities/ Information and Public
management Program
Relation Center (PIH) at embarkation
- Information and Public Relation Center officials (PPIH) in Saudi Arabia
15 location
Outcome
The quality of hajj and umrah pilgrimate services and its information
system enhanced
1534 persons
2 Islamic education program
-
MI students receiving BOS
3.278.762 students - Access, quality and competitiveness of Islamic education improved
3 Christian society development program
-
4 Catholic society development program
-
5 Hindu society development program
-
6 Buddha society development program
-
MTs students receiving BOS
University students of low-income households receiving scholarship
facility
Certified Christian Teachers
University students of low-income households receiving scholarship
facility
Worship Place Assistance for Catholic Believers
University students of low-income households receiving scholarship
facility
Education staff compentent in their fields
University students of low-income households receiving scholarship
facility
Religion and Religiosity education development and promotion
(operational aids)
2.726.733 students - Secondary equalization, expansion and quality improvement
1.000
Quality of social counseling for Christian communities and Christian
education enhanced
1.000
2.000
Quality of social counseling for Catholic communities and Catholic
education enhanced
215 pieces
2.500
Quality of social counseling for Hindu communities and Hindu education
enhanced
900
500
Quality of social counseling for Buddha communities and Buddha
education enhanced
40 locations
-
19
Target
2013
026 The Ministry of Manpower and Transmigration (Rp4.863,1 billion), including:
1 Manpower Competence and Productivity
- Certified manpower
Improvement Program
- Indonesia’s National Competency Standards (SHHsNI) established and
competency based training programs prepared
2 Manpower Placement and Expansion
Program
-
-
3 Industrial Relation and Manpower Social
Insurance Improvement Program
-
4 Manpower Protection and Supervision
System Development Program
-
(a) Unemployment receiving temporary jobs; (b) districts/cities
introducing temporary unemployment reduction program
Workers under Employment Contracts (DHK) and registered as
participants of Jamsostek
Remuneration policy harmony developed (KHL and remuneration
setting)
Companies introducing SMK3 (Occupational Health and Safety
Management Standard)
(a) Child workers withdrawn from their workplace; (b) child
workers returned to education world and/or undertaking skill
training
4-117
-
Areas in underdeveloped regions/border areas where facilities and
infrastructure to be built
-
Lands provided in underdeveloped regions/border areas
Workers competitiveness and productivity enhanced
50 SHHsNI and 234
program
80rb
persons/33Prov
Employment placement and expansion with worker placement service
facilitation enhanced
84rb persons/414
Kab/Kota
350 thousand
persons
socialization and
consolidation with
Reg. Gov.
naik 10%
Industrial Relationship Development and Worker Sociel Insurance
established in Employment Requirements, Prosperity and Discrimination
Analysis, Remuneration System, Industrial Relationship Dispute
Settlement improved
The introduction of manpower laws in work place intensified
11 thousand
childred, 100%
36 ares
(7.849 Units &
228 Km)
25 areas
(80.000 Ha)
Liveable dwelling places and decent business place within the
transmigration site provided
Chapter 4
5 Transmigrant Site Development Program
Worker Placement through AKAD (Interprofessional and Inter
Region)/AKL (Local Interprofessional, and manpower institutions
15000 workers
Central Government Expenditure
Financial Note and Budget 2013
No
20
Program*)
Performance Indicator*)
027 The Ministry of Social Affairs (Rp5.605,6 billion), including:
1. Social Empowerment and Poverty Alleviation - Households having access to business through Joint Economic Business
Program
Groups (KUBE)
- Poor households receiving empowerment assistance
2.
Social Rehabilitation Program
-
3.
Social Protection and Insurance Program
-
21
4.
Social Prosperity Education, Training,
Research and Development Program
5.
Accountability Supervision and
Improvement Program for officials of the
Ministry of Social Affairs
-
Abandoned childred and under five babies, street children, disabled
children, children under legal prosecution, and childred requiring special
protection, who are served, protected and rehabiliated either in or out of
orphanage
The disabled persons who are served, protected and rehabilitated either
in or out the rehabilitation center
Victims of natural disasters receiving assistance in KSB (Disaster Alert
Kampong)
Very poor households (RTSM) receiving conditional cash aids of
Prosperous Family Program (PKH)
Trained and certified community human resources in social welfare
Target
2013
8.931HHs
32.060HHs
169.461persons
140.913persons
2.050 persons
Certified social and social welfare operators
Verified DIPA Deconcentration, Co-Administration (TP) fund and central
office within DG Social Empowerment and Poverty Alleviation
400 persons
46
-
Social empowerment and poverty alleviation
planning/programming/budgeting documents prepared
2 documents
3 provinces
-
3.
Community based watershed function and
supporting capacity improvement program
4.
Forestry Research and Development
Program
-
5.
Accountability Supervision and
Improvement Program for Officials of the
Ministry of Forestry
-
Rehabilitation plants for critical lands, mangrove forests, peat soil,
swamps, and coastal lines in priority whatershed (DAS) extending
Integrated DAS management plan in 108 units of priority DAS
Basic and applied science and technology produced in forestry
engineering and forest product processing of 5 titles
Basic and applied science and technology applied by the users in forest
productivity of 6 titles
Violation to laws and regulations within inspectorate work areas to
reduce by 50% from 2009
Potential loss to reduce until 25% from 2006 - 2009
Social functions of PMKS (socially troubled residents) being the
benerifiaries improved with social services, protection and insurance
19.000 km
The number of competent social workers, and social agents and sosial
prosperity improvement motivators increased
Irregularities in program and activity implementation decreased
Forest area allocation to assure optimum forestry resources management
secured
Biodiversity and ecosystem playing significant roles as buffer zone for
ecological resilienace and real sector driving force and leverage for the
dignity of nation in global world
59,2%
399thousand ha
Critical lands as priority watershed (DAS) decreased
11 DAS
80%
80%
40%
20%
Minimum 60% of forestry research and development can be used in
policy making, technical forestry development and science enrichment
including policy and technical development in climate change related
issues
Accountability supervision and improvement to the officials of the
Ministry of Forestry and bureaucracy reform and good governance in the
ministry realized
Central Government Expenditure
Financial Note and Budget 2013
3 provinces
2.
Forest area squatter management in 12 priority provinces (North
Sumatra, Riau, Jambi, South Sumatra, West Sumatra, Lampung, East
Kalimantan, Central Kalimantan, South Kalimantan, South East Sulawesi
Hotspots in Kalimatan island, Sumatra island, and Sulawesi island to
reduce 20 percent (%) every year on the average from 2005 – 2009
Social functions of PMKS (socially troubled residents) being the
beneficiaries improved with social service, protection and rehabilitation
2,4 million RTSM
-
-
Social function of socially troubled residents (PMKS) being the
beneficiaries of basic need empowerment and fulfillment program
improved
49.749persons
029 The Ministry of Forestry (Rp6.717,5 billion), including:
1. Macro Planning and Forest Area
- Forest borders of 63,000 km secured consisting of outer boundaries and
Strengthening Program
functional boundaries of forest areas
- Data and information on the use of forest areas in 33 province
Biodiveristy Conservation and Forest
Protection Program
Outcome
Chapter 4
4-118
No
22
Program*)
Performance Indicator*)
032 The Ministry of Marine and Fishery (Rp7.077,4 billion), including:
1. Fishery and Marine Science and Technology - Technology package/innovation, engineering design/design/information
Research and Development Program
and data of applied science and technology on marine and fishery
2.
3.
Capture Fishery Development and
Management Program
Aquaculture Fishery Production
Improvement Program
Fishery Product Competitiveness
Improvement Program
Technology package/innovation, HKI proposals/rewards, data and
information for aquaculture finshery production and productivity
13 packages
-
Fish port developed, including potential ports beyond the borders
816 ports
-
Territorial water and islands which their fishery resources soundly
managed (WPP = Fishery Management Region)
-
Aquaculture production centers controlled and rehabilitated in terms of
their waters
Acquaculture fishery regions having adequate facilities and
infrastructure
71 centers
Promotion and cooperation development and expansion for domestic
fishery products
Large Scale Fish Processing Unit (UPI) developed and expanded to meet
fishery product standard quality
33 provinces
-
5.
Marine, Coastal and Small Island Resources
Management Program
-
23
Islands facilitated for their infrastructure provisions including outer
small islands
Groups being the beneficiaries of traditional salt processing and salt
production volumes (PKN = Fishermen Welfare Augmentation)
033 The Ministry of Public Works (Rp77.978,0 billion), including:
1 Construction development program
- The development of regional construction service providers
- The development of business management
2 Settlement infrastructure improvement and - Rural area infrastructure
development program
- Villages served with water supply infrastructure
-
Toll road developed
4 Spatial planning program
-
Road links received routine maintenance
Spatial planning that has been synchronized with local development plan
Inter-province coordination of 7 islands and other small islands
4-119
-
Irrigation network service coverage developed/improved
Swamp network service coverage developed/improved
Outcome
The output of science and technology research and innovations in marine
and fishery sector utilized
Productivity of capture fishery and fishermen prosperity augmented
11 locations
Aquaculture fishery production increased
449 areas
219 UPI (40
Baru; 179
Lanmillionn)
60 island
Primary fishery products highly competitive in domestic and
international markets improved
Marine, coastal and small island management and the exploration of their
resources managed in sustainable manner for the prosperity of people
800; 700
million ton
33
15
185 regions
1610 villages
19 km
33.926 km
17 provinces
7 island
111.729 ha
46.061 ha
Capacity and performance of central and regional construction service
providers enhanced
Number of cities introducting the norms, standards, procedure and
criteria of settlement area development according to the specified spatial
planning and the number of areas served with settlement infrastructure
increased
- Facilitation for regional links improvement toward 60% in sound
conditions
- Road structure increased/widened
Consistency of development plan with regional spatial planning,
consistency of infrastructure development program and national spatial
planning
Water resources management performance improved
Chapter 4
3 Road operation program
5 Water resources development program
6 packages
-
4.
Target
2013
Central Government Expenditure
Financial Note and Budget 2013
No
24
Program*)
034 Coordinating Ministry for Politics, Laws and Security (Rp518,2 billion), including:
1. Politics, Laws and Security Coordination
- Coordination meeting held for legal material synchronization and
Improvement Program
harmonization
2.
3.
4.
25
Sea Security and Safety Improvement
Program
Facility and Infrastructure Improvement
Program for Officials in the Coordinating
Ministry of Politics, Laws and Security
Support Program for the Management and
Implementation of other Technical Tasks of
Coordinating Ministry of Politics, Laws and
Security
12
-
Coordination meeting held for international policy and laws
-
Intelligence operations (domestic & foreign) for sea security operation
9
-
Joint sea security operation in Indonesian water jurisdiction
9
-
Development and building construction packages
-
Percentage (%) of Timely General Administration Management
90%
-
Percentage (%) of Accountable and Timely Work Plan Implementation
Supervision
90%
035 The Coordinating Ministry for Economy (Rp281,1 billion), including:
1. Economic Policy Coordination Program
- Percentage of recommendations from reponsive macroeconomic policy
coordination and synchronization
-
Percentage of recommendations for the implemented Regional Economy
Potential Development Policy Coordination and Synchronization
2.
Facility and Infrastructure Improvement
Program
-
Percentage (%) of quality facility and infrastructure provided for all
personnel
3.
Support Program for the Management and
Implementation of Other Technical Tasks of
the Coordinating Ministry of Economy
-
Percentage of quality planning management documents
036 The Coordinating Ministry for People's Welfare(Rp298,9 billion), including:
1 People's Welfare Policy Coordination
- Regional Poverty Alleviation Coordination Team (TKPKD) to perform
Program
community empowerment based poverty alleviation program integration
-
2 Support Program for the Management and
Implementation of other Technical Tasks of
the Coordinating Ministry for People's
Target
2013
-
-
Outcome
Effectiveness in Domestic Political Policy Formulation and
Implementation enhanced
12
12
80%
Institutional capacity building, security facilities and infrastructure,
formulation of sea safeguarding policies, integrated sea safeguard
operation and law enforcement in Indonesian water jurisdiction
intensified
Adequate facilities and infrastructure for the officials
Administrative support and operational activities of the Coordinating
Ministry of Politics, Laws and Security increased
Effectiveness in macroeconomic and financial policies coordination
enhanced
85%
100%
Personnel productivity increased
95%
Performance and competency based organizational culture and sound
organizational management improved
15
- Coordination in developing and harmonizing people prosperity policies
in attempt to reduce poverty and unemployment rates and as quick
respond for public prosperity problems so as to augment the welfare of
people intensified
Percentage of Social Insurance Provider Body (BPJS) for Health, BPJS for
75%
Manpower and Roadmap of Universal Coverage for Health Insurance (UC
JK)
BPK’s opinion to financial statements
Unqualified Opinion - All supporting activities for coordination activities in people werlfare
(WTP)
affairs implemented
Percentage (%) of BKP and BPKP findings followed up
25
Central Government Expenditure
Financial Note and Budget 2013
26
Performance Indicator*)
Chapter 4
4-120
No
27
Program
*)
Performance Indicator*)
040 The Ministry of Tourism and Creative Economy (Rp2.053,0 billion), including:
1 Tourism Destination Promotion Program
- Regions facilitated/supported to be national tourism destination
2 Tourism Marketing Development Program
3 Tourism Resources and Creative Economic
Development Program
10
- Investments in tourism sector promoted
Foreign markder information development
16
-
Participation in international tourism markets
Human Resouces participating in tourism and creative economic
coaching
Policy notes in creative economy prepared
52
1.190
- Tourism promotion both in domestic and abroad intensified in terms of
quality and quantity
- Total foreign and domestic tourists increased
- Human resources capacity and professionalism in tourism and creative
economic sector developed
- Policy research and developmnet in creative economic sectors intensified
Actors in art-culture based creative economic sectors (EKSB) to improve
their creativity and productivity capacities in entertainment and musical
art sectors
Actors of EKSB to improve their creativity and production capacities in
quality films
Actors of media, design and science and technology based creative
economic sectors (EKMDI) to improve their creativity and production
capacities in producing media based creative works
1.610
-
-
Creative enterpreneurs receiving supports
041 The Ministry of State Owned Enterprises (Rp143,6 billion), including:
1 SOEs Development Program
- Good corporate (CGC) scores for SOEs
- Maximixing and synergizing SOEs assets approved
2 Support Program for the Management and
Implementation of Other Technical Tasks of -
29
- Variety of tourism destination increased
Destination design facilitation for tourism investment
28
10
-
5 Media, Design and Science and Technology
Based Creative Economic Development
Program
Outcome
-
4 Art and Culture based Creative Economic
Development Program
Target
2013
SOE Satisfaction Index
Government Performance Accountability System Score (SAKIP)
- Economic contribution of art and culture based economic sector
increased
875
500
Economic contribution of media, design and science and technology
based creative economic sectors increased
19
Good
30
78
60
- SOEs contribution to national economy improved
- Transparency, accountability and independency of SOE management
improved
- SOEs' satisfaction to the policies of SOEs Ministry increased
- Goor corporate government principles introduced
300
10
- Science and technology resources increased
- Science and tehnology application to enhance economic competitiveness,
people welfare and self-reliance of nation intensified
70
- Management support for the implementation of tasks aiming to improve
organizational performence provided
80
Chapter 4
4-121
042 The Ministry of Research and Technology (Rp653,0 billion), including:
1 Science and Technology Proficiency
- Incentive package for national innovation system (Sinas)
- Science and technology intermediation to support Indonesia Science
Improvement and National Innovation
Technology Park (I-STP) on Sciece and Technology Application for small
Strengthening Program
and medium industries
2 Support Program for the Management and
- Percentage (%) of service quality improvement in legal, human resources
Implementation of Other Technical Tasks of
and protocol, data and information, licensing for foreigh researches
the Ministry of Research and Technology
- Percentage (%) of recommendations from evaluation results
implemented
26
Central Government Expenditure
Financial Note and Budget 2013
No
30
Program
*)
Performance Indicator*)
043 The Ministry of Environment (Rp921,5 billion), including:
1 Natural Resources and Environmental
- Locations for Hazardous Waste (B3) management supervision in ports
Management Program
and the recovery of polluted environmental media
- Districts participating in Toward Greed Indonesia Program (MIH)
2 Support Program for the Management and
Implementation of Other Technical Tasks of
the Ministry of Environment
31
Outcome
46
- Environmental pollution decreased
399
- Natural resources and environmental management capacity increased
Monitoring and evaluation reports of programs and activities
2
Evaluation report of Working Units’ Government Institution Performence
Accountability Report (LAKIP)
1
- Financial management of the ministry to get unqualified opinion (WTP)
from the auditor
- Bureaucracy reform implementation accelerated
044 The Ministry of Cooperative and Small and Medium Enterprises (Rp1.810,7 billion), including:
1 Cooperative and SME Empowerment
- Facilitation for funding scheme for micro and small enterprises
Program
-
Target
2013
Provinces providing financing supports for KUMKM in APBD
1 scheme
- The institutional quality of KUMKM and understanding of coopratives
among officials and communities concerning a) the humber of quality
cooperatives; b) the number of participants in cooperative advocacy; c)
the number of participants of technical guidance improved
7 provinces
- Revitalization/development of traditional market facilities and
infrastructure facilitated, KUMKM gathering to promote their products
and sidewalk vendors (PKL) management
Chapter 4
4-122
No
Information System to enhance the quality of information services to
public with regard to Cooperative and SME empowerment
Human Resources with self-stimulation capability to be more innovative
and creative by introducing various approaches in problem solving
3 systems
19 activities
3 Facility and Infrastructure Improvement
Program for the Ministry of Cooperative and
SME
Data and communication management equipment maintenance and
procurement
Office supply improvement within the Ministry of Cooperative and SME
12 months
4 activities
- Quality and coordination of program/activity planning of the Ministry of
Cooperatives and SME enhanced
- Quality of Evaluation and reports and data and information services on
KUKM enhanced
- Quality of budget implementation and state asset management (BMN)
enhanced
- Bureucracy restructuring, effective, efficient and accountable governance
intensified
- Quality of central and regional budget audit and supervision enhanced
- Quality of facilities and infrastructure for officials of the Ministry of
Cooperatives and SME enhanced
Central Government Expenditure
Financial Note and Budget 2013
2 Support Program for the Management and
Implementation of Other Technical Tasks of
the Ministry of Cooperative and SME
32
Program
*)
Performance Indicator*)
047 The Ministry of Women Empowerment and Child Protection (PP&PA) (Rp234,7 billion), including:
1 Gender Mainstreaming and Women
- Manuals for wowen protection from violence
Empowerment Program
- Ministries/Agencies (K/L) and Regional Government facilitated in
improving their gender data processing capacity
2 Child Protection Program
-
3 Support Program for the Management and
Implementation of Other Technical Tasks of
the Ministry of PP&PA
Target
2013
1 manuals
5 K/L and 12
provinces
-
Manuals for education right fulfillment for the children
Ministries/Agencies (K/L) and Regional Governments facilitated in
protecting childred from social problems
Gender and child based planning policies
1 manuals
5 K/L and 7
provinces
3 activities
-
Child protection supervision in provinces
16 provinces
Outcome
- Gender Mainstraiming Policies in economic sector increased
- Gender Mainstreaming Policies in social, political and legal affairs
increased
- Women Protection Policies against violences increased
- Child Protection policies increased
- Child development policies increased
- Human resources and budgeting documents, plans, development and
evaluation reports on KPP and PA prepared timely, monitored and
evaluated according to the latest data and in integrated and harmonious
manner
Central Government Expenditure
Financial Note and Budget 2013
No
- Gender and child development performance evaluation reports based on
the lastest data accomplished in timely and harmoniously manner
- Facility and infrastructure, financial support and HR development
according to the needs provided in accountable manner
33
048 The Ministry of State Apparatus Empowerment and Bureaucracy Reform (PAN and RB) ( Rp201,3 billion), including:
1 State Apparatus Empowerment and
- Regulations/policies in Government Administration Supervision
Bureaucracy Reform Program
- Percentage of Government agencies performing and reporting Inpres of
Corruption Eradication Acceleration, which is evaluated according to the
2 Support Program for the Management and
Implementation of Other Technical Tasks of
the Ministry of PAN and RB
Percentage of cultural campaigns in printed and electronic media
-
Government agencies as Pilot Project for Work Culture Improvement
-
Ratio of facility and infrastructure in compliance with the needs of
personnel and Service Quality Standard
77 agencies
70%
- Proportional, effective and efficient government organizations
established
- Professional, highly performed, accountable and prosperious human
resources established
- Effective, efficient and accountable governance realized
- Accountable and highly performed government agency
- Quality of public services enhanced
- Integrated, efficient and effective government supervision realized
- Well-planned, systematic and comprehensive national bureaucracy
reform realized
Internal management performance for the implementation of tasks of the
ministry increased
8 agencies
100%
Quality of internal facility and infrastructure for the implementation of
tasks of the ministry enhanced
Chapter 4
4-123
3 Facility and Infrastructure Improvement
Program for Officials of the Ministry of PAN
and RB
-
1 RUU
34
35
Program
*)
050 State Intelligence Agency (BIN) (Rp1.551,4 billion), including:
1 State Security Investigation, Safeguard and
- Percentage of counter Intelligence monitoring
Mobilization Program
- Percentage of Foreign Intelligence Operation adequacy
2 Support Program for the Management and
- Support adequacy
Implementation of Other Technical Tasks of - Budget allocation
State Intelligence
3 Accountability Supervision and
- Supervision findings to decrease
Improvement Program for the Official of
State Intelligence Agency
051 National Cryptogram Agency(Rp.593,5 billion) including:
1 National cryptogram development program - Signal analysis services
2 support program for the management and
implementation of other technical tasks of
the National Cryptogram Agency
36
Performance Indicator*)
12 services
23 documents
40 students
-
110 reviews
Infomation technology system implemented and complete and data
presentation
Sound personnel administration and development
85%
Complete and up-to-date references to give supports for review activities
and reproduction of review results
90%
Accountability supervision to the officials of BPS Region II according to
SOP
Percentage of Working Units performing bureaucracy reform
socialization
Percentage of Tertiary Statistical Science Education Services
Output of various tasks
90%
100%
- Cryptogram carried out consistent with national policies
- Support to classified communication
- Self-reliant cryptogram technology
Office administrative service of National Cryptogram Agency in
accountable manner
Materials for decision making to set National Security Development
Policy focusing on defense and security and crisis prevention and
resolution available
Well-advanced management and adequate operational support for
National Resilience Council
Complete, accurate and timely statistic data and information provision
increased
100%
100%
The quality of accountability in financial and material administration
management enhanced
100%
85%
100%
1500 units
Good governance and clean governance realized
Facilities and infrastructure to support the performance of technical
activities complied with
Central Government Expenditure
Financial Note and Budget 2013
-
4 Facility and Infrastructure Improvement
Program for Officials of BPS
More technical and administrative support to the national Intelligence
Supervisory activity audit documents
Students graduating per year
054 Central Bureau of Statistics (BPS) (Rp3.741,7 billion), including:
1 Statistic Information Supply and Service
- Percentage of 2013 Agriculture Census according to Standard Operating
Program
Procedure (SOP)
- Percentage of National Balance Sheet Statistics (GDP) and Regional
Balance Sheet Statistics (GRDP) by expenditures
2 Accountability Supervision and
- Accountability supervision to the officials of BPS Region I according to
Improvement Program for Officials of BPS
SOP
3 Support Program for the Management and
Implementation of Other Technical Tasks of
31%
-
-
Improved investigation for national security and safeguarding
Better technical and administrative service support to national
Intelligence
1 policy
-
Outcome
31%
Encryption material policies/manuals
-
37
0,32
30%
31%
-
052 The National Security Agency (Rp38,9 billion) including:
1 National Security Policy Development
- Cyclic reviews, dynamic reviews and kirpat reviews focussing on crisis
Program
prevention and resolution
2 Support Program for the Management and
Implementation of Other Technical Task of
Target
2013
Chapter 4
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No
38
Program*)
Performance Indicator*)
055 The Ministry of National Development Planning/BAPPENAS (Rp1.055,1 billion), including:
1 National Development Planning Program
- Law and regulation development policies prepared
2 Accountability Supervision and
Improvement Program for Officials of
Bappenas
-
Percentage of suitability of policies on development plants of regions to
National Development Planning System Law increased
-
Effective internal control system available and applied
3 Facility and Infrastructure Improvement
Program for Bappenas
4 Suppport Program for the Management and Implementation of Other Technical Tasks for
Bappenas
39
Target
2013
-
- Quality of National Development Plan Design on Human Resources and
Culture enhanced
- Quality of National Development Plan Design on Regional Development
and Regional Autonomy enhanced
- Quality of National Development Performance Evaluation enhanced
Quality of Internal Government Control System (SPIP) in the Ministry of
PPN/Bappenas enhanced
Level of Satisfaction to Consultation Services
Percentage of facility and infrastructure provided to the officials of the
Ministry of PPN/Bappenas
Percentage the suitability of Education and Training Review Results and
Functional Position Planning (JFP) used in formulating Education and
Training and JFP policies
Planning, institutional and administration documents
056 National Land Agency (Rp4.390,2 billion), including:
1 National Land Management Program
- Land dispute management (cases)
Inventory of Coastal Areas, Small Islands, Border Areas and Certain
Regions (WP3WT) (National Priority 10)
Outcome
Facilities and infrastructure for officials in the Ministry of PPN/Bappenas
improved
The implementation of institutional management tasks to support the
main tasks and functions of the Ministry of PPN/Bappenas intensified
80%
1 package
Central Government Expenditure
Financial Note and Budget 2013
No
- A condition capable of stimulating, dynamizing and facilitating land
infrastructure development at national, regional and sector level
established
- Land asset legalization, sound land administration and complete
information for land asset legality realized
- Land management and arrangement and land titling and optimum land
use improved
- Land occupation, ownership, use and exploration control and community
empowerment in access improvement to economic resources realized
- Land disputes, conflics and cases reduced and the new land related
disptures, conflicts and cases prevented
2 Accountability Supervision and
Improvement program for Officials of BPN
-
Reports of performance and case verification
Land service facility and infrastructure development
Organizational and personnel development
National land data and information on National Land Information and
Management System (Simtanas) (%)
27%
44
62 working units
1
12%
Performance accountability for tasks implementation in all working units
within BPN RI
Facilities and infrastructure of BPN RI increased in terms of quality and
quantity
Quality of coordination, synchronization and integration of tasks and
functions of BPN RI and public services in land affairs enhanced
Chapter 4
4-125
3 Facility and Infrastructure Improvement
Program for BPN
4 Suppport Program for the Management and Implementation of Other Technical Tasks for
BPN
Reports of supervision intensity improvement activities in attempt to
increase public services (%)
40
Program*)
Performance Indicator*)
057 National Library (Rp.478,7 billion), including:
1 Library Development Program
- National and international publication collected and managed
2 Facility and Infrastructure Improvement
Program for National Library
3 Suppport Program for the Management and Implementation of Other Technical Tasks for National Library
41
National publication recorded in Indonesia’s National Bibliographies
(BNI) and National Master Catagoue (KIN)
National Library service facilities (units)
Outcome
Library services, physical and content preservation of old manuscripts
and reading culture in the society improved
2.500 entry
561 units
13 drafts
Libary promotion and inter-agency coordination
21 times
Quality of building and office equipment in Perpusnas (national library)
enhanced
Quality of services, management, planning and implementaion supported
with sound administration anf financial management in national libary
enhanced
1 document
- Quality of e-Government application enhanced
1 document
- e-business for SME
250 UKM
2units
3
- Public information dissemination, equalization and utilization
20
100%
- Post and informatics services available
100%
65%
- Safe national internet network
65%
90%
-
Percentage (%) of the use of radio frequency spectrum complyin with the
regulations and troubleshooting for radio frequency spectrum, satellite
orbit, post, telecommunication and broadcasting facilities
Percentage (%) of timely processed licensing processing
85%
- Optimum informatic resources management to support the realization of
internet penetration 50%, broadband services 30% and TV digital
broadcasting 35%
- Technically feasible informatic industry developed
-
Certified radio operators
-
Research and Development works in literation and profession
Eliteration of communities in border areas, isolated regions,
underdeveloped regions and conflict-torn regions
Participants of education and training on media (official)
Participants of education and training on media (self-funded)
75%
5050
6
2
- Research as reference in public policy making in communication and
informatics sector
-
204
1.448
- Percentage of certified education and training participants
Central Government Expenditure
Financial Note and Budget 2013
5 Communication and Informatics Research
and Development Program
-
81.520 entry
Regulations on library prepared
059 The Ministry of Communication and Informatics (Rp3.807,4 billion), including:
1 Informatics Application Development
- Policies and regulations on e-Government
Program
- Draft Regulation of Minister of Communication and Informatics on EGovernment master plan
- SME applying e-business application
- E-business service centers
2 Public Information and Communication
- Policies, regulations and standardization in public communication and
Development Program
information
- Complete and functional media centers in compliance with the specified
standards at provinces/districts/cities in outer regions/the
frontiers/conflict-torn regions
3 Post and Informatics Operation Program
- Percentate (%) of villages served by telecommunication access or 33,184
villages (0f total 72,800 villages throughout Indonesia)
- Percentage (%) of sub-dictrict served by internet access
- Percentage (%) of national internet network security especially for
internet service providers, internet exchange, government agencies and
critical infrastructure
- Percentage (%) of informatic and calibration equipment testing services
4 Post and Informatics Resources and
Equipment Management Program
Target
2013
Chapter 4
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42
Program
*)
060 National Police of Republic of Indonesia (Polri) (Rp45.622,0 billion), including:
1 Research and development program within - Prototypes and policy reviews
the Polri
Education and training office services
2 Public laws and security strategy
- Law and order strategy services
development program
Regional law and order services
3 Public laws and security maintenance
- Percentage of declined law and order disturbances along public activities
program
routes using sea transport mode; coastal and national/international port
securities
- Policy operations being the public priority needs
4 Criminal probe and investigation program
5 Domestic serious security threat mitigation
program
43
Performance Indicator*)
12
12
12
12
11%
12
-
Percentage (%) of terroristm case and clearance rate at national level
102%
57%
-
Percentage (5) of general criminal case and clearance rate at national
level
Domectic and Regional law and order disruption management reports
-
Domestic security disruption management reports
063 Drug and Food Supervision Body (BPOM) (Rp1.188,3 billion), including:
1 Drug and Food Supervision Program
- Percentage of MD food production facilities complyin with the latest GMP
standards (in relation to 1000 facilities checked)
2 Facility and Infrastructure Improvement
Program for BPOM
Target
2013
12
Technology based police equipment capable of dealing with various
criminal trends
Early detection of potential security disruption that may spark public
unrest
Well-maintained and improved public law and order conditions to
protect overall citizens in performing their activities for living standard
augmentation free from any and all risks, threaths and disruptions that
may cause bodily injuries
Various types of crimes coped with and decreased (conventional crimes,
transnational crimes, crimes with contingency implications and crimes
against state assets) without violating human rights
Peaceful people from any law and order disturbance, particularly the
serious criminal threats (mass riots and organized crimes)
12
60%
-
Cases in medicine and food investigation
Percentage (%) of performance supporting facilities and infrastructure
including the maintenance
540
90
-
Percentage of working unit capable of managing BMN (in relation to 40
working units)
Draft regulations and laws prepared
25
Participation of BPOM in bilateral, regional, multilateral and
international personsanization cooperation
43
3 Suppport Program for the Management and Implementation of Other Technical Tasks for
BPOM
-
Outcome
Central Government Expenditure
Financial Note and Budget 2013
No
70
- Effectiveness in drug and food supervision enhanced to protect the
people
- Facilities and infrastructure required by BPOM provided
- Coordination in planning, development and control of programs,
administration and resources within BPOM intensified according to
standard quality management system
Chapter 4
4-127
44
Program*)
Performance Indicator*)
064 National Resilience Institute (Rp235,0 billion), including:
1 National Resilience Development Program
- Number and types of revisions to curriculum and syllabus documents for
short-education program and regular education programs
2 Accountability Supervision and
Improvement program for Officials of
National Resilience Institute (Lemhanas)
- Quality of national leadership education in efficient, effective,
accountable and optimum manner enhanced
- Quality of conceptual and strategic review to various national, regional
and international issues enhanced
Total participants, schedule and type of education and key note speakers
according to education studies in Lemhanas RI
80
-
Number and types of research and strategic review documents in
economic empowerment, geography, natural resources and environment.
100
-
Number and types of research and strategic review documents in
ideology, politics, democratization, archipelago insights, national
resilience, national management system and leadership
100
-
Working units complying with laws and regulations in performing their
major tasks and functions
1
-
Working units applying reliable internal control systems
1
Tamnas magazine and review journals published
Foreigh guests protocol
-
National business empowerment communication forums implemented
-
Effective capital investment promotion facilities with the development of
representative offices for Capital Investment Coordination Body (BKPM)
in abroad or Indonesian Investment Promotion Center (IIPC)
2 Suppport Program for the Management and Implementation of Other Technical Tasks for
BKPM
-
Licensing and non-licensing applications under BKPM, One Stop
Integrated System (PTSP) Province, PTSP District/City developed in
Electronic Investment Information and Licensing Service System
(SPIPISE)
Local PTSP connected to SPIPISE
2.000
12
1
5 locations
5 locations
- Performance and financial accountability with reliable internal control
system toward good governance and clean governance within
Lemhannas RI
- Main tasks and functions of Lemhanas RI published to the public
- Lemhanas RI's protocol services to support the main tasks and functions
and activities of leaders and documentations of activities performed by
the leaders and institutions
- Quality of reviews and proposed policies, potential information and
facilitation for business development to fortify the competitiveness in
capital investment improved
- Quality of promotion oriented to fortify the competitiveness of capital
investment enhanced
Indonesian
Investment
Promotion
Center (IIPC)
in 11 countries
1 packages
- Quality of management support and implementation of other technical
masterdata
tasks of BKPM enhanced
of capital investment
50 Kab/Kota
Central Government Expenditure
Financial Note and Budget 2013
065 Capital Investment Coordination Body (BKPM) (Rp705,1 billion), including:
1 Capital Investment Competitiveness
- Formulated recommendations for capital investment procedure
Improving Program
simplification
- Training on entrepreneurship capacity improvement for Micro, Small,
Medium Enterprises and Cooperatives (UMKMK)
Outcome
80
-
3 Suppport Program for the Management and Implementation of Other Technical Tasks for Lemhannas
45
Target
2013
Chapter 4
4-128
No
46
Program
*)
Performance Indicator*)
066 National Narcotics Body (BNN) (Rp1.072,6 billion), including:
1 Illegal Drug Abuse and Distthousandtion
- Education institutions empowered in P4GN
Prevention and Eradication Program (P4GN)
2 Suppport Program for the Management and Implementation of Other Technical Tasks for
BNN
-
47
P4GN information dissemination media
Government Institution Rehabilitaion Agency (LRIP) acquiring
strengthening, stimulus or facilitation/capacity building
Community component rehabilitation institutions (LRKM) acquiring
strengthening, stimulus, or facilitation/capacity building
P4GN data and information reports prepared
P4GN research and development reports prepared
067 The Ministry of Underdeveloped Region Development (Rp2.048,8 billion), including:
1 Underdeveloped Region Development
- Percentage (%) of underdeveloped regions receiving stimulants in
Acceleration Program
promoting economic investments
- Districts in underdeveloped regions manage to increase the investments
in terms of quantity and values
- Districts preparing production center development business plans
- Underdeveloped districts receiving stimulants for production center
development
2 Suppport Program for the Management and Implementation of Other Technical Tasks for
the Ministry of PDT
-
-
Target
2013
1.093
education
institutions
913 media
210 LRIP
Outcome
- Secondary students, tertiary students and workers possessing knowhow, understanding and awareness on drug abuse and illegal narcotics
distribution increased
- Institutional rehabilitation capacity improved according to Minimum
Standard Quality (SPM)
80 LRKM
13 data reports
- Institutional, administrative information communication system and
state owned asset management system applied
3 l research reports
20%
Central Government Expenditure
Financial Note and Budget 2013
No
- Regional balance supported with sufficient investment inflows
50
10
10
- Integration of production center, growth center, SME and investment in
underdeveloped regions accelerated so as to improve regional revenue
and income per capital higher than or equal to national rate
Personnel attending structural education and training
25
Personnel attending technical education and training
Procedure system, work method, occupational analysis and management
information system development accomplished
50
10
- Professionalism and effectiveness improvement to the human resources
of the Ministry of Underdeveloped Region Development (KPDT) in
optimum manner
Percentage (%) of organizational and administration outputs from
organizational restructuring performed by KPDT
90
- Organizational and administrative development policies within KPDT
Chapter 4
4-129
48
Program*)
Performance Indicator*)
068 Demography and National Family Planning Agency (BKKBN) (Rp2.601,9 billion), including:
1 Demography and Family Planning Program - Percentage of families raising under five years old babies and children
understanding and implementing sound baby and children raising and
development
- Provinces receiving household resilience program for families with
under five years old babies and children
-
3 Accountability Supervision and
Improvement Program for the Officials of
BKKBN
5
-
Partners actively establishing cooperation in HR education and training
program
6
-
Percentage of personnel and general administration supervision
-
Monitoring, evaluation and development in financial and logistic
supervision
Policies, straegies and materials of legal information, administration
personsanization and public relation that can be used by all stakeholders
and parners
-
-
Percentage of working units performing financial accountability at
accountable accuracy rate
074National Commission on Human Right (Komnas HAM) (Rp72,8 billion), including:
1 Suppport Program for the Management and - Percentage of resolution for the complaints addressed to Komnas HAM
Implementation of Other Technical Tasks for
Komnas HAM
- Intitutional function of National Commission for Women increased to
establish independent, transparent and accountable institution in
implementing mandates of National Commission for Women
Outcome
- Proportional population growth in 2015
- Demographic development policies provided and docialized
4
6
100
1 center 33
provinces
5
- Quality in the implementation of human resources training and
researches on demographic and family planning program enhanced
- Accountability in program, personnel and general, financial and logistic
administraion management (good governance) improved
- Management supports for demographic and family program
implementation
98
80
70
- Supports for the management of technical task implementation of
Komnas HAM increased
Central Government Expenditure
Financial Note and Budget 2013
4 Suppport Program for the Management and Implementation of Other Technical Tasks for
BKKBN
49
79,6 (of
3,9 million active
members
33
Policies, strategies and information on access and quality of Family
Planning services (quality small families), special regions and special
targets operated
Partners receiving facility in reinforcing participation in Family Program
(KB) for quality small families (galcitas), special regions and special
targets
Curriculum, materials/media developed and used
-
2 Training and Development Program for
BKKBN
Target
2013
Chapter 4
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No
50
Program*)
075 Meteorology, Climatology and Geophysic Agency (BMKG) (Rp1.392,3 billion), including:
1 Meteorology, Climatology and Geophysis
- Provinces receiving information on weather forecast at district scale
Development and Improvement Program
every day via electronic and printed media
2 Support Program for the Management and
Implementation of Other Technical Tasks of
BMGK
51
3.
6
-
Locations capable of provising strong seismic quake inforamtion
400
-
164
-
Meteorology and Climatology Station of Air Quality and Geophysics
(MMKuG) which the equipment has been calibrated according to the
specified schedule
Draft government regulations
-
Personnel educated and trained
910
4-131
Constitution Awareness Program Program
Kesadaran Berkonstitusi
3
80%
Outcome
- Satisfaction of users for early extreme climate information and routine
wheather information to support transportation safety and disaster
management improved
- Satisfaction of users for earthquake, tsunami, technical seismology and
geophysics information to support national development and disaster
management improved
- Planning, legal, financial and asset, HR, supervision, education and
training and research and development management services to support
services and information of MHHsuG improved
- Capacity and credibility of general election and regional election
implementing organizations (KPU, KPU Provinces, and KPU
Kabupaten/Kota) increased
75%
-
Accuracy and compliance in financial services
40 units
-
Accuracy and compliance in financial services
100%
-
Accuracy in general election need information management
- Adequate operational facilities and infrastructure for KPU
- Quality of management support and implementation of other technical
tasks enhanced
85%
6
General administration and judiciary administration support increased,
which is modern and trustable
21
-
Facility, infrastructure and building development
Office supplied and equipment
Judicial Reviews, Government Agency Power Disputes
1
1
73
-
Cases of the election of Head of Region
Constitutional and procedure understanding on MK to increase
138
34
-
The dissemination of information on MK case and decision management
114
Quality of services supported with adequate facilities and infrastructure
enhanced
Consitutional cases settled in timely, transparent and accountable
manner
Constitutionality of people and constitutional culture enhanced
Chapter 4
4.
Facility and Infrastructure Improvement
Program for MK
Constitutional Case Handling Program
30
Technical Implementing Unit (UPT) BMKG disseminating early
information of air quality (Air Quality Monitoring System (AQMS)
077 Constitution Court (MK) (Rp199,8 billion), including:
1. Suppport Program for the Management and - Judiciary administration development and expansion
Implementation of Other Technical Tasks for
MK
- Constitutional publication materials of MK
2.
Target
2013
-
076 General Election Commission (KPU) (Rp8.492,0 billion), including:
1 Democracy Institutional Strengthening and
- Accuracy of analysis preparation in legal administration for the
Political Process Improvement Program
management of political parties, individuals participating in general
election and campaign fund of general election participants
- Percentage (%) of manuals and technical guidelines on general election
timely and accountably accomplished
2 Facility and Infrastructure Improvement
Program for KPU
3 Support Program for the Management and
Implementation of Other Technical Tasks of
KPU
52
Performance Indicator*)
Central Government Expenditure
Financial Note and Budget 2013
No
53
Program
*)
Performance Indicator*)
078 Financial Transaction Reporting and Analysis Center (PPATK) (Rp79,3 billion), including:
1. Suppport Program for the Management and - Percentage of quality and timely executive planning document
Implementation of Other Technical Tasks for
preparation, accounting systems and reporting with reference to the
PPATK
applicable regulations
- Percentage of BPK’s findings followed up
2.
Facility and Infrastructure Improvement
Program for PPATK
-
54
-
Analysis reports submitted to the police and other agencies, for which no
further clarification is necessary
300
-
Legal opinion and aids in respect of TPPU and terrorism funding and
other related problems
Financial Note and Budget 2013
Nuclear Energy, Isotop and Radiation
Development and Application Program
Facilities and infrastructure to support the implementation of main tasks
and functions of PPATK provided
100%
Participation of the related parties in TPPU and terrorism prevention and
eradication in Indonesia increased
32 documents
6
- Core competency fortified
6
- Efficient and effective research and development governance
-
Intellectual Rights (HKI) registered
45
- Capacities in scientific research, development and application improved
-
Scientific publications facilitated by Media and Reproduction Center
(BMR)
30
- Broader public access to sciences
080 National Nuclear Agency (BATAN) (Rp668,9 billion), including:
1. Suppport Program for the Management and - Documents of nuclear science and technology standardization
Implementation of Other Technical Tasks for
Batan
- Documents of nuclear technology education
2.
Quality support for the management and implementation of technical
tasks of PPATK
1
Institutional management performance increased to support nuclear,
isotop and radiation energy research and development
1
-
Varieties as the results of isotop and radiation application development
3
-
Infrastructure preparation package for nuclear power generation plant
development
1
The roles of nuclear science and technology to support national
development program intensified
Central Government Expenditure
Science and Technology Research,Mastery
and Application Program
Outcome
100%
100%
079 Indonesia Institute of Science (LIPI), including:
1. Suppport Program for the Management and - International and inter-discipline researh cooperations
Implementation of Other Technical Tasks for - Quality improvement and research facility development package for LIPI
LIPI
Cibinong Science Center
2.
55
Money Laundering and Terrorism Funding
Prevention and Eradication Program
100%
Percentage of Disaster Revovery Center (DRC) and archive office (2,220
m2 and land 6,000m2) and the furniture
Percentage of suitability of DRC completion and its design
3.
Target
2013
Chapter 4
4-132
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56
Program*)
Performance Indicator*)
081 Technology Review and Application Agency (BPPT) (Rp888,7 billion) including:
1. Suppport Program for the Management and - Accountability supervision reports
Implementation of Other Technical Tasks for
BPPT
2.
3.
Facility and Infrastructure Improvement
Program for BPPT
- General administrative service development with SOP, measurement and
evaluation to work and budget plan, governance administration and
accountable technology services
1
- Technology services to fortify the competitiveness of industries
-
BPPT laboratory to support national innovation system and Science and
Technology Improvement, Mastery, Development and Application
(BPPT)
BPPT facility development
Laboratory for Design Engineering and Technology Design Center
(BRDST)
Pilot Geothermal Power Plant (PLTP) 3 MW
1
Laboratory and office building of BPPT constructred in Serpong
Technology Review and Application Program -
082National Aviation and Space Agency (LAPAN) (Rp526,1 billion), including:
1 Aviation and Space Technology Development - Airborne RS aircrafts developed
Program
2 Suppport Program for the Management and Implementation of Other Technical Tasks for
LAPAN
Remote sensing technology research and application for terrestrial
resources
Space mindedness activity implementation (open houses, exhibition,
socialization, counseling, workshop, olympiads, competition, press
conference
083 Geospatial Information Body (Rp602,1 billion), including:
1 National Survey and Mapping Program
- Dynamic and diffusion spatial model review documens, atlas
dissemination and regional development review
- Regions (provinces and districts) nominated for the implementation of
data and information access and utility on resources atlas and regional
development review
-
Capacity building for personnel, infrastructure and administration
1
1
1
- Recommendations for the application of technology in IT, defense and
security, food, health, energy, transportation, natural resources and
- Technology intermediation in natural resources for government public
service agencies and disaster management technology to improve the
competitiveness of industries
1
- Capacity in mastering rocket, satellite and aviation technology increased
to suport the self-reliance and union of NKRI and national development
4
- Self-reliant capacity and production and services in remote sensing data
and information provision for users in various development sectors
11
- Quality of management support for coordination and services in
planning, personnel, assets, finance, supervision and communication and
public services enhanced to support LAPAN performance
1
14
6
- The use of base maps to support national development intensified
- The use of thematic spatial data and information from survey resuls on
natural resources and environment for natural resources and
environmental management and sustainable environmental function
protection intensified
- Good govenance, clean governance for respected, professional,
accountable, efficient and effective government through human
resources planning, supervision, legislation, research and development
4-133
Chapter 4
2 Support Program for the Management and
Implementation of Other Technical Tasks of
Bakosurtanal
1
Information system and standardization service management reports
-
58
Outcome
-
-
57
Target
2013
Central Government Expenditure
Financial Note and Budget 2013
No
59
Program
*)
Performance Indicator*)
084 National Standardization Body (BSN) (Rp98,5 billion), including:
1 National Standardization Development
- Products labelled with SNI in compliance with SNI requirements and
Program
their certifications traceable
2 Support Program for the Management and
Implementation of Other Technical Tasks of
BSN
3 Facility and Infrastructure Improvement
Program for Officials of BSN
60
-
Percentage (%) of physical facilities and infrastructure provided
8
70
3
80%
6
Outcome
- SNI complying with the needs of stakeholders increased
- Application of standards and accreditation increased
- Quality of the implementation of BSN's main tasks and functions
enhanced
- Facilities and infrastructure provided for the officials to carry out their
main tasks and functions .
1
- Standard safety and security in nuclear exploration according to national
and international regulation achieved
- Compliance of users to standard safety and security of nuclear energy use
-
Education and training quality management system documents
7
- Good governance realized
-
One Bapeten office constructed
1
- The capacity of facilities and infrastructure to support nuclear energy
application supervision increased
086 State Administration Institute (LAN) (Rp247,0 billion), including:
1 State Administration Review Program
- Academic drafts and draft Law on Civil Service Servants
1
- The suitability of reviews and research and development with the needs
-
Personnel education and training reform reports
1
- Quality of education and training for officials enhanced
2 Support Program for the Management and
Implementation of Other Technical Tasks of
LAN
-
Documents/manuals/reports in supervision and inspection
4
- Performance based organization development within LAN
-
Reports of Head of Land Regulation socialization/technical guiandce
1
- Integrated LAN product publication and dissemination
3 Facility and Infrastructure Improvement
Program for Officials of LAN
-
Building constructed
087 National Archive (ANRI) (Rp154,2 billion), including:
1 National Archive Program
- Prov/District/City governments receiving technical capacity building in
asset archive management according to laws and regulations
2 Support Program for the Management and
Implementation of Other Technical Tasks of
ANRI
3 Facility and Infrastructure Improvement
Program for ANRI
5483,2 m2
- Improved quality of facilities and infrastructure
23
- Effective and efficient national archive development
25
- State documents/archives salvation and protection in efficient and
effective manner
- Effective coordination of program and activity planning, regulations and
laws, archives, and development and administrative services and
resources management within ANRI
- Effective provision of office facilities and infrastructure for support
archive services
-
Institutions, which their archives are saved
-
Socialization of Government Regulation on the Implementation of Law
No.43/2009 concerning Archives
5
-
Tsunamy Center Archive depots developed in Aceh
1
Central Government Expenditure
Financial Note and Budget 2013
62
Industries/personsanizations receiving facilitation in standard/SNI
application
Human resources training according to training need assessment
085 Nuclear Supervisory Body (Bapeten) (Rp159,4 billion), including:
1 Nuclear Supervision and Application
- Nuclear plant inspection management system documents
Program
- Nuclear facility and activity management system documents
2 Support Program for the Management and
Implementation of Other Technical Tasks of
Bapeten
3 Facility and Infrastructure Improvement
Program for Officials of Bapeten
61
-
Target
2013
Chapter 4
4-134
No
63
Program*)
088 Civil Service Agency (BKN) (Rp535,1 billion), including:
1 Civil Service Management Program
- Institutions acting as pilot projects for Public Servant restructuring
2 Support Program for the Management and
Implementation of Other Technical Tasks of
BKN
3 Facility and Infrastructure Improvement
Program for BKN
64
Performance Indicator*)
- Policies on performance development formulated and regulations and
laws on personnel drafted
- Effective coordination in program and activity, resources planning and
1
-
Activity management documents
14
-
Percentage of education and training center building constructed (final
stage)
60%
65
administrative management within BKN
- Development, procurement and improvement of facilities and
infrastructure in BKN
375
-
K/L and regional governments implementing auditor functional
positions
Participants of sustantive education and training
962
- Quality of internal supervision to state finance accountability and SPIP
development within the ministries/agencies in economic affairs
enhanced
- More ministries/agencies and regional government introducing SPIP
according to the applicable regulations
- Quality of management support and capacity in internal supervision to
-
Facility and infrastructure provided
165
state finance accountability and SPIP development enhanced
- Facilities and infrastructure of officials in BPKP provided
090 The Ministry of Trade (Rp3.105,7 billion), including:
1 Domestic Trade Development Program
- SME developed and facilitated (technical guiandce, markenting, facility
support, partnership and financing)
2 Foreign Trade Improvement Program
- Users of online export/import licensing served through INATRADE
3 International Trade Cooperation
Improvement Program
- Policies on personnel planning and development formulated
NSP and supervisory manuals on personnel affairs
-
65
Outcome
9
-
089 Financial and Development Supervision Body (BPKP) (Rp1.250,4 billion), including:
1 Internal State Finance Accountability and
- Investigation audit report, state loss calculation and expert opinion as
Internal Government Control (SPIP) Program
requested by the investigating agencies
2 Support Program for the Management and
Implementation of Other Technical Tasks of
BPKP
3 Facility and Infrastructure Improvement
Program for BPKP
Target
2013
1.150 SMEs
4.000 companies
-
Socialization of international trade cooperation results
9
-
Results of international trade negotiations
37
Percentage of compliance in submitting time commodity trades reports
(PBK)
5 National Export Development Program
Total market intelligence
Total marketing points
-
- Effectiveness of policies to support domestic trade development
enhanced
- Effectiveness in foreign trade development enhanced
- International trade cooperation for export market access expansion
intensified
- International trade cooperation to secure national trade policies in
international forums intensified
89%
- Development, regulation and supervision of time commodity trades,
warehouse receipt system and auction market intensified.
14
2
- Access to export markets improved and export facilitation increased
- Export competitiveness fortified
Chapter 4
4-135
4 Commodity Market Efficiency Enhancement Program
Central Government Expenditure
Financial Note and Budget 2013
No
66
67
Program*)
Performance Indicator*)
091 The Ministry of People's Housing (Rp5.168,1 billion), including:
1 Housing and Settlement Area Development
- Total prosperous houses developed with the provision of neighborhood
Program
facility, infrastructure and utility (PSU)
-
Facilitation and stimulation of new housing development under self-help
fashion
2 Housing and Settlement Area Financing
Development Program
-
Documents of technical input, policy formulation, program and budget
for housing financing and settlement areas
3 Support Program for the Management and
Implementation of Other Technical Tasks of
the Ministry of People's Housing
-
Data and evaluation documents on housing and settlement areas
092. The Ministry of Youth and Sports (Rp1.956,7 billion), including:
1 Support Program for the Management and
- Publication and documentation
Implementation of Other Technical Tasks of - Documents of budget implementation verification processed according
the Ministry of Youth and Sports
to SOP
2 Facility and Infrastructure Improvement
- Areas of facilities and infrastructure developed/rehabilitated
Program for Youth and Sports
- Equipment and machine facility and infrastructure procurement and
Target
2013
Outcome
65.000 units
- Decent settlement neighborhoods of 1,020,000 units realized, and slum
areas decreased by 655 ha with PSU provision in housing compounds
20.000 units
- Self-help communities established in developing liveable and affordable
houses/shelters for 130,000 MBR in safe, hygienic, well-arranged and
harmonious neighborhoods
- Total low-income households (MBR) living in liveable and affordable
9
14
48
Chapter 4
4-136
No
houses increased with home financing facility
- Management support and the implementation of other technical tasks of
the Ministry of People's Housing
100%
- Financial and personnel planning, supervision and administration and
public service quality within the Ministry of Youth and Sports enhanced
20.000
- Facility and infrastructure management quality improved
110
distthousandtion
3 Youth and Sports Program
Financial Note and Budget 2013
68
Youth facilitated as enterpreneur cadres
5.000
-
Total young university graduates (sarjana) as rural development cadres
5.500
-
Sport industrial actors receiving facility of technical capacity building in
production or management for sport events
500
-
National sportmen
093. Corruption Eradication Commission (KPK) (Rp706,5 billion), including:
1 Support Program for the Management and
- Investigation personnel for KPK provided
Implementation of Other Technical Tasks of - The management of confiscated and seized goods
KPK
- Participation and active roles of youths in various development sectors
increased
- Participation of community in sport activities
- Participation of community in sports and their achievements both at
regional and international level elevated
1.500
70
75
- Percentage of bureaucracy component compliance increased
- Percentage of Human Resources according to focus areas increased
- KPK investigators increased
- Percentage of KPK building increased
- Percentage of operational budget allocation for KPK increase
2 Corruption Eradication Program
-
Cases supervised by KPT to go to the next stage
Decision of KPK leaders with regard to gratification
134
390
- Law enforcement index (survey, 1-10)
- Corruption eradication performance by KPK (scale 1-10)
- Grand corruption cases handled
- Conviction rate of the supervised cases
- Number of violations to code of ethics and code of conduct
Central Government Expenditure
4 Competition Sport Development Program
-
69
Program
*)
Performance Indicator*)
095. Regional Representative Council (DPD RI) (Rp595,5 billion), including:
1 Support Program for the Management and
- Support frequency for sessions/meeting of DPD RI
Implementation of Other Technical Tasks of
- Frequency of scientific journal publication of DPD RI
DPD RI
12 months
12 months
2 Facility and Infrastructure Improvement
Program for DPD RI
-
Facilities for DPD office in national capital (Jakarta)
12 months
-
Facilities for DPD in provincial capitals
12 months
3 DPD institutional strengtening program in
democracy system
-
Draft Laws of DPD concerning regional autonomy, the relationship of
center and regions, the establishment, subdivision and amalgamation of
regions
Frequency of meeting with regional governments, regional house of
representatives (DPRD) and local social elements
-
70
Target
2013
100. Judiary Commission (KY) (Rp91,9 billion), including:
1 Support Program for the Management and
- Judges’ investigation reports in first instance degree/appeal/Supreme
Implementation of Other Technical Tasks of
Court
KY
- Participants of capacity and professionalism building training of judges
2 Facility and Infrastructure Improvement
Program for KY
3 Supreme Judge Selection Performance
Improvement and Judge Behavior
Supervision Program
6 UU
Outcome
- Performance of Administration Bureu, Planning and Finance Bureau,
Data and Information Center, Regional Review Center, Policy and Legal
Review Center of Secretariate General of DPD improved
- General Affairs bureau performance improved
- Legislation, considerant and supervisory functions of DPD exercised and
public aspirations accomodated, and performance accountability of DPD
representatives
33 report
325 reports
Central Government Expenditure
Financial Note and Budget 2013
No
- Improved technical administrative support to Judiciary Commission(KY)
in activity financing, HR Development, accountability and public services
200 judges
-
Internal and external application systems implemented
6 aplications
-
Integrated judge’s track record database
Reports of communities managed and settled completely
400 data
120 reports
-
Participants of candidate judges passing the selection
210 persons
- Office facilities and infrastructure to support the implementation of tasks
and functions of KY improved
- Capacity of supreme judges in handing down quality decisions improved
and public complaints fully settled
Chapter 4
4-137
71
Program
*)
Performance Indicator*)
103. National Disaster Management Agency (BNPB) (Rp1.345,5 billion), including:
1 Support Program for the Management and
- International personsanization cooperation in natural disaster
Implementation of Other Technical Tasks of
management
BNPB
- Technical training
Target
2013
5
15
2 Facility and Infrastructure Improvement
Program for BNPB
-
Office building/education training center constructed
2
-
Facilities and infrastructure procured
12
3 Accountability Supervision and
Improvement Program for Officials of BNPB
-
Audit within the Deputy for Prevention and Emergency, Deputy for
Rehabilitation and Reconstruction, Disaster Management Education and
Training Center and Data and Information and Public Relation Center
28
-
Reports of Supervisory Activities (LHP) Inspectorate II according to the
standard in terms of quality and quantities
28
-
Logistics distthousandtion in disaster prone areas
33
-
Equipment provision for disaster prone areas
4 Natural Disaster Management Program
Outcome
- Coordination and integration of planning, development and controlling of
program, administration and facilities and infrastructure and
cooperation within BNPB improved
Chapter 4
4-138
No
- Coordination and integration of planning, development and controlling of
program, administration and facilities and infrastructure and
cooperation within BNPB improved
- Accountable supervision and inspection of tasks performed by internal
units within BNPB
- post-disaster rehabilitation and reconstruction in coordinated and
integrated manner
33 Prov/ 200 Kab- - Emergency management in fast, proper, integrated and comprehensive
Kota
manner
- post-disaster rehabilitation and reconstruction in coordinated and
integrated manner
- Logistic and equipment provision and distribution for disaster
management
104. National Body for Indonesian Migrant Workers and Protection (BNP2TKI) (Rp392,7 billion), including:
1 Support Program for the Management and
- Supervision and control of officials within BNP2TKI
Implementation of Other Technical Tasks of
BNP2TKI
- Quality of services to Indonesian Migrant Workers (TKI) based on
reviews, research and development and information increased
2 Indonesian Migrant Worker Placement and
Protection Facilitation Program
-
Indonesian Migrant Workers (TKI) services, placement, protection and
safeguarding implemented
Formal Indonesian Migrant Workers (TKI) increased complete with CTKI
potential maps by competency
24 working units
- Institutional strengthening to support Indonesian Migrant Worker (TKI)
placement and protection provided
8 topics
600.000 TKI
135.000
- Formal employment opportunities in the countries where Indonesian
Migrant Workers (TKI) are placed
- Migrant worker placement increased in terms of quality and quantity
- Quality of migrant worker protection enhanced
Central Government Expenditure
Financial Note and Budget 2013
72
73
Program
*)
Performance Indicator*)
105. Sidoarjo Hotmud Management Body (BPLS) (Rp2.256,9 billion), including:
1 Support Program for the Management and
- BPLS information system and media management
Implementation of Other Technical Tasks of - BPLS work area security
BPLS
2 Sidoarjo Hotmud Management Program
-
The drainage of hotmud to Kali Porong river
-
Social aids for residents beyond the affected area maps
Target
2013
5 reports
Outcome
- Annual performance of Bapel BPLS achieved
1 areas
- BPK's opinion to financial statements of Bapel BPLS maintained
48 million m3
- Secured feeling to residents in areas affected by Sidoarjo hotmud
16.709 persons
- Basic rights of the affected residents according to provisions set up in
Perpres complied with
- Capacity and security of Kali Porong in draining hotmud and flood
maintained
- Capacity of embankment to retain the mud maintained
Central Government Expenditure
Financial Note and Budget 2013
No
- Alternative road and relocation road infrastructure functional
74
106 Government Goods/Service Procurement Review Institute (LKPP) (Rp211,5 billion), including:
1 Support Program for the Management and
- Public relation and media actors knowing Government Goods/Service
Implementation of Other Technical Tasks of
Procurement (PBJP)
LKPP
- New LKPP organization structure establishment documents
40
- Function and organizational structure of LKPP revised
2
- Competent Human Resources
- Effective work system within LKPP
2 Facility and Infrastructure Improvement
Program for LKPP
-
Office building construction stage I
Land and building construction stage I
3 Government Goods/Service Procurement
System Development Program
-
PBJ human resources trained (international bidding certification)
-
Government goods/service profession certification
18.750
18.750
60
5.900
- Facilities and infrastructure of LKPP complied with
- Corruption cases, civil cases, business competition cases and
administration court in goods/service procurement affairs settled
- Coordination and synchronization of procurement monitoring and
evaluation based on goods/service procurement principles
- Electronic government goods/service procurement toward one national
market
- Transparent, consistent, efficient and accontable goods/service
procurement policies established and supports for anti-monopoly
principles to improve the roles of SME and domestic products
4-139
Chapter 4
- Strategy, policy and regulation on procurement sector socialized
75
76
77
Program*)
Performance Indicator*)
107.National SAR Body (Rp1.666,4 billion), including:
1 Support Program for the Management and
- Information system development and SAR data and information
Implementation of Other Technical Tasks of
provision
National SAR Body
- Internal supervision and development for National SAR Body (Basarnas)
- Management support and the implementation of other technical tasks of
Badan SAR Nasional
2 packages
-
Logistics management
30 packages
- Facilities and infrastructure provided for officials within Badan SAR
National
3 Search and Rescue Management Program
-
SAR training and education and socialization
30 packages
- Optimum search, rescue and salvation management
-
SAR communication management
30 packages
108. Anti-Monopoly Supervisory Commission (Rp119,8 billion), including:
1 Business Competition Supervision Program - Business competition socialization and education
- Cooperation between KKPU and external agencies
109 Suramadu Region Development Body (BPWS)(Rp399,6 billion), including:
1 Support Program for the Management and
- Information system and the supporting equipment
Implementation of Other Technical Tasks of - Facilitation support reports for BPWS activities in Jakarta
BPWS
-
Study document and one-stop licensing system reinforcement
Areas of land purchased (ha)
110 RI's Ombudsman (Rp67,7 billion), including:
1 Support Program for the Management and
- Percentage of timely prepared planning documents and reports
Implementation of Other Technical Tasks of
RI's Ombudsman
- Percentage of mediation producing agreement acceptable by all parties
111 National Body for Border Management (BNPP) (Rp274,1 billion), including:
1 Suppport Program for the Management and - Coordination and capacity building for regional officials with regard to
Implementation of Other Technical Tasks for
international border management
- Priority Location Based Master Plan documents for 2013 – 2014
BNPP
prepared
2 State Border and Border Area Management
- Facilities and infrastructure priority supports for defense and security
Program
affairs and law enforcement in sea and air borders provided
-
Transnational Post (PLBN) facility and infrastructure developed
23
16
2
2
3
24
100%
60%
16 reports
- Effective and credible business competition supervision to augment the
prosperity of people
Management support and the implementation of other technical tasks to
accelerate the development of Suramadu region
- Suramadu development plan prepared and implementable and one-top
licensing system established
- Efficient and effective regional development control
- Quality of management of working units, which is highly integrated,
accurate, and performance based character enhanced
- Quality of public services at national level in the introduction of good
governance principles enhanced
Management support and other technical support for the implementation
of tasks of BNPP secretariat
111 documents
2 unit Speedboat
survey; 10 unit
communication and
monitoring tool
5 PLBN
Transnational border and border areas effectively managed covering the
clarify and confirmation of international borders, potential infrastructure
development in border areas
Central Government Expenditure
Financial Note and Budget 2013
79
2 packages
Outcome
2 Facility and Infrastructure Improvement
Program for National SAR Body
2 Suramadu Region Development Acceleration Program
78
Target
2013
Chapter 4
4-140
No
80
Program
*)
112 Batam Free Trade and Port Area Management Body (BPKPB and PB Batam) (Rp885,0 billion), including:
1 Support Program for the Management and
- Reports of inter-governmental agency coordination
Implementation of Other Technical Tasks of
BPKPB and PB Batam
- Percentage (%) of using data center management
2 Batam Free Trade and Port Area
Management and Operation Program
81
Performance Indicator*)
-
Visits of ships
-
Capital investment licensing services
113 National Body for Terrorism Combat (Rp152,2 billion), including:
1 Terrorism combat program
- Prevention and counter propaganda task force for terrorism combat
-
82
114 Cabinet Secretariat (Rp213,4 billion), including:
1.
Suppport Program for the Management and - Percentage of progress in the preparation of Presidential Decree
Implementation of Other Technical Tasks for
concerning the Installment and Dismissal of governance positions and
Cabinet Secretariat
ranking and pensions for public civil servants in timely manner
2.
Policy Support Service Program to the
President and Vice President
-
-
83
Percentage (%) of legal protection for the victims, witnesses, and law
enforcers with regard to terrorism threats
-
4-141
-
Management suport and the implementation of other technical tasks in
Batam free trade and port area development and management
50%
129.470
Integrated and one-stop investment services to support investment
services
90
12
Improved capacity in monitoring, early detecting of terrorism attacks and
enhanced effectiveness in deradicalization process
100%
95%
- Quality of administrative services to officials whose are appointed by the
President
100%
100%
Quality of policy and program analysis in political, legal and security
affairs enhanced
Percentage of draft presidential regulation (Perpres), draft presidential
decree (Kepres), draft presidential instruction (Inpres) in political, law
and security affairs followed up into Presidential Regulation (Perpres),
Presidential Decree (Keppres) and Presidential Instruction (Inpres)
100%
Quality of Perpres, Keppres, and Inpres in political, legal and security
affairs enhanced
100%
Administrative support and operational activities of Bawaslu increased
Percentage (%) of data, information and public relation management
implemented
Percentage (%) of inter-agency relation coordination and public
participation services in general election implementation
100%
Percentage (%) of manual and technical guideline for General Election
supervision prepared
100%
100%
General election supervision intensified
Chapter 4
General Election Supervision Program
19
Outcome
Percentage of data and information dissemination in the website of
Cabinet Secretary
Percentage of government program policy analysis in political and
international relation affairs accomplished timely
115 General Election Supervisory Body (Bawaslu) (Rp856,6 billion), including:
1.
Suppport Program for the Management and - Percentage (%) of planning and budgeting documents and General
Implementation of Other Technical Tasks for
Election evaluation reports prepared
Bawaslu
2.
Target
2013
Central Government Expenditure
Financial Note and Budget 2013
No
84
Program*)
Performance Indicator*)
116 Radio Public Broadcasting Agency (LPP RRI) (Rp985,2 billion), including:
1. Suppport Program for the Management and - Percentage (%) of program, budget planning documents, LPP RRI reports
Implementation of Other Technical Tasks for
timely accomplished
LPP RRI
2.
Public Radio Broadcasting Management and
Operation Program
-
-
85
Broadcasting package production models of information, education,
environmental preservation, positive entertainment, social control and
nation image building
117 Television Public Broadcasting Agency (LPP TVRI) (Rp864,2 billion), including:
1. Suppport Program for the Management and - Public aspiration accommodation relating to institutional policies
Implementation of Other Technical Tasks for
LPP TVRI
2.
TV Public Broadcasting Management and
Operation Program
-
Database and information development
Broadcasting packages of information, positive entertainment, social
control and nation image building
-
Broadcasting program and production and news for local, regional and
national broadcasting either via terresterial, digital or new media
118 Sabang Free Trade and Port Area Management Body (BPKPB and PB Sabang) (Rp392,2 billion), including:
1. Suppport Program for the Management and - Documents of regional and connectivity development planning with the
Implementation of Other Technical Tasks for
surroundings
BPKPB and PB Sabang
2.
Sabang Free Trade and Port Area
Management and Operation Program
-
Information application and system development
-
Port and Yacht/Marina terminal development implemented
-
Licenses signed by BPKPB and PB Sabang
100%
Outcome
Coordination in program, activity and budget plan preparation and
evaluation and reporting improved and timely accomplished
100%
60 percent
areas,70
percent
population
10 packages
5
4
8.000
LPP RRI as the largest and world class radio broadcaster for nation
building
Good governance service administration within LPP TVRI
LPP TVRI as media to educate nation and strengtening the Unitary State
of Republic of Indonesia (NKRI)
50.400
2 documents
Supports for the management and implementation of other technical
tasks in the management and development of Sabang free trade and port
areas
1 aplication
100 Ha
2 license documents
Note
*) Program and Performance Indicator of Ministries/Agencies are parts of overall Program and Performance Indicator of the ministries/agencies concerned
Increased investments and one-stop services with fasility and
infrastructure planning and development supports and technology,
spatial planning, environmental management, promotion, business
development and local asset utilization
Central Government Expenditure
Financial Note and Budget 2013
86
Percentage (%) of program implementation monitoring and evaluation
on periodic basis
Percentage (%) of broadcasting infrastructure and facility covering
overall territories of Republic of Indonesia and domestic population
Target
2013
Chapter 4
4-142
No
Chapter 5
Fiscal Decentralization Policy
CHAPTER 5
FISCAL DECENTRALIZATION POLICY
5.1
General
Fiscal decentralization policy framework stems from 1945 Constitution mandating that the
Unitary State of Republic of Indonesia consists of provinces and further subdivided into
districts (kabupaten) and cities (kota). These regions have rights and obligations to manage
and execute their governance affairs as delegated respective of their financial capacities. For
the implementation of regional autonomy toward efficient finance management, some
authorities which were previously held by Central Government have been devolved to regions
through fiscal decentralization policy.
Fiscal decentralization policy apart from focusing on regional revenue is also directed to
regional expenditure. In terms of revenue, pursuant to Law Number 28 of 2009 concerning
Regional Tax and Service Charges, the regions have been granted with broader authority to
collect such regional taxes and services charges. They also reserve the right to take policies
on the imposition of these regional taxes and service charges, the management of central tax
switched into regional tax, and exploration of new tax sources so as to expand tax base in
regions.
The transfer of central tax to regional tax has been carried out under regional tax management
process. According to Law Number 28 of 2009, duty of land and building right transfer
(BPHTP), which was previously managed as central tax is now delegated to regions since
2011. Meanwhile, the transfer of Land and Building Tax from Rural Sector and Urban Sector
(PBB-P2) will be implemented no later than 2014. To expedite the transfer of PBB-P2 as
regional tax, the Government has taken a number of preparation steps including socialization,
technical guidance and facilitation to the regional governments (Pemda). In addition, the
Government has also established Team for the Preparation of BPHTB and PBB-P2 Tax
Transfer with a help desk function to assist the regions in dealing with various problems
relating to the transfer of such BPHTB and PBB-P2 to the regions and provide sample Regional
Regulations, organization structure and procedure, standard operating procedure, and data/
information that can be used as reference by regions. Some regions that have managed
PBB-P2 as regional tax are successful in improving their own regional tax as evident from
increase of revenue from PBB-P2 if compared with the revenue of DBH PBB-P2 when the
same tax was managed by the Central Government.
Apart from reinforcing regional taxes, another fiscal policy instrument, which is more
important and dominant is through Transfer to Regions allocation in APBN. For the last
three years, budget earmarked for Transfer to Regions is relatively enormous, i.e. around 30
percent of total Government Expenditure on the average. This transfer of regions consists of
Fiscal Balance and Special Autonomy Fund (Dana Otsus), and Adjustment Fund. Fiscal
Balance comprises Revenue Sharing (DBH), General Allocation Fund (DAU) and Special
Allocation Fund (DAK) that will be allocated to regions within unified fund transfer system
from the Government to regions so as to lessen vertical imbalance and horizontal imbalance.
Meanwhile the proceeds of Dana Otsus and Penyesuaian are allocated to finance the
implementation of special autonomy in Aceh Province, Papua Province and West Papua
Financial Note and Indonesia Budget 2013
5-1
Chapter
5
Fiscal Decentralization Policy
Province and progams having objectives of enhancing the quality of education, including
the Provision of Profession Allowances for PNSD teachers, Additional Fund of PNSD Teachers’
Incomes, and School Operation Aids (BOD). In general, Transfer to Regions budget allocation
policy is focused to: (1) fortify the fiscal capacity of regions and lessen vertical and horizontal
imbalances, (2) harmonize funding requirements of regions according to governance
allocation, (3) enhance the quality of public services in regions and reduce service gaps of
regions, (4) develop the capacity of regions in promoting local economy, (5) support national
fiscal sustainability, (6) enhance efficiency on the spendings of national resources, and (7)
improve synchronization of national development plan and regional development plan.
To supplement APBD funding sources, the regions can use proceeds from regional loans and
grants. These regional loans may be from Central Government, other regional governments,
banking institutions and non-banking institutions and communities with the issuance of
municipal bonds. The regional governments are, though, not allowed to look for foreign
loans, except for foreign loans relating to the transactions of municipal bonds in domestic
markets. Regional loans may be used to finance activities being the initiatives and authorities
of regions and/or to cover deficits of regional cash. However, these regional loans are only
one of several financing sources for the regions. Given that, they must be managed properly
according to criteria, requirements and mechanism established in laws and regulations. In
addition, regional loans must be controllable within the limits that will not generate negative
impacts to APBD and regional and national economy. Meanwhile, grants from the Central
Government is used to finance activities under the authority of regional governments
especially with regard to public service provision.
Apart from Transfer to Regions as APBD revenue, there are some types of APBN proceeds
that can be allocated through ministries/agencies to finance some activities in regions. These
proceeds may consist of deconcentration and co-administration fund and fund for the
implementation of National Community Empowerment Program (PNPM) and various
subsidies managed by the assigned ministries/agencies and not parts of APBD revenue. APBN
proceeds used to finance activities in regions either comprising Transfer to Regions or
ministries/agencies’ budget allocation reach nearly 60 percent of total Government
expenditure in APBN.
Transfer to Regions allocation and discretion to regions in managing regional taxes, loans
and grants reflect strong commitment of the Government in introducing fiscal
decentralization. This Government commitment must be followed with the seriousness of
the Regional Government in managing APBN in sound manner based on good governance
principles stressing accountability by overall officials in regions. APBD expansion as a result
of more funding sources must be followed with quality of spendings so that the existing fund
sources can be used to finance programs and activities with great added values to the
communities.
5-2
Financial Note and Indonesian Budget 2013
Fiscal Decentralization Policy
Chapter 5
5.2 Fiscal Decentralization Implementation Trend 20072012
5.2.1. The Implementation of Transfer to Regions Policy
Since the introduction of regional autonomy in 2001, the implementation of fiscal
decentralization policy shows steady improvements from year to year. This progress is
following the objectives, conditions, and dynamics of regional autonomy. One fiscal
decentralization policy instrument is Transfer to Regions Policy. In 2012, Transfer to Regions
Policy is exercised through funding system, which give more attention to fiscal gap aspect of
central government and regions and between the regions, the governance task allocation of
Central Government, provinces and districts/cities, quality and gap of public services in
regions, economic potential development in regions, efficient national resources spendings,
and synchronization of national development plan to regional development plan, development
acceleration for underdeveloped regions, the frontiers and conflict-torn regions. This funding
system consisting of Transfer to Regions allocation in APBN composes: (1) Fiscal Balance,
i.e. DBH, DAU, and DAK, and (2) Special Autonomy and Adjustment Fund.
DBH is allocated to regions based on APBN revenue to satisfy the needs of regions for the
implementation of decentralization. DBH is from the shared government revenue, i.e. tax
revenue and natural resources revenue. DBH tax consists of income tax Pasal 21 (PPh Pasal
21) and income tax Pasal 25 and Pasal 29 for Domestic Individual Tax Payers (PPh Pasal
25/29), Land and Building Tax (PBB) and Tobacco Product Excise (CHT). Meanwhile, DBH
from natural resources is from forestry, general mining, fishery, oil, gas and geothermal
sectors.
DAU is allocated to minimize horizontal imbalance in financing governance affairs under
the authority of regions. DAU is funneled to provinces and districts/cities based on total DAU
(national DAU), which its final sum is established in APBN, i.e. at least 26 percent of net
Domestic Revenue (PDN). The proportion of DAU between provinces and districts/cities is
set based on the authorities of provincial governments and districts/cities. DAU proportion
for province is set at 10 percent with the other 90 percent for districts/cities.
Meanwhile, DAK is allocated to assist the regions in financing programs/activities under
their authorities and of national priorities. This allocation aims to ensure that the regions
can afford to provide adequate public infrastructure and services at minimum standard service
level. DAK is earmarked upon three criteria, i.e.: (1) General Criteria, which is formulated
based on the financial capacity of regions concerned reflected from the general revenue of
APBD minus regional personnel expenditure; (2) Special Criteria, which is formulated
according to the laws and regulations and local characteritics of regions; and (3) Technical
Criteria established based on the indicators of special activities to be financed under DAK,
which are formulated under technical index set by the related technical ministries. These
criteria will not limit the scope of sectors to be financed under DAK. Given that in the next
progress, sectors financed with DAK tend to increase/change i.e. from 9 sectors in 2006 to 19
sectors in 2012.
Owing to such increasing sectors financed with DAK, the objectives of DAK allocation are
expanding proportionally, which deviate from the original philosophy, i.e. as specific grant
Financial Note and Indonesia Budget 2013
5-3
Chapter
5
Fiscal Decentralization Policy
to assist in public service provision acceleration in regions. In light of that, in future DAK
needs reformulation including the acceleration of the transfer of deconcentration and coadministration fund, which is used to finance governance affairs under the authority of
regions as DAK proceeds. It is important to take because according to BPK’s audit findings,
parts of ministries/agencies’ budget have been used to finance government affairs being the
authorities of regions. However, these proceeds can’t be immediately transferred into DAK
due to some problems/constraints including worries about the losing operational control of
the ministries/agencies to activities performed in regions if the said ministries/agencies’
proceeds are changed into DAK. This condition will also exert greater financial burderns to
the regions since they must allocate counterpart fund. Moreover, some non-physical activities
can’t be executed with DAK becuase DAK is more focused to finance physical activities. In
2012, the policy priorities on DAK allocation are more focused on the transfer of some
programs/activities, which are previously implemented by the ministries/agencies to
programs/activities executed by regions. With such transfer, the proceeds previously managed
by the ministries/agencies to finance governance affairs being the authorities of regions can
be allocated to regions in the forms of DAK or other transfer proceeds.
Aside from these three funds, to support the implementation of special autonomy in Aceh
and Papua, pursuant to Law No. 21 of 2001 concerning Special Autonomy for Papua jo Law
No. 35 of 2008 and Law No. 11 of 2006 concerning Aceh Governance, APBN also allocates
Otsus (Special Autonomy) fund. Otsus fund allocated for Papua Province and West Papua
Province is equivalent to 2 percent of national DAU ceiling with distribution of 70 percent for
Papua Province and 30 Percent for West Papua Province. On top of Otsus fund, these two
easternmost provinces receive Additional Infrastructure Fund in amount subject to the
financial capacity of the Government and additional portion of DBH (Revenue Sharing)
from Oil and Gas at respectively 55 percent and 40 percent of PNBP (Non-Tax) revenue
reaped from Oil and Gas extracted from these provinces. Otsus fund allocation for Aceh
Province will continue for 20 years as from 2008. The allocation is divided into two tranches,
i.e.: (1) for the first year to the fifteenth year, the sum is equivalent to 2 percent of national
DAU ceiling, and (2) for the sixteenth year to the twentieth year the sum will be equivalent
to 1 percent of national DAU ceiling. There is also additional DBH proceeds from oil and gas
in proportions same as to those received by Papua Province and West Papua Province, i.e. 55
percent and 40 percent respectively from PNBP (non-tax revenue) collected from Oil and
Gas extracted from Aceh province.
The allocation of Adjustment fund aims to support the implementation of national education
system and to accelerate infrastructure and facility provisions in regions. In line with APBN
policy, the scope of Adjustment Fund has changed from year to year. In 2007 this Adjustment
Fund was allocated in the form of Balance Fund granted to regions receiving DAU smaller
than previous year’s allocation (non-holdharmless principle). However, this non-holdharmless
principle was revoked in 2009. Adjustment Fund in 2009 collected fund allocation to finance
certain programs in infrastructure sector for particular term (ad hoc). The nomenclature of
Adjustment Fund for infrastructure is also changing in several fiscal years. The components
of Adjustment Fund allocated in education sector has same nomenclature. In 2009 the
components of Adjustment Fund consisted of Fiscal Decentralization Strengthening Fund
and Regional Development Acceleration Fund (DPDF and PPD), Additional DAU Fund,
Additional Fund for PNSD Teachers’ Incomes and DAK Underpayment and Infrastructure
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Financial Note and Indonesian Budget 2013
Chapter 5
Fiscal Decentralization Policy
Adjustment Fund. In 2010 the Adjustment Fund for Infrastructure renamed to Regional
Infrastructure and Service Strengthening Fund (DPIPD), Education Infrastructure
Development Acceleration Fund (DPPIP), and Fiscal Decentralization Strengthening Fund
and Regional Development Acceleration Fund (DPDF – PPD), and in 2011 it was changed
again to Regional Infrastructure Adjustment Fund (DPPID). In 2012, Adjustment Fund is
only budgeted for programs related to education, i,e, School Operation Aids (BOS), Teacher
Profession Allowance, Additional Fund for Teachers’ Incomes, Regional Incentive Fund and
Regional Government Project and Decentralization Fund. The trend of Adjustment Fund
from 2007 – 2012 can be seen in Table 5.1.
TABLE 5.1
REVISIONS TO ADJUSTMENT FUND, 2007-2012
No
Nomenclature
1
2
3
4
5
6
DAU Adjustment Fund
DAU Balance Fund
Education Allowance Fund
Additional DAU Fund
Adjustment Fund for Road Infrastructure
Adjustment Fund for Facilities and Infrastructure
7
Fiscal Descentralization Strengthening and Regional
Development Acceleration Fund (DPDF and PPD)
Dana penguatan Infrastruktur dan Prasarana Daerah
(DPIPD)
Education Infrastructure Development Acceleration
Fund (DPPIP)
Regional Incentive Fund
Additional Fund for Teacher Salaries
DAK and DISP Underpayment
Allowance for Teacher Profession
Regional Infrastructure Adjustment Fund
School Operation Aids (BOS)
Underpayment for West Papua Infrastructure and
Facility Fund FY 2008
Regional Government and Decentralization Program
8
9
10
11
12
13
14
15
16
17
2007
2008
2009
2010
2011
2012
Source: the Ministry of Finance
The allocation of Adjustment Fund in APBN has increased the proceeds transferred to regions
that exceed the sums established in Law Number 33 of 2004 concerning Fiscal Balance of
the Government and Regional Governments. To address these dynamics Law No. 33 of
2004 should be revised with the inclusion of provisions concerning the reformulation of
Fiscal Balance scope, revision to DBH (revenue sharing) more focusing on the introduction
of “by origin” principle, and strengthening the roles of governors in the distribution of DBH
proceeds to districts/cities within their provinces.
Budget of Transfer to Regions that has been allocated in APBN will be funnelled to regions in
view of cash performance of the Government, cash requirements of regions, and the objectives
of individual types of fund. DBH will be granted on quarterly basis taking into account the
realized government revenue to be shared. DAU is channelled to regions on monthly basis,
i.e. at one twelfth of DAU allocation to the respective regions subject to the enactment of
Financial Note and Indonesia Budget 2013
5-5
Chapter
Fiscal Decentralization Policy
5
Regional Regulation (Perda) on APBD. DAK is distributed in three tranches based on the
commitments and capacity of regions in realizing activities and absorbing the proceeds.
Regions are required to furnish Regional Regulation (Perda) on their APBD, to allocate
counterpart fund, and to submit fund absorption report as basis for DAK funneling. Special
Autonomy (Otsus) Fund is also released in stages. Adjustment Fund for education sector, i.e.
Teacher Profession Allowances, Additional Fund for Teachers’ Incomes, and BOS will be
granted on quarterly basis to finance activities in attempts of enhancing the quality of
education including the payment of allowances to PNSD teachers. Special for BOS proceeds,
their disbursement pattern in 2012 has been simplified, i.e. directly from government cash to
general cash of provinces for further distribution to basic education units in districts/cities in
the form of grant. In the past, BOS was channelled from the government cash account to
general cash account of districts/cities, and further distributed to schools.
Since Transfer to Regions proceeds plays leading role in APBD, its distribution mechanism
and pattern will be continually improved from time to time. In 2008, when it had
nomenclature of expenditure for regions, the distribution was made per region at payment
office of the region concerned. However, when this nomenclature renamed to Transfer to
Regions in 2008, the proceeds were directly transferred to general cash account of regions.
This change generates positive impacts to regional financial management including faster
enactment of Perda APBD, the introduction of treasury single account, certainty to the revenue
of regional cash, accelerated implementation of regional activities/spendings, and less budget
surplus at the end of fiscal year.
5.2.2 The Implementation of Transfer to Regions Budget
With the increasingly funding requirements for public service infrastructure provision in
regions, budget of Transfer to Regions has constantly increased from year to year. In 2007,
Transfer to Regions consisting of Fiscal Balance and Otsus and Adjustment Fund amounted
Rp.253.3 trillion (6.4 percent of GDP) and in 2012 this sum was to hike Rp.478.8 trillion (5.6
percent of GDP). The allocation of Transfer to Regions in 2012 is 16.4 percent higher than
last year’s allocation at Rp.411.3 trillion.
During period 2007 – 2012 the total budget for Transfer to Regions is to increase by 13.7
percent per annum on the average. The relatively exceeding rise was recorded in 2011, i.e. by
Rp.66.6 trillion or 19.3 percent from the allocation of Transfer to Regions in 2010. The trend
of Transfer to Regions from 2007 – 2012 is presented in Table 5.2. and Graph 5.1.
TABLE 5.2
TRANSFER TO REGIONS TREND, 2007 - 2012
(billion Rupiah)
Description
I. Fiscal Balance
a. Revenue Sharing (DBH)
b. Special Allocation Fund (DAU)
2007
LKPP
2008
LKPP
2009
LKPP
2010
LKPP
2011
LKPP
2012
APBN-P
243.967,2
278.714,7
287.251,5
316.711,3
347.246,2
62.942,0
78.420,2
76.129,9
92.183,5
96.909,0
108.421,7
164.787,4
179.507,1
186.414,1
203.571,5
225.533,7
273.814,4
408.352,1
c. Special Allocation Fund (DAK)
16.237,8
20.787,3
24.707,4
20.956,3
24.803,5
26.115,9
II. Special Auto & Adjust Fund
9.296,0
13.718,8
21.333,8
28.016,3
64.078,6
70.423,9
a. Special Autonomy Fund
4.045,7
7.510,3
9.526,6
9.099,6
10.421,3
11.952,6
b. Adjustment Fund
5.250,3
6.208,5
11.807,2
18.916,7
53.657,2
58.471,3
253.263,2
292.433,5
308.585,3
344.727,6
411.324,8
478.775,9
Total
Source: the Ministry of Finance
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Financial Note and Indonesian Budget 2013
Chapter 5
Fiscal Decentralization Policy
In nominal wise, the increase of
GRAPH 5.1
TRANSFER TO REGIONS TREND
Transfer to Region budget
(FISCAL BALANCE, SPEC. AUTONOMY & ADJUST. FUND) , 2007-2012
450,0
allocation covers overall types of
400,0
fund. For transfer of block grant
350,0
Spec. Auto. & Adjust. Fund
Fiscal Balance
character, DAU records the
300,0
highest upsurge, i.e. from
250,0
Rp.164.8 trillion (4.2 percent of
200,0
GDP) in 2007 to Rp.273.8
150,0
trilion (3.2 percent of GDP) in
100,0
70,4
64,1
2012 or 10.8 percent per annum
30,3
50,0
21,3
13,7
9,3
on the average. This higher
0,0
DAU is subject to the increase
APBN-P
of net domestic revenue (PDN)
2007
2008
2009
2010
2011
2012
and higher ratio of DAU
allocation to Net PDN to 26
percent during the period 2007 – 2012. Consistent with the increasing national DAU ceiling,
the distribution of DAU per region also records increase, despite varying rate. In 2011 and
2012, regions being the recipients of the largest DAU alloactions are respectively regions in
East Java Province, Central Java Province, West Java Province, North Sumatra Province
and Papua Province. As to the regions receiving they least DAU allocation, they are respectively
regions in DKI Jakarta provinces, Riau Island Province, West Sulawesi Province, Gorontalo
Province and Bangka Belitung Province. The trend of DAU allocation for provinces throughout
Indonesia in 2011 – 2012 can be seen in Graph 5.2.
408,4
347,2
314,4
trillion rupiah
278,7
287,3
244,0
Note: Realization 2007 to 2011 based on LKPP (audited)
Source: the Ministry of Finance
30.000
GRAPH 5.2
DAU FUND DISTRIBUTION TO PROVINCES THROUGHOUT INDONESIA , 2011-2012 *)
25.000
Billion Rupiah
20.000
15.000
2011
2012
10.000
5.000
0
*) DAU allocated to Provinces and Districts/Citieis of the province concerned
Source: the Ministry of Finance
Financial Note and Indonesia Budget 2013
5-7
Chapter
5
Source : Ministry of Finance
Fiscal Decentralization Policy
In addition to DAU, other transfer fund consisting of block grant, which its allocation is
steadily to rise is DBH (revenue sharing). In nominal wise, DBH is to go up from Rp.62.9
trillion (1.6 percent of GDP) in 2007 to Rp.108.4 trillion (1.3 percent of GDP) in 2012 or to
rise by 11.9 percent per annum on the average. This increase is attributed to higher realization
of shared revenue, both from tax or natural resources. In 2012, the realization of DBH sharing
by end of semester I reaches Rp.35.6 trillion or 32.8 percent of ceiling established in APBN at
Rp.108.4 trilion. This realization consists of DBH Taxes Rp.18.4 trillion (35.6 percent of
allocation ceiling) and DBH Natural Resources Rp.17.2 trillion (30.3 percent of allocation
ceiling).
Pursuant to Law Number 33 of 2004, the Government revenue from taxes and natural
resources shall be shared to regions under by origin principle in amount set according to the
realized revenue (by revenue). In 2011 and 2013 the largest DBH Tax is allocated for DKI
Jakarta province, i.e. 17.6 percent and 27.6 percent respectively of total national DBH tax.
Other regions receiving significant DBH tax allocation are East Java province, West Java
province, East Kalimantan province, and Central Java Province. Meanwhile the regions
receiving the least DBH tax allocation are respectively Gorontalo province, West Sulawesi
province, Bangka Belitung province, Bengkulu province and DI Yogyakarta province. The
distribution of DBH tax allocation can be seen in Graph 5.3.
12.000,0
GRAPH 5.3
TAX REVENUE DISTRIBUTION MAP PER PROVINCE IN INDONESIA
2011-2012*)
10.000,0
billion rupiah
8.000,0
6.000,0
2011
2012
4.000,0
2.000,0
-
*) Total DBH allocated for province and district/city in the province
concerned
Source: the Ministry of Finance
In 2011 and 2012, regions receiving significant DBH Natural Resources (SDA) allocation are
respectively East Kalimantan province, Riau province, South Sumatra province, Riau Island
province and Aceh province. In 2011 and 2012 regions in East Kalimantan province receive
DBH SDA allocation 37.5 percent and 42 percent respectively of total national DBH SDA.
Meanwhile, regions in Riau province during the said 2 years receive DBH SDA allocation at
respectively 21.7 percent and 23.1 percent of total national DBH SDA. Regions with the
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Financial Note and Indonesian Budget 2013
Chapter 5
Fiscal Decentralization Policy
smallest DBH SDA allocation are respectively DI Yogyakarta province, West Sulawesi
province, Bali province, Gorontalo province and Nusa Tenggara Timur province. The
distribution of DBH SDA allocation can be seen in Graph 5.4.
22.000,00
20.000,00
GRAPH 5.4
NATURAL RESOURCES REVENUE DISTRIBUTION MAP PER PROVINCE IN
INDONESIA, 2011-2012*)
18.000,00
billion rupiah
16.000,00
14.000,00
12.000,00
10.000,00
DBH SDA 2011
DBH SDA 2012
8.000,00
6.000,00
4.000,00
2.000,00
0,00
*) Total Natural Resources Revenue (DBH SDA) allocted to Province and Districts/City
of the Province concerned
Source: the Ministry of Finance
Apart from block grant proceeds, there is also specific grant of DAK (Special Allocation Fund),
which its amount is constantly increasing despite a decrease in 2010. DAK allocation at
national scale in 207 reached Rp.16.2 trillion (0.4 percent) (0.4 percent of GDP) and increased
to Rp.20.8 trillion (0.4 percent of GDP) in 2008 and Rp.24.7 trillion (0.5 percent of GDP in
2009. In 2010 DAK allocation was to drop to Rp.21.0 trillion (0.3 percent of GDP) as a result
of limited financial capacity of the Government. DAK allocation was to rise again to Rp.24.8
trillion (0.3 percent of GDP) in 2011 and Rp.26.1 trillion (0.3 percent of GDP) in 2012.
This DAK increase is due to (1) the bolstering financial capacity of the Government, (2)
more sectors financed under DAK, (3) new autonomous regions, and (4) transfer of parts of
ministries/agencies’ budget, which were previously used to finance governance affairs being
the authority of regions to DAK.
As for sectors financed under DAK, their number has increased from 9 sectors in 2007 to 11
sectors in 2009, 14 sectors in 2010 and 19 sectors in 2011 and 2012. They include education,
health, roads, irrigation, governance infrastructure, marine and fishery, water supply,
agriculture, environment, family planning, forestry, trades, rural infrastructure, drinking
water, sanitation, rural electricity, housing and settlement, land transport safety, rural
transportation, and infrastructure and facilities for border areas. Accordingly the regions
being the beneficiaries of DAK are also to raise, i.e. from 438 regions in 2007 to 476 regions
In 2011 and 2012 the benecifiaries of largest DAK allocation are respectively regions in Central
Financial Note and Indonesia Budget 2013
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Chapter
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5
Java, East Java, Papua, West Java and North Sumatra. As to the regions receiving the
smallest portions of DAK allocation are respectively regions in DKI Jakarta province, Riau
Island province, DI Yogyakarta province, Gorontalo province and Bangka Belitung province.
DAK allocation in 2011 and 201 by province can be seen in Graph 5.5.
2.500
GRAPH 5.5
DAK FUND DISTRIBUTION TO PROVINCES THROUGHOUT INDONESIA,
2011-2012*)
billion rupiah
2.000
1.500
2011
2012
1.000
500
Jatim
Jateng
Jabar
Papua
NTT
Sumut
Sulsel
Lampung
Aceh
Kalbar
Sumbar
Sulut
Sumsel
Sultra
Sulteng
NTB
Papua Barat
Kalteng
Malut
Maluku
Kalsel
Banten
Jambi
Bengkulu
Bali
Riau
Sulbar
Babel
Kaltim
Gorontalo
Yogayakarta
DKI
Kepri
0
*) Total DAK allocated in Province and districts/cities of the province
concerned n
Source: the Ministry of Finance
With higher ceiling of national DAU allocation and changing components of Adjustment
Fund, in nominal terms, the allocation of Otsus (Special Autonomy) and Adjustment Fund
in period 2007 – 2012 is also to change significantly. In 2007, budget for Special Autonomy
(Otsus) and Adjustment Fund was worth Rp.9.3 trillion (0.2 percent of GDP) and then
increased to Rp.28.0 trillion (0,4 percent of GDP) in 2010 and Rp.64.1 trilion (0.9 percent of
GDP) in 2011 and futher rose at Rp.70.4 trillion (0.8 percent of GDP) in 2012. The increase
of Otsus and Adjustment Fund, which was relatively significant in 2011 is driven by Adjustment
Fund policy for Regional Infrastructure and additional ceiling of BOS allocation and
professional allowance for PNSD Teachers. As to Otsus and Adjustment Fund increase in
2012 is due to higher ceiling of BOS fund, professional allowance of PNSD teachers. The
trend of Otsus and Adjustment Fund Allocation can be seen in Graph 5.6.
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Financial Note and Indonesian Budget 2013
Chapter 5
Fiscal Decentralization Policy
60,0
trillion rupiah
50,0
GRAFIK 5.6
TRANSFER TO REGION TREND
(SPECIAL AUTONOMY FUND, ADJUSTMENT FUND)
2007-2012
40,0
Special Auto. Fund
Adjustment Fund
30,0
20,0
10,0
0,0
APBN-P
2007
2008
2009
2010
2011
2012
Note: realization fro, 2007 - 2011 based on LKPP (audited)
Source: the Ministry of Finance
5.2.3 The Implementation of Regional Taxes and Service
Charges
One instrument for the implementation of fiscal decentralization is that of authority
delegation to the regional governments to collect taxes (taxing power). This policy of awarding
taxing power to regions is in conformity with Law Number 28 of 2009 stipulating that:
1.
The changing assessment of regional taxes and service charges from open-list system to
closed-list system. One aspect considered in adopting closed-list system is to give certainty
for the communities and business world on types of regional duties that must be paid,
and to enhance efficiency in regional tax and service charge collection. With this closedlist system, the regional governments can collect regional taxes and service charges as
established in the laws.
2. The grant of greater authority to regions in regional tax and service charge (local taxing
empowerment) under several policies:
a. The expansion of the existing regional tax base and service charge, such as tax base
for motor vehicles, motor vehicle right transfer, hotel tax, Restaurant Tax and Nuisance
Charge.
b. Expanding the types of regional tax and service charge, such as cigarette tax, swallow
bird nest tax, transfer of land right (BPHTB)tax, Rural and Urban Land and Building
Tax (PBB-P2), Calibration/Re-Calibration Service Charge, Education Service Charge,
Telecommunication Tower Charge and Fishery Business Permit Fees;
c. The introduction of maximum tariff for several types of regional taxes, such as motor
vehicles tax, motor vehicle name transfer, motor vehicle fuel tax, entertainment charge,
Financial Note and Indonesia Budget 2013
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Chapter
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5
parking fees, non-metalic and rock mineral tax; and
d. Discretion for tax tariff setting to the regions except for cigarette tax. Regions have full
discretion to set the tariff of regional tax insofar not exceeding the minimum and
maximum rates set in Law Number 2009. This taxing power is expected capable of
improving regional revenues from regional taxes and service charges as a result of
closed-list system. In this case, the regions are encouraged to optimize the collection
of their regional taxes and service charges based on valid legal basis and not to impose
new tax with insignificant potential and in violation with the laws and regulations.
3. Improving the management system of regional tax and service charges with better and
well-cut sharing of provincial taxs to districts/cities and earmarking policy for particular
types of regional tax. This tax sharing revenue reflects the accountability of provincial
governments in shouldering costs required by districts/cities to perform their functions
in delivering services to the citizens. Meanwhile, with earmarking policy, parts of revenue
collected from certain regional taxes will be allocated for the financing of activities that
can be immediately perceived by taxpayers.
4. Enhancing the effectiveness of regional tax collection supervision by changing the
supervision mechanism from repressive system (based on Law No. 34 of 2000) to
preventive and corrective system.
With regard to the implementation of fiscal decentralization, this policy change is expected
to bring about positive impacts, especially to the regional governments. The positive impacts
are, among other things, more room for the regional government to tailor their tax policies
to the local conditions, competitiveness between the regions in fostering investment climates,
better partnership between the regional governments and entrepreneurs/investors and
communities in development with clearer, more certain and simplier regulations. In addition,
this approach is expected to generate impacts to economic growth in regions supported with
adequate funding sources for the development of economic facilities and infrastructure.
5.2.3.1
Supervision and Revocation
The Government will oversee Regional Regulation (Perda) on PDRD issued by the Regional
Government. This oversight is carried out in preventive and corrective manner. Preventive
supervision is to evaluate Draft Perda PDRD that has been mutually approved between the
Head of Region and DPRD (Regional Parliament) before enacted into a Regional Regulation
(Perda). According to the laws, Draft Provincial Perda must be proposed to the Minister of
Home Affairs and for Draft District/Municipal Perda, it must be forwarded to the Government
no later than 3 working days after mutual approval. The Minister of Home Affairs and the
Governor will evaluate the Draft Perda in coordination with the Minister of Finance to approve
or reject the said Perda.
Meanwhile, corrective supervision is made to Perda on PDRD that has been enacted by the
regional government. Perda PDRD promulgated by head of region is submitted to the Minister
of Finance no later than 7 (seven) days after its enactment. If the said Perda is in contradiction
with public interests and/or higher laws and regulations, the Minister of Finance will
recommend the cancellation of the said Perda to the President, c.q. the Minister of Home
Affairs. This Perda cancellation recommendation by the Finance Minister to Home Affairs
Minister must be forwarded no later than 20 working days as from the receipt of Perda. At
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Chapter 5
the recommendation of Finance Minister, the Home Affairs Minister will propose the
cancellation of the said Perda to the President. Decision on the cancellation of Perda shall be
established in a Presidential Regulation no later than 60 working days since the receipt of
Perda as previously noted. Within 7 working days as from the decision of cancellation, the
Head of Region must halt the implementation of the affected Perda and then the local
parliament (DPRD) along with head of region revoke such Perda. If the province/district/
city rejects the revocation of Perda on justifiable ground, Head of Region has right to file
objections to the Supreme Court. If this objection is ruled either in part or in whole, the
verdict of Supreme Court will declare the Presidential Regulation void with no legal authority.
If the Regional Government breaches procedure for the enactment of Perda PDRD or
continues collecting regional taxes and service charges, which according to the Perda revoked
by the Central Government the same regional government shall be liable for sanction of
DAU and/or DBH pending and/or cut.
5.2.3.2 The Transfer of BPHTB and PBB-P2 into Regional Taxes
One continuous improvement taken by the Government is evident from the consistent efforts
in strengthening and revising fiscal decentralization policies to support goals of better public
services in regions. This consistency is not only reflected from fiscal decentralization
strengthening from spending side but also from revenue side with broader local taxing power.
A real reflection of this commeitment is the transfer of BPHTB and PBB-P2 into regional
taxes. The switch of these two taxes is a fundamental step to reinforce financial structure in
regions. From its characteristics, i.e. the majority of beneciaries, these two taxes are deemed
regional taxes. However, authorities for the setting of tax base, tariff and tax sharing and
administration remain in Central Government. With the introduction of Law 28 of 2009 all
power in tax collection has been granted to the regional governments. It is expected that
BPHTB and PBB-2 become a potential source of local revenue on top other regional taxes at
present.
The main justification and premise of transfering BPHTB and PBB-P2 into regional taxes
are: first theoretically, property tax has the following character, i.e. more local origin, visibility,
immobile tax object and close correlation of tax payers and the beneficiaries (the benefit taxlink principle). Second, the transfer of these two taxes are expected to improve Own Source
Revenue (PAD) and at the same time fortify APBD structure. Third, it aims to improve
public services, accountability and transparency in BPHTB and PBB-P2 management. Fourth,
based on practices in many countries, BPHTB and PBB-P2 are classified as local tax.
The transfer of BPHTB and PBB-P2 to regions is not only to strengthen the capacity of
regions in satisfying spendings required to run their governance, but more importantly to
make BPHTB and PBB-P3 management more effective. The regional governments are
supposed much more well-informed about the characteristics of their regions and know
better the needs of local citizens. With the transfer of BPHTB and PBB-P2 into regional tax it
is expected that the service to tax payers become more effective, efficient and accountable.
To maintain the quality of services to Taxpayers and other stakeholders during transitional
period, the process of transfering BPHTB and PBB-P2 to Regional Government should be
carried out in compliance with the following conditions:
1.
Process of transfering taxing power for BPHTB and PBB-P2 must be in smooth manner
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5
at minimum costs either for the transferor or the transferee;
2. The stability of BPHTB and PBB-P revenue for regional government must be soundly
maintained with minimum deviation to prevent excessive revenue loss to the regional
governments resulting from this transfer;
3. Citizens as the taxpayers must feel no change of service quality but enjoy significant
improvement in service quality and delivery.
5.2.3.2.1 The Implementation of BPHTB Transfer
Pursuant to Law Number 28 of 2009, BPHTB has been effectively transferred as district/city
tax as from 1 January 2011. Similar to other regional taxes, BPHTB can be only collected by
the regional government under a Regional Regulation (Perda). BPHTB Perda is a legal base
concerning BPHTB policies of a region covering the object, subject and taxpayers, tariff, tax
assessment and other provisions as necessary to collect PBHTB according to the local
conditions and characteristics of the region concerned. Thereafter, the regional government
must set out Regulation of Head of Region with regard to the implementation of such Perda,
which further elaborates BPHTB collection procedure, prepare human resources and establish
cooperation with other related parties and open account to collect BPHTB proceeds.
A number of efforts have been launched by the Government to encourage regions to
immediately enact their Perda BPHTB. During the socialization of BPHTB and PBB-P2 and
other activities relating to the regional governments, such as regional consultation and
technical assistance, the Government always urges the regions to lay down their Perda BPHTB
as soon as possible and remind the implications of their failure of enacting the said regional
regulations. However, some regions have yet to set up their Perda PBHTB due to various
constraints and considerations, such as the absence or minimum potential of BPHTB revenue,
prolonged discussion of draft Perda BHPTB with the local parliament (DPRD) and some
heads of regions engaged in legal cases and the preparation of regional elections or the
transition of head of region replacement.
The latest progress as
TABLE 5.3
of 31 July 2012 shows
THE READINESS OF REGIONS IN COLLECTING BPHTB
476 regions or 96.6
(Position: 31 July 2012)
percent have enacted
Total
their Perda BPHTB.
BPHTB Revenue (billion
These regions have
The Readiness of
No.
Regions
BPHTB potentials
2010
2011
Regions
(before the
(after the
99.99 percent of total
transfer)
transfer)
BPHTB revenue in
2010. Meanwhile, 16
1.
Perda enacted
476
7.902,47
8.225,71
regions or 3.4 percent
2.
Raperda (in process)
16
0,02
0
are still preparing
their Perda PBHTB.
Total
492
7.902,49
8.225,71
They have BPHTB
Source: the Ministry of Finance
revenue potential of
around 0.0003 percent of total PBHTB revenue in 2010. Data on the preparedness of regions
in collecting BPHTB can be seen in Table 5.3.
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Fiscal Decentralization Policy
Chapter 5
One success indicator of BPHTB transfer into regional tax is the capacity of regions in collecting
overall BPHTB potentials in their regions. Since BPHTB potentials are considerably dependend
on economic activities, the benchmark for comparison is therefore the realized BPHTB
revenue in previous year before the transfer. In terms of revenue, at nationwide scale, the
transfer of BPHT gives significant contribution to regional revenue, i.e. around Rp.8.2 trillion
or to rise by 4 percent higher than pre-transfer realization, albeit 16 regions not yet collect
PBB-P2 in 2011.
5.2.3.2.2 The Implementation of PBB-P2 Transfer
The transfer of PBB-P2 is designed not to be introduced simultaneously to all regions, but
subject to the preparedness of the regions in laying down a implementation regulation as
legal umbrella, software and hardware and human resources so that the transfer of PBB-P2
will not cause new problems and burdens to taxpayers and the regional governments. Legal
basis for the implementation of PBB-P2 transfer is as follows:
1.
Law Number 28 of 2009 concerning Regional Tax and Service Charges.
2. Government Regulation Number 69 of 2010 concerning Procedure for Award and Use
of Regional Tax and Service Charge Collection Incentives.
3. Government Regulation Number 91 of 2010 concerning Regional Taxes that can be
collected based on assessment by the Head of Region or paid personally by the taxpayers.
4. Joint Regulation of Finance Minister and Home Affairs Minister Number 213/PMK.07/
2010 and Number 58 of 2010 concerning Preparation for the Transfer of PBB-P2 as
Regional Tax.
5. Regulation of Finance Minister Number 148/PMK.07/2010 concerning Bodies or
International Agency Representatives Exempted from PBB-P2.
6. Regulation of Home Affairs Minister Number 56 of 2010 concerning Amendment to the
Regulation of Home Affairs Minister Number 57 of 2007 concerning Technical Guidance
for the Organizational Structure of Regional Institutions.
7. Regional Regulation on PBB-P2.
8. Regulation of Head of Region on Procedure for PBB-P2 collection.
The preparation stage of PBB-P2 transfer is regulated under Joint Regulation of Finance
Minister and Home Affairs Minister Number 213/PMK.07/2010 and Number 58 of 2010.
This joint ministerial regulation allocates the tasks and responsibilities of the Ministry of
Finance, the Ministry of Home Affairs and Regional Government. The tasks and
responsibilities of the Ministry of Finance are:
a. Compile, reproduce and submit to districts/cities some documents including: (1)
Implementation Regulation on PBB-P2; (b) standard operation procedure (SOP) for
PBB-P2, (c) organizational structure, tasks and function of Directorate General of Tax
on PBB-P2 collection, (d) data on PBB-P2 receivable and the supporting documents, (e)
Decree of Finance Minister on the assessment of Sales Value of Non – Taxable Object
(NJOPTKP) valid for 10 years before the transfer, (f) copies of villages/kelurahan, blocks
and land pricing zones, (g) PBB-P2 database, and (h) application system on PBB-P2;
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b. Monitor and develop the implementation of taxing power transfer on PBB-P2 to district/
municipal governments; and
c.
Provide technical training on PBB-P2 collection to district/municipal governments.
The tasks and responsibilities of the Ministry of Home Affairs are to prepare guide on
organizational structure and procedure of regional government, and to deliver advocacy,
consultation, and technical education and training as well as supervision with regard to the
transfer of PBB-P2 taxing power. Meanwhile, tasks and responsibilities assumed by the regional
government are to prepare facilities and infrastructure, organizational structure and
procedures, human resources, regional regulation and regulation of head of region, SOP,
and foster cooperation with other related parties including Tax Office, Land Office, Land
Deed Officials (PPAT), and banking institutions for PBB-P2 collection.
To provide guidance in respect of organizational structure and procedures within the regional
governments, Regulation of Home Affairs Minister Number 56 of 2010 concerning
Amendment to the Regulation of Home Affairs Minister Number 57 of 2007 concerning
Technical Implementation of Organizational Structure within Regional Institutions can be
referred to. Based this regulation, the regions can add some functions for PBB-P2 collection.
Besides, with such additional functions new Agency’s Technical Implementation Units (UPTD)
can be established as necessary.
In Law Number 28 of 2009 and Joint Regulation of Finance Minister and Home Affairs
Minister Number 213/PMK.07/2010 and Number 58 of 2010 there is a room for regions to
collect PBB-P2 ahead of 2014. If the regions are ready to collect this tax before 2014, they
must notify to the Minister of Finance and the Minister of Home Affairs no later than 30
June before the year of PBB-P2 transfer attached with Perda on PBB-P2.
As of 31 July 2012, 245 regions or 49.8 percent have laid down their Perda PBB-P2. They
cummulatively have PBB-P2 potential 91.2 percent of total PBB-P2 revenue in 2010. As to
the other 64 regions or 13.0 percent, their Perda PBB-P2 is under preparation. They have
PBB-P2 revenue potential reaching 2.3 percent of total PBB-P2 revenue in 2010. Meanwhile,
183 regions or 37.2 percent have yet to establish their Perda PBB-P2. They represent around
6.5 percent of PBB-P2 revenue potential if compared with total PBB-P2 revenue reaped in
2010.
Of 245 regions that have enacted their Perda PBB-P2, 1 region, i.e. Kota Surabaya has
collected PBB-P2 in 2011 and other 17 regions start to collect their PBB-P2 in 2012. Around
110 regions plan to gather PBB-P2 in 2014. Data on the preparedness of regions in collecting
PBB-P2 can be seen in Table 5.4.
To speed up the transfer of PBB-P2, in 2011 the Government together with the House of
Representatives (DPR) conduct socialization on PBB-P2 transfer as regional tax in 160
districts/cities. This socialization will be replicated in all districts/cities around the countries
until 2013 involving local parliament (DPRD), the related SKPD (agency working units)
Camat, Village/Kelurahan Heads, Land Office (BPN), KPP Pratama, Notary/PPAT,
academicians, and local leaders. The campaign is to arouse awareness and motivation of
regions to immediately prepare facilities and infrastructure required for PBB-P2 collection,
and as public announcement to the people and local officials who will be held responsible for
the collection of PBB-P2 as a regional tax.
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TABLE 5.4
THE READINESS OF REGIONS IN COLLECTION PBB-P2
(Position: 31 July 2012)
Total
No.
Percentage (%)
The Readiness of Regions
Regions
245**)
PBB-P2 Revenue
(2010)
PBB-P2
Revenue
(2010)
49,8
91,2
1.
Perda enacted
2.
Raperda (in process)
64
176.056.325.760
13
2,3
3.
Raperda not yet prepared
183
491.888.909.998
37,2
6,5
492
7.598.321.470.382
100
100
Total
6.930.376.234.624
No. Regions
Source: the Ministry of Finance
Note: *) PBB-P2 collection by districts/cities no later than 1 January 2014
**) start collecting PBB-P2:
- 2011 : 1 region (Kota Surabaya);
- 2012 : 17 regions;
- 2013 : 110 regions; and
- 2014 : 117 regions.
Another initiative of the Government to assure well-advanced PBB-P2 transfer, especially in
relation to human resources, State Accounting College (STAN) in association with the
Directorate General of Taxes and Directorate General of Fiscal Balance open D1 program in
Finance with concentration tax specialization in PBB-P2 appraisal and DI program in Finance
with concentration tax specialization in operator console (OC). Regions can send some of
their officials to be assigned to manage PBB-P2 collection to take these highly specialized DI
programs so as to assure sound PBB-P2 management.
5.2.4 The Implementation of Loans and Grants to Regions
5.2.4.1 Regional Loans
At nationwide terms, the majority of regions have to face financial shortages. They are
considerably dependent on fiscal balance with relatively limited Own Source Revenue (PAD).
The great portion of revenue has been used to finance personnel expenditure and material
expenditure. This condition has limited funding sources for infrastructure development in
regions. It is estimated that the national infrastructure development in 2010 – 2014 will
require budget around Rp.1,923.0 trillion, which are planned to be covered from three sources,
i,e, APBN, APBD and Private/SOEs. The funding capacity for infrastructure development
from APBN is around Rp.559.5 tillion, APBD Rp.355.1 trillion and Private/SOEs Rp.685.5
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trillion. Thus there is deficit Rp.323.7 trillion that must be provided to finance public service
infrastructure development.
To cover such funding decifit, new breakthroughs are deemed necessary including the issuance
of Municipal Bonds as financing source for infrastructure development. The Government
will encourage the regions to have sound fiscal capacity and financial management
performance to be eligible for municipal bond issuance. This is carried out with, among
other thing, faciliation and advocacy to regions in municipal bond issuance and revision of
laws and regulations concerning municipal bonds. The regulatory revisions include provisions
with regard to:
1.
Maximum threshold of regional loans including Municipal Bonds, in which the
outstanding loans plus loans to withdraw may not exceed 75 percent of total last year’s
APBD revenue.
2. Debt Service Coverage Ratio 2.5.
3. Maximum limit of APBD deficit for the next coming year shall be set by the Government,
i.e. in August of previous year with a view to controlling cummulative APBN and APBD
deficits not exceeding the rate set by the laws at 3 percent of Gross Domestic Product.
4. The issuance of municipal bond is subject to consent of DPRD and decided into a regional
regulation (Perda) concerning Municipal Bonds to ensure the commitment of regional
government in complying with debt services arising from the issued bonds.
5. The obligation of the region to allocate reserve fund for municipal bond redemption in
order to lessen default risk.
6. The regional government proposing the issuance of municipal bonds must meet the
requirement that its Financial Statements have been assessed with unqualified opinion
or unqualified opinion with explanatory paragrah.
7. The municipal bond can be only used to finance facility and infrastructure investments
to deliver public services that can generate revenue for APBD (revenue bond).
8. Municipal Bonds must follow regulations issued by capital market authority while highly
respecting good governance principles.
9. Municipal Bonds must be issued in domestic markets in rupiah currency to avoid exchange
rate risk and other risks relating to foreign currencies arising from the issuance of
Municipal Bonds.
5.2.4.2 Grant to Regions
Grant to regions is allocated to assist the regions in performing their governance affairs
under the authority of regions. Grant allocation to regions thus far is from SLA and foreign
exchange. In period 2010 – 2012 grant to regions has been used to finance multi-year activities
in several strategic service sectors such as water supply, transportation, irrigation, agriculture,
sanitation and basic education, In 2010 the Government funneled Rp.70.0 billion of grant
to regions for Local Basic Education Capacity (L-BEC), Water Supply Grant and Waste
Water Grant. L-BEC is the continuation of activities executed in 2009 and plans to end in
2012. Grant for water supply and waste water sector was commenced in 2010 and ended in
2011. For MRT and Water and Sanitation Project D (WASAP-D) no realization has been
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Fiscal Decentralization Policy
made due to delayed tender process in regions being the beneficiaries. They have yet to propose
grant application. The realization of grant to regions in 2010 resulted output of 265 capacity
building in education sector (L-BEC), 15,441 house water connections, and 1,620 house
wastewater connections.
For fiscal budget 2011, the realization of grant to regions recorded significant increase to
Rp.280.1 billion. Grant to regions in 2011 was basically the continuation of activities performed
in previous years, i.e. L-BEC, MRT, Water Supply Grant, Waste Water Grant and WASAPD. In addition, there is new activity, i.e. Infrastructure Enhancement Grant (IEG) from the
Government of Australia for sanitation sector. The said realization of Grant to Region reaching
Rp.280.1 billion has produced output of 416 capacity building in basic education sector (LBEC), 61,559 house water connections, 3,206 house waste water connections, solid waste
and waste water facilities in 21 districts/cities, Tender Assistance Services – 1 for MRT project
consultation services, and physical development of community and institution based
sanitation.
In 2012, grant allocation to regions receives two new activities, i.e. IEG Transporation and
Water Resources and Irrigation Sector Management Project Phase II (WISMP-2). Some old
activities that still continue in 2012 are L-BEC, MRT and WASAP-D. Budget allocation for
these five activities reaches Rp.1.8 trillion. This increase is particularly due to MRT activities
that will be made by end of 2012. The trend of grant to regions can be seen in Table 5.5.
TABLE 5.5
GRANTS TO REGIONS, 2010 - 2012
(billion rupiah
No.
Activities
2010
Realization
2011
Realization
2012
APBNP
1
L-BEC
2
Wastewater
3
Water Supply
4
WASAP-D
-
6,3
5
IEG Sanitation
-
43,4
-
6
MRT
-
6,8
1.570,6
7
IEG Transportation
-
-
6,4
8
WISMP-2
-
-
147,8
Total
24,5
45,9
8,1
16,0
-
37,4
161,7
-
70,0
280,1
54,5
11,7
1.790,9
Source: the Ministry of Finance
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5
5.3 Problems
and
Challenges
Decentralization Implementation
around
Fiscal
5.3.1 APBD Implementation
APBD plays crucial role in regional development. APBD is the implementation of fiscal policies
and at the same time the operationalization of programs launched by the regional
governments. From fiscal policy terms, APBD is an instrument to facilitate economic growth
and people’s welfare augmentation. Meanwhile from the program operationalization side,
expenditure allocation in APBD can be directed to provide facilities and and infrastructure
for public services, goods and service procurement, and employment generation.
percent
In view this significant role of APBD, the potential revenue sources must be managed in
optimum fashion. As to divisions/functions being the priority funding of regional spending
must be set based on real demands subject to the authorities of regional government. One
local revenue source is that of regional tax and service charge. This tax, however, is greatly
subject to economic development of the region concerned. Empiric phenomenon shows that
the more developed the economy of the region, the greater tax potential can be explored
from the communities. To assess the effectiveness of tax revenue against potential tax, tax
ratio and tax per capital calculation can be adopted. In 2012, the tax ratio of regions is
expected at 1.08 percent or to increase if compared with 2011’s tax ratio at 0.94 percent.
Meanwhile tax per capital ratio is to record Rp.333,407/capita or higher than its performance
in 2011 at Rp.264,520/capita. While in nominal terms it indicates steady increase, such tax
ratio and tax per capita ratio are still lower than regional economic scale (GDRP) and total
population. It indicates a relatively immense tax potential that can be further explored from
regions as their local revenue sources. To give more room in optimizing potential local
revenue from regional tax, according to Law No. 28 of 2009 the regions have been granted
with broader discretion to collect and manage regional tax and service charge to improve
their Own Source Revenue (PAD). For the last 5 years, the ratio of Own Source Revenue
(PAD) to Transfer to Regions tends to increase with the ratio of Transfer to Regions to total
revenue records diminishing trend. In 2007, the ratio of Own Source Revenue (PAD) to
total revenue was 16.8 percent and increase to 19.5 percent in 2012. In contrast, during the
same period, the ratio of
Transfer to Regions to
GRAPH 5.7
total revenue was to
NATIONAL FISCAL DEPENDENCY RATIO , 2007-2012
90
81,84
drop from 81.8 percent
79,73
79,61
79,05
78,48
80
in 2007 to 74.8 percent
74,83
70
in 2012 despite increase
60
50
to 79.0 percent in 2011.
40
The trend of the ratio of
30
Own Source Revenue
19,62
19,54
18,88
17,69
17,80
16,82
20
(PAD) to total revenue
10
and ratio of Transfer to
0
2007
2008
2009
2010
2011
2012
Regions to total revenue
PAD/Pendptn
Transfer/Pendptn
Li near (PAD/Pendptn)
Li near (Transfer/Pendptn)
can be seen in Graph
Note: 2008 - 2012 shows realized figures and 2011-2012 shows budget
fi gures
5.7.
Source: the Mi nistry of Finance (data processed)
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Chapter 5
Fiscal Decentralization Policy
Apart from granting power to manage revenue sources, the regions also have right to spend
the said revenue sources to finance the implementation of governance affairs according to
the local needs, priorities and characteristics of the regions concerned. Funding to such
governance affairs is expressed in material spending, capital spending and personnel spending
to run the local governance. Allocation to capital spending is for the provision of public
services with the budget allocated to personnel spending of human resources required to run
the governance and as for material spending it is used to provide public services and run the
governance.
According to APBD data from 2007 to 2012, the composition of personnel spending, material
spending and capital spending record some changes. In nominal wise, the allocation of
material spending in provincial APBD is to rise by 22.15 percent per annum on the average
or higher than the increase chalked up by capital spending and personnel spending that only
recorded rise of respectively 11.80 percent and 11.88 percent per annum on the average. For
the allocation to other spending covering interest subsidiy, grant, social aids, financial aids
and contingency it also records a relatively high increase, i.e. 25.47 percent per annum. The
trend of budget allocation for regional spending in provincial APBD can be seen in Table
5.6.
TABLE 5.6
PROVINCIAL APBD BY TYPE OF EXPENDITURE, 2007 - 2012
(million rupiah)
Type of
Expenditure
2009
20.294.351,80
22.436.755,13
24.525.339,15
27.060.196,75
31.557.445,83
35.522.391,87
11,88
15.899.234,62
18.946.451,76
23.381.317,79
26.496.708,71
33.836.642,92
42.015.829,83
21,55
Capital
18.593.753,82
18.897.948,87
24.145.248,29
24.952.962,20
26.482.423,14
31.815.255,75
11,8
Others
23.138.283,29
28.808.486,10
29.648.290,80
32.362.649,53
36.042.119,49
64.662.926,42
25,47
77.925.623,52
89.089.641,87
101.700.196,02
110.872.517,20
127.918.631,38
174.016.403,86
17,68
Material
Total
2007
2010
2011
2012
Avg. Growth
(%)
2008
Personnel
Note: 2007 - 2010 denotes realization and 2011 - 2012 denotes budget
Source: the Ministry of Finance (data processed)
For district/city, allocation for personnel spending in APBD 2008 to 2012 is to significantly
increase at 17.50 percent per annum on the average with material spending to rise by 14.50
percent per annum on the average. For the allocation of capital spending and other spending
they increase respectively by 8.93 percent and 8.45 percent per annum on the average. The
trend of allocation by type of spending in district/municipal APBD can be seen in Table 5.7.
TABLE 5.7
DISTRICT/CITY APBD BY TYPE OF EXPENDITURE, 2007 - 2012
(million rupiah)
Type of
Expenditure
2007
2008
2009
2010
2011
2012
Avg. Growth
(%)
101.058.581,05
126.078.403,06
143.627.408,41
172.502.016,17
197.523.527,28
225.630.184,51
Material
41.563.840,48
47.638.071,48
51.730.210,15
52.862.521,01
70.384.720,93
80.209.559,38
14,5
Capital
72.558.570,19
78.967.580,30
78.283.842,58
67.228.591,68
87.040.887,71
105.622.934,74
8,93
Personnel
Others
total
21.257.829,47
25.177.385,87
29.335.316,93
31.105.275,40
31.512.646,97
31.492.279,57
236.438.821,19
277.861.440,71
302.976.778,07
323.698.404,26
386.461.782,89
442.954.958,20
17,5
8,45
12,35
Note: 2007 - 2010 denotes realization and 2011 - 2012 denotes budget
Source: the Ministry of Finance (data processed)
In provincial APBD, the relatively high increase in the allocation for material spending and
other spending has caused the portion of goods and service spending to surge up from 20.40
percent in 2007 to 24.14 percent in 2012. Accordingly the portion of other spending to total
expenditure increased from 26.69 percent in 2007 to 37.16 percent in 2012 albeit in fluctuating
Financial Note and Indonesia Budget 2013
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TABLE 5.8
figures from 2009 to
PROVINCIAL APBD RATIO, 2007 - 2012
2011. As to the portion
(percent)
of capital spending it
Type of
2007
2008
2009
2010
is relatively to decline
Expenditure
26,04
25,18
24,12
24,41
and so is the portion of Personnel
Material
20,40
21,27
22,99
23,90
personnel spending
23,86
21,21
23,74
22,51
despite insignificant Capital
Others
29,69
32,34
29,15
29,19
rate. The trend of
Total
100,00
100,00
100,00
100,00
portions of personnel Note: 2007 - 2010 denotes realization and 2011 - 2012 denotes budget
spending, material Source: the Ministry of Finance (data processed)
spending,
capital
spending and other spending can be seen in Table 5.8.
2011
2012
24,67
20,41
26,45
24,14
20,70
18,28
28,18
37,16
100,00
100,00
For district/municipal APBD, the relatively high increase of personnel spending allocation
has also surged the porting of personnel spending more than 50 percent to total APBD
expenditure, while during 2010 to 2012 the figures are a little bit lower. The portion of capital
spending in 2007 used to record 30.69 percent and then dropped to 20.77 percent in 2010
and again rose to 22.52 percent and 23.85 percent in 2011 and 2012 respectively. The portions
of material spending and other spending are relatively to fluctuate at 16 – 18 percent and 7 –
9 percent range. Likewise, APBD proceeds allocated for activities in the provision of public
service facilities and
TABLE 5.9
DISTRICT/CITY APBD RATIO BY TYPE OF EXPENDITURE, 2007 - 2012
infrastructure are
(percent)
relatively smaller than
Type of
2007
2008
2009
2010
2011
2012
those expended for Expenditure
Personnel
42,74
45,37
47,41
53,29
51,11
50,94
governance operation Material
17,58
17,14
17,07
16,33
18,21
18,11
30,69
28,42
25,84
20,77
22,52
23,85
spending including for Capital
Others
8,99
9,06
9,68
9,61
8,15
7,11
the
payment
of
Total
100,00
100,00
100,00
100,00
100,00
100,00
teachers’ salaries and Note: 2007 - 2010 denotes realization and 2011 - 2012 denotes budget
Source: the Ministry of Finance (data processed)
medical operators
directly engaged in public service delivery. The trend of ratio of district/municipal APBD by
type of spending can be seen in Table 5.9.
The uses of local revenue sources are also evident from the allocation of spending by function.
Provincial APBD expenditure earmarked to education and health functions in 2011 was to
rise by 87.13 percent and 78.89 percent respectively if compared with their realization in
2008. As to allocation for public service spending it increased 23.90 percent. Special for other
functions including economic, environmental, law and order, housing and public facilities,
tourism and culture and social protection functions they only increase 19.98 percent. The
trend of allocating more APBD expenditure to education function is also found in district/
municipal APBD. The relatively high portion of spending allocation for education function is
due to payments of teachers’ salaries including profession allowances and additional allowance
to PNSD teachers’ income.
5.3.2 Enhanced Quality in Regional Financial Management
The quality of regional expenditure has been a hot issue during the last decade. It is due to
the fact that a few regions received poor audit opinions from BPK for their financial statements
compounded with insolvent spending structure, which is more expended for apparatus
5-22
Financial Note and Indonesian Budget 2013
Fiscal Decentralization Policy
Chapter 5
spending and non-optimum budget absorption generating excessive Budget Surplus (SILPA),
meanwhile needs on public service facilities and infrastructure are not yet fully satisfied.
According to BPK’s audit to the Financial Reports of Regional Government (LKPD), the
LKPDs receiving WTP (unqualified opinion) and WDP (unqualified opinion with explanatory
note) are to go up from 287 LKPDs in 2007 to 375 LKSPs in 2010. Meanwhile, LKPDs with
disclaimer and adverse assessment are to decline from 182 LKPDs in 2007 to 141 LKSPs in
2010. While the number of regions with WTP and WDP opinion is to significantly hike, the
regions with poor opinion remain high, i.e. around 27 percent of total regions. To enhance
the quality of financial management in regions, the Government has improved budgeting
system, regional financial implementation and accountability supported with human
resources development within the regional governments. This system improvement is carried
out with the revisions of various laws and regulations on financial management such as
government accounting standard standars and provisions on goods and service procurement.
To develop human resources in regions, training has been delivered to financial managers in
regions with Regional Accounting Course (KKD) and Special Accounting Course on Regional
Financial Administration/Accounting (KKDK). In addition the Government is also
contemplating the introduction of certification to regional financial management position.
APBD proceeds, which are more expended in government officials, are also an aspect requiring
further restructuring to enhance the quality of regional expenditure. The restructuring include
moratorium of public servant recruitment while administering the existing personnel according
to the real needs and workloads of individual institutions. To abate personnel spending burden
in APBD, the revised Law Number 33 of 2004 proposes limitation of personnel spending in
APBD so that it can be controlled at the financial capacity of APBD.
The quality of financial management in regions can be seen from budget absorption. During
2008 – 2011 the budget absorption rate is to rise from 99.5 percent in 2008 to 93.8 percent in
2009 and 99.0 percent in 2010 and 2011. Despite constantly increasing absorption, on the
other side the realization of capital spending remains low since it is more accumulated in the
end of fiscal year. For the last 4 years the realization of capital spending is to reach 92.9
percent on the average or lower than the realization of personnel spending, material spending
and other spending that record 98.7 percent on the average. Viewed from spending pattern,
more than 60 percent of spending ceiling, especially capital spending is implemented in the
fourth quarter of the year. It is worried that the high realization of capital spending in the
last months approaching the end of fiscal year will affect the quality of output produced,
which is not consistent with the specified SPM (minimum service standard). To deal with
this problem, the Government must urge the timely prepared APBD so that the regional
spending can be implemented in the early fiscal year. This is more obvious for the
implementation of spending requiring tender process. Regions failed to submit Perda APBD
within the specified time will receive sanctions of postponed DAU and DAK distribution. For
those capable of submitting Perda APBD punctually they will be awarded with Regional
Incentive Fund.
5.3.3 Implications to Regional Economic Development
APBD exerts significant influence to the local economic progress with policies on regional
revenue and expenditure. From revenue side, the policies on regional tax and service charge
will have great influence over investment climate and economic activities in regions.
Financial Note and Indonesia Budget 2013
5-23
Chapter
Fiscal Decentralization Policy
5
Meanwhile in terms of expenditure, APBD proceeds allocated for material spending and
capital spending will influence to investment and economic activities in regions. Capital
spending will produce output of public service facilities and infrastructure that in turn will
attract the interests of investors to make investments. Meanwhile, material spending will
stimulate local economic activities.
Investments in regions for the last few years show upward trend. Based on data of Capital
Investment Coordination Body (BKPM), total investments of both foreign investments (PMA)
and domestic investments (PMDN) in 2011 were to surge up by 20.3 percent, i.e. from Rp.208.9
trillion in 2010 to Rp.251.3 trillion in 2011. Reviewed by regions, the majority of investments
of PMA and PMDN are still concentrated in Java, Sumatra and Kalimantan. For other regions
such as in Sulawesi, Maluku, Papu and Bali and Nusa Tenggara the investments are relatively
small. The trend of investments can be seen in Table 5.10.
TABLE 5.10
INVESTMENT REALIZATION TREND IN INDONESIA, 2007 - 2012
No.
Province
PMA (billion rupiah)
2007
2008
2009
PMDN (billion rupiah)
2010
I
SUMATERA
12.587
9.197
7.297
6.832
2011
18.689
II
JAVA
76.531
122.015
88.071
105.157
510
859
2.197
4.597
2.707
1.038
2.686
716
589
-
-
22
93.073
III BALI & NUSA TENGGARA
IV
KALIMANTAN
V
SULAWESI
VI
MALUKU
VII PAPUA
TOTAL
2007
2008
2009
2010
10.754
4.840
7.820
4.224
2011
16.334
119.921
18.669
12.230
25.768
35.141
37.176
8.574
16
29
51
2.119
357
18.395
17.269
1.558
1.822
2.934
14.576
13.467
1.331
7.857
6.438
3.882
1.147
1.188
4.338
7.228
55
2.276
1.274
-
-
-
-
14
168
26
3.171
12.106
-
295
41
229
1.425
133.866
101.663
148.285
175.271
34.879
20.363
37.800
60.627
76.001
Source: Capital Investment Coordinating Body (2012)
To arouse the interests of investors, promotion and policy facilitation from the Government
are necessary. The Central Government with Master Plan for the Acceleration, Expansion
and Development of Indonesia’s Economy (MP3EI) proclaimed since 2011 gives clear guidance
for investors wishing to make investments in regions for medium and long terms. MP3EI
concept underlines that the success of economic development is not only dependent on the
Government but also joint collaboration between the Government, Regional Government,
BUMN (State Owned Enterprises = SOEs), BUMD (Regional SOEs) and private sectors. The
Government and regional governments are responsible to give security assurance, licensing
facilitation, and fiscal and non-fiscal incentives with regulation system improvement.
Meanwhile SOEs, Regional SOEs and private parties are to perform investments, manage
production/distribution and create employment.
In line with the bolstering investments, Indonesia records distinctive economic growth. In
2010, the national economic growth was at 6.1 percent placing this country as the third
Asian country with highest economic growth after China and India. In 2011 this figure
further increased at 6.5 percent. By regions in 2011 most provinces recorded strong economic
growth. Of them 14 provinces chalked up economic growth higher than national rate. Only
two provinces recorded negative growth, i.e. Papua and Nusa Tenggara Barat. The trend of
economic growth in 2010 and 2011 can be seen in Graph 5.8 and Graph 5.9 respectively.
Disparity in economic growth among the provinces shows economic gap and inequal
development. According to Willamson’s Index 2007–2011, it is evident that the inequality of
economic activities as reflected from Inter-Province GDRP (not including DKI Jakarta
5-24
Financial Note and Indonesian Budget 2013
Chapter 5
Fiscal Decentralization Policy
30
GRAPH 5.8
ECONOMIC GROWTH 2010
25
percent
20
15
10
National Economic Growth: 6,1%
Di atas Pertumbuhan Ekonomi Nasional
1 NTB
6.29% 9 Jambi
7.31%
2 Sumut
6.35% 10 Gorontalo 7.63%
3 Kalteng 6.47% 11 Sulteng
7.79%
4 Maluku 6.47% 12 Malut
7.96%
5 DKI Jakarta6.51% 13 Sulsel
8.18%
6 Jatim
6.68% 14 Sultra
8.19%
7 Sulut
7.12% 15 Sulbar
11.91%
8 Kep. Riau 7.21% 16 Papbar
26.82%
5
0
-5
Source : Central Bure au of Statistics (data proce ssed) )
30
25
GRAPH 5.9
ECONOMIC GROWTH 2011
20
15
National Economic Growth: 6,5%
10
5
0
-5
-10
Source : Central Bure au of Statistics (data proce ssed)
province) still exists despite
diminishing trend. Table 5.11
shows that in 2006 according to
Williamson’s
Index
the
economic activity is to reach
0.59 and to drop to 0.43 in 2011.
TABLE 5.11
WILLIAMSON INDEX FOR GRDP, 2007 - 2011
2007
Indonesia
Sumatra
2008
2009
2010
2011
0.49
0.48
0.47
0.44
0.43
0.52
0.52
0.51
0.48
0.48
0.17
0.17
0.17
0.17
0.20
Aside from economic growth Java
indicator, the success of Bali and Nusa Tenggara
0.42
0.43
0.43
0.43
0.43
economic developmet in regions Kalimantan
0.82
0.82
0.80
0.72
0.73
can be seen from poverty rate, Sulawesi
0.20
0.19
0.19
0.20
0.20
regional income per capita, and
Maluku and Papua
0.52
0.50
0.53
0.51
0.60
unemployment rate. For the last
* not including DKI
3 years, regions with relatively Source: Central Bureau of Statistics (BPS) (data processed)
high poverty rate like Papua,
West Papua, Maluku, Gorontalo, managed to cut their poverty rate faster than in Java –
Bali where the poverty reduction is lower. It indicates catching-up process in welfare
Financial Note and Indonesia Budget 2013
5-25
Chapter
Fiscal Decentralization Policy
5
augmentation by the regions, which are relatively backward. Regional income per capita
indicator shows significant disparity between the provinces. In 2011, province with the lowest
regional income per capita was West Java at around Rp.945,000/person with the highest
regional income per capita found in West Papua at Rp.12,795,000/person. In addition there
are some provinces with relatively high regional income per capita. They include Papua,
East Kalimantan and North Maluku. Unemployment indicator was to drop from 7.79 percent
in 2009 to 7.14 percent in 2010 and 6.56 percent in 2011. In 2011 regions with relatively high
unemployment rate is Banten province and DKI Jakarta province by 13.6 percent and 10.80
percent respectively. The trend of people welfare indicators can be seen in Table 5.12.
TABLE 5.12
APBD PER CAPITA TO PEOPLE WELFARE RATIO, 2009 - 2011
Province
W. Java
Banten
C. Java
E. Java
DIY
Lampung
NTB
N. Sumatra
S. Sulawesi
Bali
NTT
S. Sumatra
W. Kalimantan
W. Sumatra
Jambi
C. Sulawesi
DKI Jakarta
W. Sulawesi
S. Kalimantan
Gorontalo
Babel
SE Sulawesi
Sultra
Bengkulu
Riau
Kep. Riau
Maluku
Aceh
C. Kalimantan
N. Maluku
E. Kalimantan
Papua
W. Papua
APBD per Capital
(thousand rupiah)
2009
887
934
1.003
1.058
1.471
1.255
1.547
1.491
1.857
2.160
1.893
1.987
2.050
2.153
2.445
2.570
2.404
2.418
2.746
2.839
3.109
3.075
2.954
3.006
2.942
3.563
4.022
3.597
4.219
4.277
7.049
10.072
11.145
2010
855
859
1.018
1.053
1.490
1.236
1.524
1.521
1.828
1.971
1.867
1.926
2.014
2.144
2.241
2.419
2.308
2.187
2.647
2.686
2.892
2.918
2.900
2.920
2.819
3.716
3.513
3.492
3.978
4.017
6.279
7.456
10.903
2011
945
1.037
1.145
1.237
1.550
1.555
1.802
1.820
2.068
2.200
2.213
2.248
2.318
2.399
2.545
2.664
2.714
2.718
2.905
3.051
3.108
3.170
3.223
3.240
3.290
4.033
4.052
4.109
4.218
4.484
6.838
8.255
12.795
Poverty Rate
2009
11,96
7,64
17,72
16,68
17,23
20,22
22,78
11,51
12,31
5,13
23,31
16,28
9,30
9,54
8,77
18,98
3,62
15,29
5,12
25,01
7,46
18,93
9,79
18,59
9,48
8,27
28,23
21,80
7,02
10,36
7,73
37,53
35,71
2010
11,27
7,16
16,56
15,26
16,83
18,94
21,55
11,31
11,60
4,88
23,03
15,47
9,02
9,50
8,34
18,07
3,48
13,58
5,21
23,19
6,51
17,05
9,10
18,30
8,65
8,05
27,74
20,98
6,77
9,42
7,66
36,80
34,88
Unemployment
2011
10,65
6,32
15,76
14,23
16,08
16,93
19,73
11,33
10,29
4,20
21,23
14,24
8,60
9,04
8,65
15,83
3,75
13,89
5,29
18,75
5,75
14,56
8,51
17,50
8,47
7,40
23,00
19,57
6,56
9,18
6,77
31,98
31,92
2009
10,96
14,97
7,33
5,08
6,00
6,62
6,25
8,45
8,90
3,13
3,97
7,61
5,44
7,97
5,54
5,43
12,15
4,51
6,36
5,89
6,14
4,74
10,56
5,08
8,56
8,11
10,57
8,71
4,62
6,76
10,83
4,08
7,56
2010
10,33
13,68
6,21
4,25
5,69
5,57
5,29
7,43
8,37
3,06
3,34
6,65
4,62
6,95
5,39
4,61
11,05
3,25
5,25
5,16
5,63
4,61
9,61
4,59
8,72
6,90
9,97
8,37
4,14
6,03
10,10
3,55
7,68
2011
9,83
13,06
5,93
4,16
3,97
5,78
5,33
6,37
6,56
2,32
2,69
5,77
3,88
6,45
4,02
4,01
10,80
2,82
5,23
4,26
3,61
3,06
8,62
2,37
5,32
7,80
7,38
7,43
2,55
5,55
9,84
3,94
8,94
Souce: the Ministry of Finance and BPS (data processed)
5-26
Financial Note and Indonesian Budget 2013
Chapter 5
Fiscal Decentralization Policy
Intensified economic activities in regions, which are stimulated by Government expenditure
and private investments, have increased the sum of outstanding money and price fluctuation
for both goods and service (inflation) in regions. In 2011 data of inflation acquired from 66
cities as shown in Table 5.13 indicates diminishing trend if compared with inflation rate in
2010. To maintain price stablibility since 2011 Regional Inflation Controlling Team has been
established (TPID) in several cities of such 66 cities. Their inflation rates will be monitored
by BPS. To curb inflation, TPID and the regional government will focus to deal with structural
problems relating to shortages of basic need supplies as a result of limited food production,
poor distribution infrastructure, long distribution chains, illegal stock and levies and seasonal
effects.
TABLE 5.13
ANNUAL INFLATION RATE IN 66 CITIES, 2008 - 2011
(in percent)
No.
City
2008
2009
2010
2011
No.
City
2008
2009
2010
2011
1
Lhokseumawe
15,04
3,92
7,19
3,55
34 Probolinggo
5,63
3,50
6,68
3,78
2
Banda Aceh
11,97
3,49
4,64
3,32
35 Madiun
5,99
3,37
6,54
3,49
3
Padang Sidempuan
10,70
1,86
7,42
4,66
36 Surabaya
10,41
3,34
7,33
4,72
4
Sibolga
13,78
1,62
11,83
3,71
37 Serang
13,69
4,49
6,18
2,78
5
Pematang Siantar
10,25
2,72
9,68
4,25
38 Tangerang
6,23
2,49
6,08
3,78
6
Medan
9,94
2,67
7,65
3,54
39 Cilegon
4,55
3,08
6,12
2,35
7
Padang
13,09
2,06
7,84
5,37
40 Denpasar
10,52
4,29
8,10
3,75
8
Pekanbaru
10,54
1,93
7,00
5,09
41 Mataram
12,43
3,14
11,07
6,38
9
Dumai
8,04
0,84
9,05
3,09
42 Bima
8,85
4,03
6,35
7,19
10 Batam
8,59
1,88
7,40
3,76
43 Maumere
6,31
5,16
8,48
6,59
4,32
Jambi
11,09
2,50
10,52
2,76
44 Kupang
10,47
6,33
9,97
12 Palembang
11
13,30
1,83
6,02
3,78
45 Pontianak
11,58
4,86
8,52
4,91
13 Bengkulu
14,53
2,89
9,08
3,96
46 Singkawang
5,68
1,20
7,10
6,72
14 Bandar Lampung
14,35
4,17
9,95
4,24
47 Sampit
8,32
2,83
9,53
3,60
15
Pangkal Pinang
18,40
2,17
9,36
5,00
48 Palangkaraya
12,16
1,38
9,49
5,28
16 Tanjung Pinang
6,95
1,45
6,17
3,32
49 Banjarmasin
11,03
3,80
9,06
3,98
17
11,11
2,32
6,21
3,97
50 Balikpapan
11,14
3,54
7,38
6,45
3,98
2,13
6,57
2,85
51
12,78
3,99
7,00
6,23
DKI Jakarta
18 Bogor
19 Sukabumi
Samarinda
7,51
3,43
5,43
4,26
52 Tarakan
8,78
7,01
7,92
6,43
11,68
4,10
5,56
4,17
53 Manado
9,00
2,34
6,28
0,67
21 Bandung
9,85
2,09
4,53
2,75
54 Palu
10,67
5,60
6,40
4,47
22 Cirebon
13,87
4,06
6,70
3,20
55 Watampone
10,11
6,67
6,74
3,94
12,23
3,21
6,82
2,87
7,35
1,39
5,79
1,60
4,12
3,99
3,35
20 Tasikmalaya
23 Bekasi
5,05
1,93
7,88
3,45
56 Makassar
24 Depok
6,09
1,30
7,97
2,95
57
12,30
2,81
6,04
3,40
58 Palopo
7,77
26 Surakarta
8,26
2,58
6,65
1,93
59 Kendari
15,97
4,52
3,87
5,09
27 Semarang
11,15
3,13
7,11
2,87
60 Gorontalo
7,88
4,26
7,43
4,08
25 Purwokerto
28 Tegal
Parepare
8,63
5,69
6,73
2,58
61 Mamuju
8,52
1,77
5,12
4,91
29 Yogyakarta
10,03
2,89
7,38
3,88
62 Ambon
10,07
6,41
8,78
2,85
30 Jember
10,12
3,71
7,09
2,43
63 Ternate
12,17
3,83
5,32
4,52
5,47
2,71
6,75
4,18
64 Manokwari
14,54
7,36
4,68
3,64
32 Kediri
10,11
3,54
6,80
3,62
65 Sorong
11,01
3,28
8,13
0,90
33 Malang
11,93
3,33
6,70
4,05
66 Jayapura
15,51
1,95
4,48
3,40
31 Sumenep
Source: Central Bureau of Statistics (BPS) (data processed)
Financial Note and Indonesia Budget 2013
5-27
Chapter
Fiscal Decentralization Policy
5
5.4 Budget of Transfer to Region in 2013
5.4.1 Budget Policy for Transfer to Regions in APBN 2013
Budget for Transfer to Regions is an instrument of fiscal decentralization policy aiming to
finance governance tasks under the authority of regions in the context of regional autonomy.
The implementation of budget policy on Transfer to Regions will not only take funding
requirements for the implementation of governance tasks in regions into account but also
the financial capacity of the Government and objectives to pursue in the fiscal year concerned
based on programs/activities set as national development priorities. Budget policy of Transfer
to Region in 2013 will be directed to support development sustainability in regions and to
enhance the quality of programs/activities being priorities in regions based on Minimum
Service Standard (SPM) established for individual sectors. In detail, the objectives of budget
allocation for Transfer to Regions in 2013 are as follows:
1.
Develop the fiscal capacity of regions and reduce fiscal vertical and horizontal imbalances;
2. Harmonize the funding requirements of regions according to the governance tasks
allocation of the Government, provinces and districts/cities;
3. Enhance the quality of public services in regions and reduce public service disparities
between the regions;
4. Support national fiscal sustainability;
5. Develop the capacity of regions in exploring their local economic potentials;
6. Enhance efficiency in utilizing national resources;
7. Improve synchronization of national development plan and regional development plan;
8. Fortify the competitiveness of regions; and
9. Give more attention to the development of under-developed regions, outer regions and
the frontiers.
To support the implementation of the foregoing policies, APBN 2013 allocates budget for
Transfer to Regions at Rp.528.6 trillion (5.7 percent of GDP), which composes 84.1 percent
of Fiscal Balance and the other 15.9 percent of Special Autonomy and Adjustment Fund. The
said ceiling of budget allocation for Transfer to Regions implies an increase of 10.4 percent if
compared with its ceiling in APBNP 2012 at Rp.478.8 trillion.
5.4.1.1
Fiscal Balance
In APBN 2013, Fiscal Balance is planned to amount Rp.444.8 trillion (4.8 percent of GDP),
which of this sum 22.9 percent is DBH, 70.0 percent DAU and 7.1 percent DAK. This ceiling
reflects an increase of 8.9 percent from the ceiling set in APBNP at Rp.408.4 trillion.
5.4.1.1.1
Revenue Sharing
Revenue Sharing is proceeds coming from APBN revenue allocated to regions based on certain
percentage to finance the needs of regions in the context of decentralization implementation.
Policies for the implementation of DBH allocation in 2013 refers to provisions set forth in
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Law Number 33 of 2004, Law Number 11 of 2006 concerning Aceh Government, Law
Number 35 of 2008 concerning the Enactment of Perpu (Presidential Regulation in lieu of
Law) Number 1 of 2008 concerning Amendment to Law Number 21 of 2011 concerning
Special Autonomy for Papua Province into a law, and Law Number 39 of 2007 concerning
Amendment to Number 11 of 1995 concerning Excise, and Government Regulation Number
55 of 2005 concerning Fiscal Balance.
In 2013, DBH policies are directed to: (1) revise calculation and enactment process of DBH
allocation in more transparent and accountable manner; (2) revise budgeting and
implementation system of PNBP shared to regions; (3) improve data accuracy through
coordination with institutions managing non-tax revenue (PNBP) and tax revenue; (4)
maintain the sustainability of timely and accurate proceeds distribution system with
reconcialization system of data from the Government and revenue producing regions; and
(5) settle DBH underpayment.
In APBN 2013, DBH allocation is planned to reach Rp.102.0 trillion (1.1 percent of GDP),
which of this sum 49.0 percent is from DBH Tax and the other 51.0 percent from DBH
Natural Resources. This ceiling reflects a decrease of 6.0 percent from its ceiling in APBNP
2012 set at Rp.108.4 trillion. The lower DBH ceiling in 2013 is attributed to smaller PBB
revenue plan resulting from the transfer of PBB-P2 to regional tax and the declining non-tax
revenue from oil and gas sector, and the absence of budget for PPh underpayment in APBNP
2012.
5.4.1.1.1.1
DBH Tax
DBH Tax consists of Income Tax (PPh) Pasal 21 and PPh Pasal 25/29 for Domestic Individual
Taxpayers (WPOPDN), Land and Income Tax (PBB), and Tobacco Product Excise (CHT).
The allocation of DBH PBB (Land and Building Tax) is set in view of implications of Law
Number 28 of 2009 with regard to the transfer of PBB-P2 into regional tax that will be
carried out according to the preparedness of the regions concerned. In 2013 it is expected
that there will be around 107 regions collecting PBB-P2 as their regional tax. Then no later
than 2014, all regions will manage PBB tax in rural and urban sectors. As the consequence
of transferring PBB-P2 into regional tax there will be no longer DBH allocation for PBB in
such sectors in APBN.
The allocation of DBH PPh will refer to Article 13 Law Number 33 of 2004 and Article 8
Government Regulation Number 55 of 2005. According to these provisions, the sum of
DBH PPh Pasal 21 and PPh Pasal 25/29 WPOPDN (Domestic Individual Taxpayers) shall be
20 percent of revenue reaped from the PPh concerned. DBH PPh Pasal 21 and Pasal 25/29
WPOPDN transferred to regions shall be proportioned by 12 percent for district/city and 8
percent for province. The portion of district/city is further apportioned 8.4 percent for the
producing region and the other 3.6 shall be distributed equally to all districs/cities within a
province. The producing region is the place where the taxpayers registered and/or where the
taxpayers run their business activities.
For DBH PBB, the allocation ceiling in APBN 2013 will refer to Article 12 paragraph (1), (2),
and (3) Law Number 33 of 2004 and Article 5 and Article 6 Government Regulation Number
55 of 2005. Under these regulations: (a) the portion of regions for PBB shall be set at 90
percent of total PBB revenue with further breakdowns as follows: 64.8 percent for districts/
cities, 16.2 percent for province, (b) collection fee 9 percent of PBB revenue, and (c) the
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portion of the Government 10 percents of PBB revenue. The said collection fees 9 percent
shall be divided between the Government, province and district/city with different percentage
for each PBB sector. Meanwhile, for the portion of the Government at 10 percent, it shall be
further distributed as follows: 6.5 percent equally apportioned to districts/cities and the other
3.5 percent as incentive to districts/cities which the realization of PBB-P2 in previous year
reaches or exceeds the estimated sums.
In the mean time, allocation ceiling for DBH CHT (Tobacco Product Excise) in 2013 is decided
in compliance with Article 66A Law Number 39 of 2007 and Decision of Constitution Court
of Republic of Indonesia Number 54/PUU-VI/2008 of 14 April 2009. According to these
provisions, DBH CHT shall be distributed to province producing the excise of tobacco products
and province producing tobacco at 2 percent of revenue from tobacco products. Such DBH
CHT revenue is then distributed to districts/cities of the province with the following proportion:
30 percent for province and 70 percent for districts/cities. The portion of districts/cities are
further apportioned by 40 percent for the producing district/city and the other 30 percent
equally distributed to other districts/cities. At variance with DBH Tax, which is block grant,
DBH CHT is specific grant, i.e. used to (a) enhance the quality fo raw materials; (b) develop
industries; (c) develop social environment; (d) socialize provisions on excise; and/or eradicate
illegal excisable goods.
According to tax revenue sharing and in view of provisions on DBH tax including CHT, in
APBN FY 2013, the allocation of DBH Tax is planned to amount Rp.50.0 trillion (0.5 percent
of GDB), or to drop by 3.3 percent if compared with the allocation of DBH Tax in APBNP
2012 of Rp.51.7 trillion. Such DBH allocation in APBN FY 2013 consists of: (a) DBH PPh
Rp.22.1 trillion; (b) DBH PBB Rp.26.0 trillion, including DBH PBB underpayment Rp.223.1
billion, and (c) DBH CHT Rp.1.9 trillion including DBH CHT underpayment Rp.91.6 billion.
5.4.1.1.1.2
DBH Natural Resources
DBH coming from natural resources (SDA) consists of oil mining, gas mining, forestry,
general mining, fishery and geothermal mining. According to Article 14 letter a and letter f
and Article 106 paragraph (1) Law Number 33 of 2004, starting from 2009 the allocation of
revenue sharing to regions from oil and gas will be respectively 15.5 percent and 30.5 percent
of total revenue minus tax components and other charges. The portion of 5 percent from
such DBH Oil and Gas will be used to increase basic education budget and apportioned to
the allocation of education budget of minimum 20 percent in APBN. The portion of 0.5
percent of DBH Oil and Gas in question will be exempted for provinces and districts/cities
regulated under special autonomy laws.
The implement the mandate of Law Number 21 of 2001 as amended with Law Number 35
of 2008 concerning Special Autonomy for Papua and Law Number 11 of 2006 concerning
Aceh Goverment, APBN 2013 allocates additional DHB Natural Resources of Oil and Gas
for West Papua Province and NAD province. The breakdowns of the said additional allocation
are oil 55 percent and gas 40 percent leaving total revenue proportions of oil and gas 70
percent respectively.
To meet the mandate of Law Number 33 of 2004 and Government Regulation Number 55
of 2005, the portions of regions from Natural Resources of General Mining, Forestry,
Geothermal and Fishery are set at 80 percent of total revenues. The allocation of DBH Natural
Resources is based on the estimated revenue established in APBN. For the distribution, the
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calculation of DBH Natural Resources in the current year will undergo reconciliation
mechanism on quarterly basis between the data in central institutions and producing regions.
Based on non-tax revenue plan from oil and gas, general mining, forestry, geothermal and
fishery sectors and in view of provisions with regard to the distribution of DBH revenue
sharing, in APBN 2013, DBH Natural Resources (SDA) is allocated at Rp.52.0 trillion (0.6
percent of GDP). This ceiling is 8.3 percent lower than its allocation in APBNP 2012 reaching
Rp.56.7 trillion. Such DBH Natural Resources in APBN 2013 consists of DBH Oil Sector
Rp.18.7 trillion, DBH Gas Sector Rp.16.5 trillion, DBH General Mining Sector Rp.14.1 trillion,
DBH Forestry Sector Rp.2.3 trillion, DBH Fishery Sector Rp.144.0 billion and DBH
Geothermal Sector Rp.322.8 billion.
5.4.1.1.2
General Allocation Fund (DAU)
DAU is fund from APBN revenue allocated to equalize the financial capacity of regions in
meeting their needs in the context of decentralization implementation. The sum of National
DAU is considerably dependent on net Domestic Revenue collected in APBN. Net Domestic
Revenue (PDN) policy will at all time take reduction elements of PDN while increasing the
real DAU allocation every year. Total DAU is set at minimum 26 percent of net PDN established
in APBN.
DAU allocation to regions is calculated using formula prepared with reference to DAU
calculation database. The adoption of this formula is to change since the introduction of Law
Number 33 of 2004 and Government Regulation Number 55 of 2005 that have been
effectively taking into effect as from 2006. This change concerns the components of minimum
allocation (AM) and fiscal imbalance (KF). Before 2006, DAU formula was divided into two
main components, i.e. the minimum allocation (AM) and fiscal imbalance (KF). AM is
calculated based on lumpsum components and personnel expenditure proportion. As from
2006, these AM and KF components have been revised into basic allocation (AD) and fiscal
gap (CF). This CF based DAU allocation is a component for the equalization of financial
capacity of regions while taking the difference of fiscal needs and fiscal capacity of the region
concerned into account.
Based on DAU distributed to provinces and districts/cities in APBN 2013:
1.
Basic Allocation (AD) is calculated according to the sum of PNSD salaries including
basic salary plus family allowance and occupational allowance as set out in public servant
remuneration regulation and in view of other policies on remuneration and public servant
recruitment; and
2. Fiscal Gap (CF) is the difference of fiscal needs and fiscal capacity.
a. Fiscal needs are reflected from variables of total population, areas, construction price
index, human development index, and GRDP per capita, and
b. Fiscal capacity is represented by variables of Own Source Revenue (PAD), DBH Tax,
and DBH Natural Resources not including DBH Reboisation Fund.
Meanwhile, to expand the equality of fund allocation to regions and deal with horizontal
imbalance, any measure to improve data accuracy in DAU calculation covering fiscal needs
and fiscal capacity and basic allocation data will be continued. To assess the best equalization,
Williamson Index (WI) is adopted. WI is standard parameter to assess the equality of financial
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capacity of regions. It implies that the smaller figure of WI indicator, the narrower fiscal
variation or imbalance and the better financial capacity of regions will be.
Thereafter, the improve DAU function as a tool to minimize horizontal fiscal imbalance,
analysis to horizontal fiscal imbalance can be formulated by determining the proportions of
DAU components, which among other thing can be made by reducing AD proportion to CF.
The smaller role of AD in DAU formula the greater role of CF based formula will be. The
latter have more flexibility in correcting horizontal fiscal imbalance. The stronger CF role in
DAU formula by limiting AD can produce better equalization with the adoption of fiscal gap
benchmark.
To improve horizontal equalization, the application of DAU formula may give a region with
smaller DAU than the last year’s allocation, since the said region records significant fiscal
capacity improvement. It is consistent with the basic concept of DAU as equalizing grant,
i.e. DAU allocation proportional to DBH revenue and Own Source Revenue (PAD) as
benchmarks in assessing the financial capacity of a region. This non holdharmless policy is
consistent with the objective of minizing horizontal fiscal imbalance.
To support the application of DAU formula in APBN 2013, DAU will be focused to (1) fortify
the function of DAU as horizontal financial capacity equailization; (2) improve the accuracy
of database for DAU calculation from the competent ministries/agencies; (3) Basic Allocation
in view of policies on the increase of basic salary, public servant vacancies, and other related
policies on remuneration; (4) DAU proportion of 10 percent for all provinces and 90 percent
for all districts/cities of national DAU; and (5) continue non hold harmless policy.
According to such DAU policy and the target set for domestic revenue in APBN 2013, which
is to amount Rp.1,525.2 trillion, minus revenue sharing (DBH) to regions Rp.102.0 trillion,
Non-Tax Revenue (PNBP) planned to be redistributed to the producing ministries/agencies
Rp.36.9 trillion, tax subsidy Rp.4.8 trillion, and parts (60 percent) of several subsidy portions,
i.e. electricity subsidy, Rp.80.9 trillion, fuel subsidy Rp.193.8 trillion, fertilizer subsidy Rp.16.2
trillion, food subsidy Rp.17.2 trillion and seed subsidy Rp.1.5 trillion so that these miscellaneous
subsidies that can apportioned to net domestic revenue (PDN) total Rp.184.8 trillion, the net
PDN revenue in APBN 2013 is therefore set at Rp.1,196.7 trillion. In view of Law Number 33
of 2004 and with reference to discussion of House of Representatives (DPR) and the
Government during the Discussion Level I/Draft Law on APBN FY 2013, DAU allocation in
2013 is set at 26 percent of Net PDN revenue or Rp.311.1 trillion (3.4 percent of GDP). This
sum, nominally, is Rp.37.3 trillion higher if compared with DAU allocation in APBNP 2012
at Rp.273.8 trillion. Of such DAU allocation, i.e. Rp.311.1 trillion, Rp.31.1 trillion will be
distributed to provinces (10 percent of National DAU) and Rp.280.0 trillion to districts/cities
(90 percent of total National DAU).
5.4.1.1.3
Special Allocation Fund (DAK)
Pursuant to Law Number 33 of 2004, DAK is allocated to finance special activities being the
affairs of regions and in compliance with national priorities in the context of regional
development acceleration and the realization of national goals. DAK allocation to regions
are established based on three criteria, i.e. general criteria, special criteria and technical criteria.
In 2013, the Government will more focus the distribution of DAK proceeds to under-developed
regions in synergic manner with central proceeds (ministries and agencies), while continuting
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the transfer of deconcentration fund and co-administration fund into DAK. The directions
of DAK policies in 2013 are as follows:
a. Assist regions with relatively low financial capacity in financing their public services to
achieve SPM level (minimum service standard) with the provision of physical facilities
and infrastructure for the delivery of basic services to the public and enhance the
effectiveness of regional spending;
b. Strengthen DAK planning with output/outcome based approach as indicated in RPJM;
c.
Improve coordination in Technical Guidelines preparation;
d. Improve the accuracy of technical data and avoid duplication of activities in DAK sectors;
e.
Give more attention to under-developed regions in respective DAK sectors;
f.
Improve performance and quality of DAK management;
g. Encourage the ministries/agencies to transfer deconcentration/co-administration fund
being parts of the ministries/agencies’ budget, which remain to be used to implement
governance affairs under the responsibility of regions to DAK in phases;
h. Improve coordination in DAK management to support the synchronization of DAK
activities with those financed under other sources (APBN and APBD);
i.
Introduce sanctions (disincentive) to regions not reporting DAK activities using the
specified performance reporting system that will be deemed as a factor of technical criteria
for DAK allocation calculation.
DAK policy in 2013 has objectives of: (1) supporting the realization of national priorities set
in RPJMN and RKP 2013; (2) DAK policies in RPJMN 2010-2014, which is outcome oriented;
and (3) supporting the acceleration of regional development; and (4) supporting the provision
of infrastructure and facility for basic public service until minimum service standard (SPM)
level.
In light of foregoing, to support theme of RKP 2013 sectors planned to be financed with DAK
in 2013 are as follows: (1) Education, (2) Health, (3) Road Infrastructure, (4) Irrigation
Infrastructure, (5) Water Supply Infrastructure, (6) Sanitation Infrastructure, (7) Regional
Government Infrastructure, (8) Marine and fishery, (9) Agriculture, (10) Environment, (11)
Family Planning, (12) Forestry, (13) Trade Facility and Infrastructure, (14) Facility and
Infrastructure for Under-Developed Regions, (15) Rural Energy, (16) Housing and Settlement,
(17) Land Transport Safety, (18) Rural Transportation, and (19) Facilities and Infrastructure
for Border Areas.
Consistent with the directions of DAK general policies, the scope of DAK financed activities
for individual sectors is as follows:
1. Education, focused to support the completion of quality and equitable nine-year
compulsory basic education program complying with the specified minimum service
standard (SPM) level. In addition, activities financed under DAK for education sector in
2013 will be also directed to support the implementation of universal secondary education
with the provision of adequate education facilities and infrastructure in terms of quality
and quantity. DAK activities in Education Sector in 2013 will be prioritized to rehabilitate
the damaged class rooms and/or studying rooms of SD/SDLB and SMP/SMPLB, the
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heavily damaged studying rooms of SMA/SMK/SMLB, to develop New Class Rooms
(RKB) and Other Studying Rooms including the associated furniture for SMP/SMPLB,
to develop libraries, laboratories for SMA/SMK/SMLB, and to provide education
equipment. Schools receiving DAK in Education Sectors in 2013 will include SD/SDLB,
SMP/SMPLB and SMA/SMK/SMLB either public or private schools.
The scope of activities will be prioritized to execute: (1) the rehabilitation of moderately
damaged class rooms for SD/SDLB; (2) the rehabilitation of moderately damaged class
rooms for SMP/SMPLB; (3) the development of studying rooms for SMP/SMPLB; (4)
the rehabilitation of the heavily damaged studying room for SMA/SMK/SMLB; (5) the
development of new class rooms for SMP/SMPLB; (6) the development of libraries for
SD/SDLB, SMP/SMPLB and SMA/SMK/SMLB; (7) the development of laboratories for
SMA/SMK/SMLBl (8) the procurement of education equipment for SD/SDLB, SMP/
SMLB and SMA/SMK/SMLB; and (9) the procurement of books/references for SMP/
SMPLB and SMA/SMK/SMLB.
2. Health, focused to improve access to and quality of health services so as to speed up the
realization of MDGs i.e. lower mortality rate of mothers, babies and children, nutrition
enhancement and disease prevention and sanitation notably health services rendered to
low income people and population in under-developed regions, isolated regions, border
areas and islands (DTPK) and other regions suffering health problems (DBK) with the
provision of childbirth assistance and health insurance in basic and referential health
service providers, the improved facilities and infrastructure for basic and referential health
services, including accommodation of class III wards in hospitals, medicine supplies
and management, effective, safe, quality and beneficial health logistic and vaccines for
the preparation of Social Security Organizing Body (BPJS) in 2014.
The scope of activites is: (1) basic health service, i.e. the provision of facilities, infrastructure
and equipment for puskesmas (health centers) and their networks including: (a) the
development of Secondary Puskesmas/Puskemas in DTPK/Patient Caring Puskesmas
and PONED/Puskesmas’ Waste Treatment Plant/Poskesdes/posbindu, (b) the
improvement of Puskesmas into Patient Caring Puskesmas in DTPK, (c) the rehabilitation
of puskesmas, official houses of doctors/dentists/paramedics (couples), (d) the provision
of sanitation facility and infrastructure/UKBM Kit; (2) referential health services, i.e.
the provision/procurement of facilities, infrastructure and equipment for Regional General
Hospitals (RSUDP) with: (a) the procurement of facilities and infrastructure for RS Siap
Ponek, (b) the provision of Class III wards in hospitals, (c) Waste Treatment Plant in
hospital, (d) the procurement of equipment for UTD RS/ BDRS, (e) the procurement of
facilities and infrastructure for ICU and Emergency Unit; (3) pharmautical services,
i.e.: (a) medicine and health logistic provision, (b) new development or rehabilitation,
provision of supporting facilities for District/Municipal Pharmacy Plant, (c) new
development of satellite Pharmacy Plants and the associated facilities.
3. Road Infrastructure, focused to maintain and improve the performance of provincial,
district and municipal road infrastructure and to support domestic connectivity in the
context of regional economic corridor development.
The scope of activities is: (1) periodic maintenance of roads and bridges by province/
district/city, (2) road improvement and development by province/district/city, (3) bridge
replacement and development by province/district/city.
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4. Irrigation Infrastructure, focused to maintain and improve the performance of
irrigation/swamp services by province and distric/city to support the realization of national
priorities in Food Resilience, particularly National Rice Production Improvement toward
10 million ton rice surplus in 2014.
The scope of activities is to rehabilitate irrigation networks by province/district/city that
may be used to improve irrigation networks. To optimize the use of DAK for irrigation,
SID and operation and maintenance activities of irrigation network will be under the
responsibility of Regional Governments as complementary activities.
5. Water Supply Infrastructure, focused to expand the scope of water services to
accelerate the realization of MDGs so as to enhance the quality of public health and
meet minimum service standard (SPM) in water supply sectors in urban and rural areas
including under-developed regions.
The scope of activities is: (1) piped house connection expansion and improvement for
urban low-income people. The target regions are districts/cities with adequate idle capacity
for piped house connection development; (2) master meter installation for urban low
income people notably those living in urban slum areas. The target regions are districts/
cities with adequate idle capacity for piped house connection development; and (3) the
development of rural water supply system (SPAM) with the target regions of villages
having relatively abundant raw water sources.
6. Sanitation Infrastructure, focused to improve the scope and reliability of sanitation
services, especially in wastewater and solid waste treatment in communal/decentralized
manner to enhance the quality of public health and to meet minimum service standard
(SPM) in sanitation service provision for regions deprived from sanitation services
including under-developed regions.
The scope of activities is: (1) wastewater sub-sector: the development and construction
of communal wastewater facility and infrastructure; and (2) solid waste sub-sector: the
development and construction of solid waste management with 3R pattern (reduce, reuse
and recycle) at community level connected with solid waste management system at city
level.
7. Regional Governance Infrastructure, focused to improve the performance of
regional governance in delivering public services. The priority is given to the newly
established regions and under-developed regions to enhance the quality of their public
services.
Scope of activities is: (1) the development/expansion of Regent/Mayor office, (2) the
development/expansion of District/Municipal Secretariat, and (3) the development/
expansion of District/Municipal DPRD office, and (4) the development/expansion of
District/Municipal SKPD office.
8. Marine and Fishery, focused to improve facilities and infrastructure for production,
processing, quality improvement, marketing, supervision, advocacy, statistical data to
support marine and fishery industrialization and fishery town development, and the
provision of facility and infrastructure for marine and fishery development in small islands.
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The scope of activities is that for DAK KP Province to procure fishing boat > 30 GT and
for DAK KP District/City: (1) the development of fishery facilities and infrastructure for
capture fishing, (2) the development of fishery facilities and infrastructure for aquaculture,
(3) the development of facilities and infrastructure for the processing, quality
improvement and marketing of fishery products, (4) the development of basic facilities
and infrastructure in coastal areas and small islands, (5) the development of facilities
and infrastructure for marine and fishery resources supervision, (6) the development of
facilities and infrastructure for fishery advocacy, and (7) the development of facilities for
the provision of marine and fishery statistical data.
9. Agriculture, focused to support the development of water facilities and infrastructure,
land facilities and infrastructure, agriculture development center development and
rehabilitation and community based food center development to increase domestic food
production in order to reinforce national food resilience.
Scope of activities: (1) for province: (1) the development/rehabilitation of PTD/Centers/
Seedlings/Nurseries, (2)the development/rehabilitation of UPTD/Plant Protection, (3)
the development/rehabilitation of Animal Health Laboratories; (b) for district/city: (1)
the development of water facilities and infrastructure, (2) the development of land facilities
and infrastructure, (3) the development/rehabilitation of agriculture development center
at kecamatan (sub-district) level; and (4) the development of community based food
centers.
10. Environment, focused to assist district/city in financing activities for the realization of
minimum service standard in environmental sector under the responsibility of regions,
and to prevent climate change, (2) to support the acceleration of environmental problem
management in regions, (3) to strengthen the institutional capacity in environmental
management, (4) to encourage commitment of regional officials in improving and/or
maintaining the quality of environment, (5) to encourage the leaders of environmental
establishments in regions to develop the capacity and performance of their institutions,
(6) to advocate the development of output and outcome environmental management
orientation as an attempt to deal with environmental problems, (7) to realize major
performance indicators (IKU) for District/City, Province and Ministry of Environment,
and (8) encourage the roles of Ecoregion Management Center (PPE) and province in the
development and supervision of DAK implementation in environment sector in district/
city level to improve DAK performance in environment sector.
The scope of activities is: (1) environmental monitoring and supervision with: the
procurement of laboratory equipment (for laboratory in operation) and operational
vehicles, (2) environmental pollution control equipment with: the development of SME
WWTP, Medical WWTP, Communal WWTP and 3R (reduce, reuse and recycle) solid
waste treatment unit in public facilities, (3) climate change prevention with: the
development of green parks and biogas plants and (4) environmental function protection
with: infiltration wells/biopori, weed control, landslide prevention/embankmen, shallow
wells and tree planting.
11. Family Planning, focused to support access, quality and equality improvement of family
planning services with: (a) improving the outreach and quality of counseling, movement,
development of Family Planning program in the field, (b) developing facilities and
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infrastructure of Family Planning services, (c) improving advocacy service,
communication, information and education facilities in Family Planning program, (d)
improving facilities for child growth; and (e) improving IT based data and information
reporting and processing.
The scope of activities is: (1) the provision of working facilities and mobility and IT based
data and information infrastructure for field agents, (2) Family Planning services in
Family Planning clinics (static) and mobile Family Planning Services and the development
of contraception aids/medicine, (3) the provision of facilities and infrastructure of mobile
family planning advocacy, public address and KIE kit, (4) the provision of BKB kits
(Under-Five Year Old Babies Development), (5) the development/renovation of Family
Planning Center at sub-district level.
12. Forestry, focused to enhance the functions of watershed (DAS) especially in upstream
to maintain and improve the regional supporting capacity and to support the commitment
of President in the green house emission reduction by 26% with internal support and
41% with international support by 2020 as prescribed in Presidential Regulation Number
61 of 2011 concerning Green House Emission Reduction Action Plan (RAN-GRK). In
addition, DAK in Forestry Sector will be focused to improve forestry management with
the formation, operationalization and strengthening of KPHP and KPHL under the
responsibility of districts/cities.
The scope of activities is: (1) rehabilitation of protected forests and critical lands outside
forest areas (including people forests, environment reforestation, path stakes), mangrove
areas, coastal forests, People Forest Park (Tahura) and City Forest, (2) the management
of People Forest Park (Tahura) and City Forest including forest security, (3) the
maintenance of plants rehabilitated in previous years, (4) the development and
maintenance of technical civil structure (land and water conservation building/KTA)
covering retaining dams, control dam, gully plug, infiltration wells, shallow wells, and
other land and water conservation structure, (5) forest security facilities and infrastructure,
(6) forest advocacy facility and infrastructure improvement; and (7) the provision of
facility for the operation of Indonesian Forest (KPH).
13. Trade Facilities and Infrastructure, focused to enhance the quality and quantity of
trade facilities to support: (1) goods supplies and availabilities (specially basic staples) so
as to increase the purchasing power of people, especially those living in under-developed
regions, border areas, newly established regions, and/or regions with minimum trade
facilities, and (2) the sound calibration for customer protection with regard to assurance
of accurate measurement especially in regions with relatively high UTTP potentials but
not yet appropriately managed.
The scope of activities is: (1) the development and expansion of trade distribution facilities
(markets), (2) the development and improvement of legal metrology facility with the
construction of Legal Metrology Laboratory and the procurement of calibration
equipment (e.g. standard equipment, four-wheel calibration unit, four-wheel supervision
functional unit and motorcycle mobility units); and (3) the development of agriculture
commodities for warehouse receipt system.
14. Facilities and Infrastructure for Under-Developed Regions, focused to support
policies on the development of under-developed regions as mandated in RPJMN 2010 –
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2014 and RKP 2013, i.e. local economic development in under-developed regions with
capacity building, specialty commodity based productivity and industrialization in
sustainable manner including the supporting facilities and infrastructure that will enable
the said backward regions to grow and develop in faster manner to catch up other regions,
which are relatively more developed.
The scope of activities is: (1) the provision of land and water public transport facilities to
support local economic development, (2) the development/rehabilitation of small jetties,
(3) shallow wells (embung) in regions suffering water scarcity.
15. Village Energy, focused for energy diversity: use local renewable energy sources to
improve the access of villages including the residents of under-developed regions and
border areas, to modern energy.
The scope of activities is: (1) the development of new PLTMH (Mini-Hydro Power Plant),
(2) rehabilitation of damaged PLTMH, (3) expansion/improvement of power service
from PLTMH, (4) Centralized Solar Power Plant (PLTS) and Distributed Solar Power
Plant (SHS); and (5) biogas plant development.
16. Housing and settlement, focused to improve facilities, infrastructure and utility (PSU)
of housing and settlement sector to stimulate housing and settlement development for
medium and low income people (MBM/R) in districts/cities including under-developed
regions, water scarcity and poor sanitation suffering regions.
Scope of activities is to assist the regions in financing their physical housing and settlement
infrastructure to reach minimum service standard (SPM) including: (1) the provision of
piped water connection, (2) communal wastewater treatment plant, (3) integrated solid
waste management site (TPST), (4) power distribution networks, (5) public street lighting.
17. Land Transportation Safety, focused to enhance the quality of services especially
the safety of land transport users in provinces, districts/cities to reduce fatalities (death
toll) of traffic accidents at 20% in phases by end of 2014 and injured victims at 50% by
end of 2014.
The scope of activities is: (1) provision and installation of land transportation safety
facilities; and (2) procurement and installation of motor vehicle testing equipment.
18. Rural Transportation, focused to: (1) improve mobility services to people and other
resources that can promote economic growth in rural areas, and expected capable of
eradicating the isolation and providing stimulant toward further development in all sectors
in villages, (2) develop rural facilities and infrastructure with strategic values and
prioritized to support growth centers in fast-growing and strategic areas in agriculture,
fishery, tourism, industry, energy and mineral resources, forestry and trade sectors.
The scope of activities is: (1) the development, improvement and maintainance of village
corridors; (2) procurement of rural transport facilities.
19. Facilities and Infrastructure of Border Areas, focused to support the development
of border areas as prescribed in RKP 2013, i.e. to deal with the isolation of regions that
may impede the security in regional borders, basic social service and the development of
local economy in sub-districts (kecamatan) in sustainable manner as prioritized in
Decision of Head of National Border Area Management Agency Number 2 of 2011
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Financial Note and Indonesian Budget 2013
Fiscal Decentralization Policy
Chapter 5
concerning Master Plan for State Boundaries and Border Areas.
The scope of activities is: (1) the development/improvement of pavement conditions of
non-status links connecting priority border sub-districts with the surrounding growth
centers, (2) the development and rehabilitation of jetties to support passenger and cargo
transport especially in coastal areas not yet managed by the Ministry of Transportation;
and (3) the provision of water/interisland transport mode to intensify passenger, cargo
and service flows.
According to Law Number 33 of 2004 and in view of policy directions, the activities of each
scope in DAK is planned to receive budget allocation Rp.31.7 trillion (0.3 of GDP) in APBN
2013. This ceiling of DAK allocation includes additional DAK Rp.2.0 trillion for distribution
to 183 under-developed regions to finance their DAK activities in Road Infrastructure Rp.1.0
trillion and Education Infrastructure Rp.1.0 trillion and the transfer of deconcentration and
co-administration fund from the Ministry of Agriculture into DAK in amount of Rp.417.1
billion. If compare with DAK allocation in APBNP 2012 Rp.26.1 trillion, this ceiling of DAK
allocation in APBN 2013 is to rise by 21.4 percent.
Policy direction and scope of additional DAK for Education and Road sectors are as follows:
a. The calculation of Additional DAK Allocation:
• Regions eligible for Additional DAK must be categorized in under-developed regions as
prescribed in Presidential Regulation Number 5 of 2010 concerning Medium-Term
National Development Plan (RPJMN) 2010 - 2014.
• The sum of additional DAK allocation for each benefiary region will be calculated using
index calculation based on general criteria, specific criteria and technical criteria.
b. Technical indicators of Additional DAK are as follows:
• For education infrastructure sector the combination of four technical indicators applied
in DAK for Education Sector will be considered.
• For road infrastructure sector, technical indicators of DAK for road infrastructure will
be adopted.
c.
Counterpart fund for additional DAK will be set based on financial capacity of region,
which is under-developed according to the following criteria:
• Very low financial capacity, the corresponding region must provide counterpart fund
minimum 0%.
• Low financial capacity, the corresponding region must provide counterpart fund
minimum 1%.
• Medium financial capacity, the corresponding region must provide counterpart fund
minimum 2%.
• High financial capacity, the corresponding region must provide counterpart fund
minimum 3%.
Financial Note and Indonesia Budget 2013
5-39
Chapter
Fiscal Decentralization Policy
5
5.4.1.2
Special Autonomy and Adjustment Fund
5.4.1.2.1
Special Autonomy Fund
Special Autonomy Fund is a mandate of Law Number 35 of 2008 concerning the Enactment
of Perpu Number 1 of 2008 concerning the Amendment to Law Number 21 of 2001 in
Special Autonomy for Papua Province into Law. In APBN 2002 to 2012 Special Autonomy
Fund in amount equivalent to 2 percent of national DAU has been allocated for Papua Province
and West Papua Province. The proceeds of this Special Autonomy Fund are particularly used
in education and health sectors. Special Autonomy Fund is also mandated in Law Number
11 of 2006 concerning Aceh Government in amount of equivalent to 2 percent of national
DAU, which will be used to mainly develop and maintain infrastructure, people economic
empowerment, poverty alleviation, and education, social and health sectors.
In addition, for the implementation of special autonomy in Papua Province and West Papua
it is also allocated additional fund for infrastructure in amount as mutually agreed by the
Government and House of Representatives (DPR), for particularly infrastructure development.
In this respect, allocation of Special Autonomy Fund in APBN 2013 is planned to reach
Rp.13.4 trillion (0.1 percent of GDP). This Special Automony Fund allocation ceiling implies
an increase of Rp.1.5 trillion (12.5 percent) if compared with its allocation in APBNP 2012 at
Rp.12.0 trillion. The allocation of Special Autonomy Fund at Rp.13.4 trillion consists of:
a. Special Autonomy Fund for Papua Rp.6.2 trillion. According to Law Number 35 of 2008,
this Special Autonomy Fund for Papua will be distributed to Papua Province Rp.4.3
trillion and West Papua Province Rp.1.9 trillion.
b. Special Autonomy Fund for Aceh Province Rp.6.2 trillion.
c.
Additional Special Autonomy Fund for Infrastructure for Papua and West Papua Rp.1.0
trillion. Pursuant to Law Number 35 of 2008, this Additional Special Autonomy Fund
for Infrastructure for Papua and West Papua will be distributed respectively Rp.571.4
billion and Rp.428.6 billion.
To accelerate the development of Papua Province and West Papua Provinve, the Government
sets up unit tasked to coordinate and oversee the use of budget that has been granted including
Special Autonomy Fund to assure their sound performance.
5.4.1.2.2 Adjusment Fund
Aside from Special Autonomy Fund, APBN 2013 also allocates Adjustment Fund aiming to
support certain programs/activities launched by the Government, which subject to laws and
regulations such programs/activities have been delegated as regional affairs. In APBN 2013
this Adjustment Fund consists of Profession Allowance for PNSD Teachers, School Operation
Aids (BOS), Additional Fund for PNSD Teachers’ Salaries, and Regional Government Projects
and Decentralization (P2D2). The ceiling of Adjustment Fund allocation in 2013 is planned
to amount Rp.70.4 trillion (0.8 percent of GDP) or to increase by Rp.11.9 trillion (20.4 percent)
from its allocation in APBNP 2012 at Rp.58.5 trillion.
5.4.1.2.2.1
Profession Allowance for the Teachers
This profession allowance for teachers is provided for teachers being public servants in regions
(PNSD) who have gained certificates as educators and complied with requirements as
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Financial Note and Indonesian Budget 2013
Fiscal Decentralization Policy
Chapter 5
established in laws and regulations in amount of 1 (one) monthly basic salary of the teachers
concerned. In APBN 2013, profession allowance for PNSD teachers is planned to reach Rp.43.1
trillion or Rp.12.5 trillion (40 percent) higher than its allocation in APBNP 2012 set at Rp.30.6
trillion.
5.4.1.2.2.2
Additional Salary for PNSD Teachers
Additional Salary for Teachers being Public Servants in Regions (PNSD) will be granted to
teachers who not receive profession allowance for PNSD teachers in amount of Rp.250,000.00
per month and paid for 12 months in a year. In APBN 2013, this Additional Salary for PNSD
Teachers is allocated at Rp.2.4 trillion or to drop by Rp.486.9 billion (16.8 percent) if compared
with allocation for Additional Salary Fund for PNSD Teachers in 2012 set at Rp.2.9 trillion.
5.4.1.2.2.3
School Operation Aids (BOS)
To implement 9-year compulsory basic education program as stipulated in Law Number 20
of 2003 concerning National Education System, the Government allocates School Operation
Aids (BOS) aiming to abate the burden of people in tuition fees for the financing of their
basic education. In 2013, BOS will be allocated as adjustment fund since basic education
provision constitutes a regional affair that must be dealt with by the local government as
prescribed in Government Regulation Number 38 of 2007 concerning The Allocation of
Governance Affairs. BOS proceeds are funnelled from State Cast account to general cash
account of provinces for further distribution to schools under grant mechanism.
BOS is fund primarily used to finance non-personnel spending in basic education in the
context of compulsory education program, and may be used for the financing of other activities
as indicated in technical directives of the Minister of Education and Culture. BOS allocation
has objective of freeing students of low-income households, who can’t afford to pay their
tuition fees and relieving other students from this tuition fee burden so that they can access
to more quality education service under 9-year compulsory basic education program. BOS
aid is stimulus for regions and not the subsitute of obligations of the local government in the
allocation of education budget. Given that, the provision of BOS aids will be followed with
monitoring and evaluation to prevent any irregularity that may arise and at the same time
ensure that the regions will not reduce their budget allocation for local BOS aids (BOSDA).
BOS will be managed by a Central Team, Provincial Team, and District/Municipal Team
that will coordinate regularly to assure the well-advanced BOS implementation ranging
from planning, budgeting, allocation, funnelling, reporting, monitoring to evaluation and to
minimize problems. BOS allocation in APBN 2013 is planned to amount Rp.23.4 trillion or
to drop by Rp.147.9 billion (0.6 percent) from its allocation in APBNP 2012 at Rp.23.6 trillion.
5.4.1.2.2.4
Regional Incentive Fund (DID)
Regional Incentive Fund (DID) particularly aims to support the implementation of education
function subject to certain criteria. In 2012, DID is allocated to amount Rp.1.4 trillion for
Provinces, Districts and Cities in running their education function in view of the performance
of regions in complying with main criteria, performance criteria and minimum passing grade.
The main criteria include Regional Financial Statements (LKPD) that must receive minimum
WDP (unqualified opinion with explanatory note). Performance criteria cover financial
performance, education performance and economic and welfare performance. In APBN
2013, DID allocation is planned to reach Rp.1.4 trillion or equal to its ceiling in APBNP 2012.
Financial Note and Indonesia Budget 2013
5-41
Chapter
Fiscal Decentralization Policy
5
5.4.1.2.2.5
Regional Government Projects and Decentralization
Regional Government Project and Decentralization (P2D2) is part of Government’s program
loan scheme from World Bank to fortify transparency and accountability of DAK
implementation, especially in infrastructure sector with DAK implementation monitoring
and evaluation system reform. The main objective of P2D2 is to enhance the accountability
and reporting of the Government in DAK implementation notably for infrastructure sector
in pilot regions. This objective will be pursued with:
a. Budget support from APBN;
b. Monitoring, reporting improvement and DAK output verification strengthening in
infrastructure sector;
c.
DAK verification mechanism; and
d. Institutional capacity building for DAK implementation in regions.
P2D2 implementation is expected capable of generating impacts to regions including:
a. DAK accountability and reporting in infrastructure sector improved;
b. Financial and technical reporting and output verification improved; and
c.
The percentage of physical output of verified infrastructure increased.
Pilot regions for P2D2 implementation are distributed in 5 provinces and 75 regional
governments as follows:
1.
Jambi Province (1 province, 6 districts, 2 cities);
2. East Java Province (1 province, 28 districts, 8 cities);
3. Central Kalimantan Province (1 province, 12 districts, 1 city);
4. West Sulawesi Province (1 province, 5 districts);
5. North Maluku Province (1 province, 6 districts, 2 cities).
During P2D2 preparation stage since 2009, the Government and World Bank have discussed
issues relating to the selection of pilot regions as participants in P2D2 program. As a
preliminary step, it was agreed to select 5 (five) provinces in view of the following criteria:
(1) geographical diversities, i.e. to represent western, central and eastern parts of Indonesia;
(2) DAK reporting performance during previous years; (3) capacity in absorbing DAK
allocation; and (4) success rate in producing output financed under DAK. Thereafter, for the
selection of eligible provinces/districts/cities, the criteria are: (1) regions receiving DAK during
the years of P2D2 implementation; and (2) regions submitting express of interest to participate
(commitment letter).
To realize the objectives of P2D2, programs will be carried out under 3 (three) funding
components, i.e.: (1) DAK Reimbursement and Incentive for Regional Government from
World Bank; (2) Institutional Capacity Building for the Government and Regions; and (3)
output verification. The last two components will be financed with rupiah. DAK
reimbursement is reimbursement scheme to the Government for DAK proceeds channeled
to infrastructure projects in provinces/districts/cities according to the specified requirements.
Approach taken in this financing is that of Output-Based Disbursement (OBD). Under this
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Financial Note and Indonesian Budget 2013
Fiscal Decentralization Policy
Chapter 5
approach, World Bank will pay part of DAK for infrastructure development (roads, irrigation
and water supply) based on reports and physical output verification of pilot provinces/districts/
cities in the form of loan disbursement. Apart from DAK reimbursement to the Government,
the pilot regional governments will receive incentive/reward of fund in amount of 10 percent
of total output value of DAK in infrastructure complying with the established output quality
standards, which are timely executed and submitting DAK report to the Government. If in
APBNP 2012, the allocation of P2D2 is to reach Rp.30.0 billion, in APBN 213 the Government
proposes P2D2 allocation at Rp.81.4 billion derived from 10 percent of total DAK allocation
for infrastructure in 2012 for P2D2 pilot regions.
Breakdowns of Transfer to Regions allocation in 2013 can be seen in Table 5.14.
5.4.2 Grant to Regions Policy
As from its effective introduction in 2009, the regional grant has become alternative funding
for infrastructure development by regional governments either from SLA or foreign grants
from the Government. The proceeds are used to finance governance affairs under the
responsibilities of regional governments and prioritized to provide public services.
Grant allocation to region policy in 2013 is directed to develop the capacity of regions in
providing basic public services in transportation sector, water supply development, wastewater
management, sanitation, irrigation, and geothermal exploration. An example implementation
of grant allocation policy in the provision of public services is the grant of the Government
for Mass Rapid Transit (MRT) program in DKI Jakarta province. This program gets funding
support from Japan International Cooperation Agency (JICA). Cost sharing of this loan is
42 percent to the Government and the other 58 percent to JICA loan as SLA to DKI Jakarta
government. Physical construction of MRT program consists of 3 stages, with stage I to be
started in 2012.
Consistent with such grant to region policy, APBN 2013 has earmarked budget allocation for
grant to regions in amount of Rp.3.6 trillion. This allocation consists of: (1) MRT grant
Rp.3.1 trillion, (2) WISMP-2 Grant Rp.166.9 billion, (3) Water Supply Grant Rp.234.1 billion,
(4) Wastewater Management Grant Rp.9.4 billion, (5) Development of Seulawah Agam
Geothermal Grant in NAD province Rp.93.6 billion.
Financial Note and Indonesia Budget 2013
5-43
Chapter
Fiscal Decentralization Policy
5
TABLE 5.14
TRANSFER TO REGIONS, 2012 - 2013
(billion rupiah)
2012
APBNP
I. FISCAL BALANCE
% thd
PDB
2013
APBN
% thd
PDB
408.352,1
4,8
444.798,8
108.421,7
1,3
101.962,4
1,1
1. Tax
a. Income Tax
i. article 21
ii. article 25/29 personal
b. Land and Building Tax (PBB)
i DBH PBB
ii. Underpayment of DBH PBB FY 2009
iii. Underpayment of DBH PBB FY 2010 to 2011
c. BPHTB
i. Underpayment DBH BPHTB
d. Excise for Tobacco Products (CHT)
i. CHT
ii. Underpayment of CHT
51.675,8
21.641,3
17.839,0
1.123,2
28.149,8
28.100,9
49,0
238,8
238,8
49.951,7
22.106,9
20.738,3
1.368,7
25.992,8
25.769,7
223,1
-
1.645,9
1.597,2
48,7
0,6
0,3
0,2
0,0
0,3
0,3
0,0
0,0
0,0
0,0
0,0
0,0
1.852,0
1.760,4
91,6
0,5
0,2
0,2
0,0
0,3
0,3
0,0
0,0
0,0
0,0
2. Natural Resources
a. Oil and Gas
i. Oil
ii. Gas
iii. Underpayment of Oil and Gas
b. General Mining
i. Land Rent
ii. Royalty
iii. Underpayment of DBH General Mining for FY 2007 - 2009
c. Forestry
i. Forest Resources Provision
ii. Forest Resources Exploitation Permit Fee (IIHPH)
iii. Reforestation Fund
iv. Underpayment of SDA (Natural Resources) Forestry
d. Fishery
i DBH Fishery
ii Underpayment of Fishery FY 2009
e. Geothermal (PPB)
i. DBH PPB
ii. Underpayment of DBH 2007 - 2009
56.745,9
41.695,8
23.381,3
14.476,5
3.838,0
12.919,3
562,2
11.657,1
700,0
1.700,7
1.043,9
30,5
601,8
24,5
126,5
120,0
6,5
303,6
279,0
24,6
0,7
0,5
0,3
0,2
0,0
0,2
0,0
0,1
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
52.010,6
35.197,2
18.742,3
16.454,9
14.079,2
583,7
13.495,5
2.267,4
1.517,8
10,0
739,6
144,0
144,0
322,8
322,8
-
0,6
0,4
0,2
0,2
0,2
0,0
0,1
0,0
0,0
0,0
0,0
0,0
0,0
0,0
0,0
-
273.814,4
3,2
311.139,3
3,4
26.115,9
0,3
31.697,1
0,3
A. REVENUE SHARING (DBH)
B. GENERAL ALLOCATION FUND (DAU)
C. SPECIAL ALLOCATION FUND (DAK)
II. SPECIAL AUTONOMY AND ADJUSTMENT FUND
4,8
70.423,9
0,8
83.831,5
0,9
A. SPECIAL AUTONOMY FUND
1. Special Autonomy Fund
a. Special Autonomy Fund for Papua and West Papua
- Papua Province
- West Papua Province
b. Special Autonomy Fund for Aceh
2. Additional special autonomy fund for infrastructure for Papua and West Papua
a. Papua
b. West Papua
11.952,6
10.952,6
5.476,3
3.833,4
1.642,9
5.476,3
1.000,0
571,4
428,6
0,1
0,1
0,1
0,0
0,0
0,1
0,0
0,0
0,0
13.445,6
12.445,6
6.222,8
4.356,0
1.866,8
6.222,8
1.000,0
571,4
428,6
0,1
0,1
0,1
0,0
0,0
0,1
0,0
0,0
0,0
B. ADJUSTMENT FUND
1. Teacher Profession Allowance
2. School Operation Aids (BOS)
3. Additional Fund for PNSD Techer Incomes
4. Regional Incentive Fund
5. Regional Government and Decentralization Fund (P2D2)
58.471,3
30.559,8
23.594,8
2.898,9
1.387,8
30,0
0,7
0,4
0,3
0,0
0,0
0,0
70.385,9
43.057,8
23.446,9
2.412,0
1.387,8
81,4
0,8
0,5
0,3
0,0
0,0
0,0
478.775,9
5,6
528.630,2
5,7
TOTAL
Source: the Ministry of Finance (data processed)
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Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
CHAPTER 6
BUDGET DEFICIT FINANCING AND FISCAL RISK
6.1 General
Deficit and budget financing are the components of State Budget (APBN), which their
conditions are inseparable from the trends of external factors. After global financial crisis,
which reached its peak in 2008, the economic foundations of Indonesia record upward
progress. This is evident from the relatively high economic growth, controllable inflation
rate, better sovereign credit rating, more foreign exchange reserve, and soundly-controlled
rupiah exchange rate.
While the debt crisis in Euro zone is not yet satisfactory dealt with in 2011 and 2012, the
global economic condition in 2013 is anticipated rosier. Nevertheless it is also expected that
in 2013 some developed countries will require more funds to recover their economy, to support
the liquidities and to set interest rate.
To reinforce and provide fiscal stimulus for the national economy and to abate the impacts
of debt crisis in Euro zone, fiscal policies taken by the Government in 2013 will be directed
toward expansive fiscal policy with target budget deficit set at 1.65 percent of GDP. This
target can be realized under macroeconomic conditions with basic assumptions of 3-month
SPN yield 5.0 percent, rupiah exchange rate to US dollar Rp9.300 and economic growth 6.8
percent.
To meet financing requirements of APBN 2013 deficit, the Government will capitalize on
loan and non-loan sources. However, in view of minimum capacity of non-loan financing
sources, the financing sources of loans remain dominant in covering budget deficit of APBN
2013. Non-loan financing sources come from Budget Surplus (SAL), the payment of SLA
installments, and asset management proceeds (HPA). As to financing sources from loans,
they include Government Bonds (SBN), foreign loans and domestic loans.
Budget deficit financing with loans in APBN 2013 will be carried out in measurable manner
using both foreign and domestic loans as financing sources subject to the Government’s
financing capacity, and potential liabilities and risks to be borne. In the implementation, the
Government will prioritize and optimize budget deficit financing from domestic loans because
of their relatively lower risks than those of foreign loans. In addition, maximizing domestic
financing sources will give opportunity to the Government in developing domestic financial
markets and augment the multiplier effects of national economy.
Financial Note and Indonesian Budget 2013
6-1
Chapter 6
Budget Deficit Financing and Fiscal Risk
6.2 Budget Deficit and Financing Trend from 2007 – 2012
6.2.1 Budget Deficit
During 2007 – 2012 the Government subject to consent of House of Representatives (DPR)
has set deficit budget policy to give stimulus and promote domestic economic growth with a
series of Government’s programs and activities. The deficit of APBN is set in view of various
aspects, inclusive of priority activities that must be financed in the year concerned, budget
financing capacity, economic conditions and financial markets, and laws and regulations in
force.
The trend of budget deficit realization in 2077-2012 as presented in Graph 6.1 is always
lower the deficit set in APBNP. Some contributing factors of this phenomenon are:
1. The realization of Government revenue and grant outnumbers the specified target. It is
the impact of optimizing Government revenue sources and macroeconomic progress
augmenting the sources of Government revenue.
2. The realization of Government expenditure is lower than budget allocation, particularly
as a result of expenditure efficiency taken by the Government, notably operational
spending or non-investments, and lower budget absorption by K/L (Ministries/Agencies)
including those financed under foreign loans.
GRAPH 6.1
BUDGET DEFICIT TREND, 2007-2012
2007
2008
2009
2010
2011
2012*
0,0
0,0
(4,1)
0,1
(40,0)
(80,0)
(120,0)
(58,3)
1,3
1,1
0,7
1,5
0,5
(46,8)
(49,8)
(94,5)
(129,8)
(160,0)
1,0
(84,4)
(88,6)
1,6
1,5
(133,7)
2,0
(150,8)
2,1
(200,0)
2,2
2,1
2,1
(190,1)
2,4
(240,0)
2,5
3,0
APBNP De ficit
LKPP De ficit
% APBNP De ficit
% LKPP De ficit (RHS)
*APBNP
Source: the Ministry of Finance
6.2.2 Budget Financing
Financing requirements in nominal and ratio to GDP terms records steady increase, i.e.
from Rp42.5 trillion or 1.1 percent of GDP in 2007 to Rp190.1 trillion or 2.23 percent of GDP
in APBNP 2012. During this period, the financing requirements from loan sources are to
reach 81.0 percent of total financing needs on the average. In general, this loan based
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Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
financing uses two instruments, i.e., SBN (Government Bonds) and loans of both domestic
and foreign. Illustration of budget financing trend is presented in Graph 6.2.
GRAPH 6.2
BUDGET FINANCING TREND, 2007 - 2012
(trillion rupiah)
190,1
200
159,6
160
120
99,5
85,9
80
91,6
91,1
84,1
130,9
119,9
112,6
57,2
42,5
40
-
28,7
16,6
-
11,9
-
33,9
28,3
0,4 4,6
0,6
1,0
0
-40
(26,5)
2007
(15,5)
(18,4)
2008
2009
(4,6)
(17,8)
2010
2011
SBN (neto)
Foreign Loan (Net)
Non-Loan
Budget Financing
(4,4)
2012*
Domestic Loan (Net)
*APBNP
Apart from financing the deficit, the financing components also cover financing expenditure
components, either in components under non-loan financing or loan financing. Expenditure
components of non-loan financing consist of the Government’s investment fund and PMN,
national education development fund and security obligations. Expenditure of non-loan
financing in nominal terms shows steady increase from year to year. In 2007 this spending
recorded Rp4.7 trillion and in 2012 it hikes to Rp23.0 trillion. Meanwhile loan financing
expenditure components includes principal installments of foreign loans, which are relatively
enormous, i.e. Rp57.9 trillion in 2007 and Rp49.7 trillion in APBNP 2012.
In 2007 to 2011, the realization of budget financing is a little bit lower than the target. In
percentage wise, the ratio of realization to target of budget financing in 2007 to 2011 is
respectively 72.8 percent, 89.0 percent, 86.7 percent, 68.8 percent and 86.8 percent. In terms
of instrument, non-loan financing is closer to the targets than that of loan financing. It is
consistent with policy of optimizing the use of budget to meet financing needs from nonloan soources. Loan financing realization will be adjusted to budget financing needs with,
among other things, reduction of SBN issuance. The latter is evident from lower SBN issuance,
which was in 2008 recorded Rp31.9 trillion, and then respectively 2010 Rp16.1 trillion and in
2011 Rp6.8 trillion.
In 2012 APBNP discussion has been accelerated to accomodate the changing basic
macroeconomic assumptions in line with the soaring crude oil price in global markets. In
the said APBNP, budget financing requirements are set at Rp190.1 trillion. Such financing
will come from non-loan and loan sources by Rp33.9 trillion and Rp156.2 trillion respectively.
Financial Note and Indonesian Budget 2013
6-3
Chapter 6
Budget Deficit Financing and Fiscal Risk
If the financing realization exceeds the specified requirements, there will be Unused Budget
(SilPA), in contrast if the financing realization is lower than the financing requirements,
Budget Use Shorfall (SiKPA) will happen. Illustration on the trend of budget deficit and
financing is presented in Table 6.1.
TABLE 6.1
BUDGET DEFICIT AND FINANCING TREND, 2007 - 2012
(in trillion rupiah)
2007
2008
2009
APBNP
LKPP
APBNP
LKPP
A. GOVERNMENT REVENUE
694.1
707.8
895.0
981.6
B. GOVERNMENT EXPENDITURE
752.4
757.6
989.5
985.7
C. BUDGET SURPLUS/DECIFIT (A - B0
(58.3)
(49.8)
(94.5)
(1.5)
(1.3)
(2.1)
42.5
94.5
84.1
129.8
% Surplus/Deficit to GDP
D. BUDGENT FINANCING (I + II)
58.3
(4.1)
0.1
APBNP
2010
2011
2012
LKPP
APBNP
LKPP
APBNP
LKPP
APBN
871.0
848.8
992.4
995.3
1,169.9
1,210.6
1,311.4
1,358.2
1,000.8
937.4
1,126.1
1,042.1
1,320.8
1,295.0
1,435.4
1,548.3
(129.8)
(88.6)
(133.7)
(46.8)
(150.8)
(84.4)
(124.0)
(2.4)
(1.6)
(2.1)
(0.7)
(2.1)
(1.1)
(1.5)
112.6
133.7
91.6
150.8
130.9
I. Non-Loan
12.3
11.9
(10.2)
16.6
43.3
28.7
25.4
4.6
25.5
28.3
II. Loan
46.0
30.6
104.7
67.5
86.5
83.9
108.3
86.9
125.3
102.7
FINANCING EXCESS/SHORTFALL
-
(7.4)
-
-
80.0
24.0
-
-
44.7
APBNP
(190.1)
(2.2)
124.0
190.1
(9.5)
33.9
133.6
156.2
-
46.5
-
Source: The Ministry of Finance
6.2.2.1 Non-Loan Financing
Needs of budget financing from non-loan sources in APBN are covered from various sources
with different types and proportions every year. These varying financing sources and types
are subject to the availability of the said financing sources and fund allocation capacity as
well as outcomes and profits gained. Budget financing from non-loan sources consists of
domestic banking and non-banking sources. The trend of non-loan financing is presented in
Table 6.2.
TABLE 6.2
NON-LOAN BASED FINANCING TREND, 2007 - 2012
(trillion rupiah)
Realization
Description
2007
A. Domestic Banks
1. Installment of SLA
2. Budget Surplus Balance
3. Forest Development Account
4. Other Government Accounts
5. Ex. NAD, Nias and North Sumatra Moratorium
11.1
4.0
0.3
0.0
0.5
6.3
B. Domestic Non-Banks
1. Privatization (net)
2. Asset Management Proceeds)
3. Government Investment Fund and PMN
a. Government Investment
i. Government Investment Center (Regular)
ii. Government Investment Credit Financing
iii. PT Inalum Takeover
b. State Capital Participation (PMN)
c. Revolving Fund
4. National Education Development Fund
5. Guarantee Obligations
6. Loans to PT PLN
0.7
3.0
2.4
(4.7)
(2.0)
0.0
0.0
0.0
(2.7)
0.0
0.0
0.0
0.0
Total
11.9
2008
16.2
0.3
0.0
0.0
15.9
0.0
0.4
0.1
2.8
(2.5)
0.0
0.0
0.0
0.0
(2.5)
0.0
0.0
0.0
0.0
16.6
2009
2010
2011
APBNP
2012
41.1
3.7
51.9
0.6
(15.1)
0.0
22.2
4.8
17.3
0.0
0.0
0.0
48.9
8.6
40.3
0.0
0.0
0.0
60.6
4.4
56.2
0.0
0.0
0.0
(12.4)
0.0
0.7
(13.1)
(0.5)
0.0
0.0
0.0
(11.7)
(0.9)
0.0
0.0
0.0
(17.6)
2.1
1.1
(12.3)
(3.6)
0.0
0.0
0.0
(6.0)
(2.7)
(1.0)
0.0
(7.5)
(20.7)
0.4
1.2
(19.6)
(1.6)
(1.0)
(0.6)
0.0
(9.3)
(8.8)
(2.6)
0.0
0.0
(26.6)
0.0
0.3
(19.3)
(3.3)
(1.3)
0.0
(2.0)
(8.9)
(7.0)
(7.0)
(0.6)
0.0
28.7
4.6
28.3
33.9
Source: The Ministry of Finance
6-4
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
6.2.2.1.1 Domestic Banks
Non-loan financing from domestic banks is collected from the installments of SLA, Forest
Development Account (RPH), Budget Surplus (SAL) and other Government’s accounts. The
uses of non-loan financing from domestic banks is dependent on the accumulated cash
money/balance in the Government’s accounts and policies on the preference of financing
sources that will be decided based on the availability of financing sources and expenses to get
such financing sources.
Non-loan financing from domestic banks to cover APBN deficit from 2007 – 2012 is
fluctuating from year to year according to the amounts of Budget Surplus (SAL) used.
The realization of budget deficit financing from domestic banks in 2007 amounted Rp11.1
trillion, which covered 94.0 percent of total non-loan financing. In 2011, the realization of
non-loan financing from domestic banks recorded Rp48.9 trillion, which mostly came from
SAL (Budget Surplus) Rp40.3 trillion.
In APBNP 2012, non-loan
GRAPH 6.3
financing of domestic
DOMESTIC BANKING FINANCING TREND , 2007 - 2012
banks is allocated to reach
(trililon rupiah)
Rp60.6 trillion. This target
70,0
is mainly from SAL, which
60,6
is expected to reach Rp56.2
60,0
48,9
trillion. The use of SAL is
50,0
41,1
because of: (1)limited
40,0
financing sources from
30,0
loans due to the relatively
22,2
high targets of SBN
16,2
20,0
11,1
issuance and expenses that
10,0
must be spent by the
0,0
Government [for such
2007
2008
2009
2010
2011
2012*
bond issuance]; and (2)
relatively
immense *APBNP 2012
amounts of SAL proceeds.. Source: the Ministry of Finance
The trend of financing
coming from domestic banks in 2007-2012 is presented in Graph 6.3.
6.2.2.1.2 Domestic Non-Banks
Non-loan financing from domestic non-banks consists of: privatization, asset management
proceeds, the Government Investment Fund, and State Capital Participation (PMN), National
Education Development Fund, Security Obligations, and Loans to PT PLN in 2010.
A. Privatization
According to Law Number 19 of 2003 concerning State Owned Enterprises (SOEs),
privatization is the sales of Company Shares, either in part or in whole, to other parties so as
to improve the performance and values of the Company, to magnify the benefits of Company
Financial Note and Indonesian Budget 2013
6-5
Chapter 6
Budget Deficit Financing and Fiscal Risk
to the State and people, and to expand share ownership to public. Privatization as a form of
SOE restructuring is not only to mobilize fresh fund, but also to arouse corporate culture and
professionalis, with among other things, management restructuring and supervision based
on good corporate governance principles. Privatization is no longer construed in narrow
interpretation, i.e. to sell the Government’s shares to non-government parties, instead it is
an attempt to pursue some targets, including: (1) to improve financial and added value of
the company; (2) to enhance the financial and management structure; (3) to establish
sound and competitive industrial structure; (4) to forge competitive SOEs with global
orientation; (5) ownership distribution to the public; and (6) to develop domestic capital
markets.
From this privatization program, part of the collected proceeds can be used as a source of
APBN financing, and the others deposited in company’s cash that can be used to elevate the
capacity of company.
In 2007, the realization of privativation prceeds recorded Rp3.0 trillion coming from the
prevatization of Bank BNI. In 2008 the Government agreed privatization to 44 SOEs. They
included those, which engaged in public works, industrial, plantation estates, and financial
sectors. However, due to unfavorable financial market conditions, privatization program in
2008 was not implemented. Realization of privatization proceeds in 2008 was just to amount
Rp82.3 billion from balance payment of Bank BNI privatization in 2007. In 2009 the
Government set no target from privatization. This related to the Government’s policies in
SOE management and external factors, such as stagnant global financial crisis, unexpected
commodity price fluctuation, and uncertain geopolitical factors. In 2010, the realization of
privatization proceeds was to record
Rp2.1 trillion from the sales of
GRAPH 6.4
greenshoe shares of PT Bank BNI in
SOE PRIVATIZATION PROCEEDS TREND , 2007 - 2012
amount of Rp1.35 trillion, Right Issue 5,0
4,7
of PT Bank BNI Rp741.6 billion,
Government’s share divesture in PT 4,0
APBNP
Realization
Kertas Blabak Rp0.5 billion, and
3,0
3,0
Government’s share divesture in PT
2,1
Intirub Rp6.3 billion. Meanwhile 2,0
privatization proceeds realized in 2011
1,2
amounted Rp425.0 billion from Right 1,0
0,5
0,4
0,4
Issue of PT Bank Mandiri, PT Basuki
0,1
0,0
0,0
0,0
0,0
0,0
Rahmat, underpayment of Bank BNI,
2007
2008
2009
2010
2011
2012
PT
Atmindo,
and
Jakarta Source: the Ministry of Finance
International Hotels Development. In
2012, the Government sets no target of budget financing from privatization proceeds. The
trend of privatization proceeds in 2007-2012 is presented in Graph 6.4.
trillion
rupiah
B. Asset Management Proceeds (HPA)
Pursuant to Regulation of the Minister of Finance Number 32/PMK.06/2006 concerning
State Assets Management from National Banking Restructuring Agency by PT Perusahaan
Pengelola Aset (Persero) as amended with Regulation of Finance Minister Number 92/
PMK.06/2009, Asset Management Proceeds (HPA) are any cash received from restructuring,
6-6
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
cooperation with other parties, receivable collection, sales, rental, dividends, coupon/interest
and/or other business income from the managed assets derived from completed transactions.
Apart from cash fund saved in the Government’s accounts, cash budget deficit financing
from non-loan sources in APBN is also from management proceeds of assets controlled by
the Government. In 2007 – 2012, assets management by the Government that can be used
to finance APBN deficit are the properties managed by Directorate General of State Assets
(DJKN) of the Ministry of Finance, and those under the management of PT Perusahaan
Pengelola Aset (PT PPA).
Since 2007 to date, assets managed by DJKN that can be used to finance APBN are credit
assets, property assets and shares of ex-BPPN or ex-PT PPA (Persero) that had been managed
by way of: (1) collection by State Receivable Collection Committee (for credit assets); (2)
sales (of property and share assets); (3) utilization (of property assets); (4) determination of
utilization status (of property assets) to K/L); and (5) right waiver with compensation for
property assets used for public interest, and assets trasferred to PT PPA (Persero) for the
management under Asset Management Agreement of the Ministry of Finance and PT PPA
(Persero) every year, covering share assets, non-banking share assets and credit/receivable
collection assets.
Asset sales made by the Government are carried out through auction mechanism initiated
with open announcement in national newspapers of the assets that have been verified and
assessed to set the values to be used in determining the limits of their selling prices and to
comply with requirements of auction as established in laws and regulations. Legal basis of
the auction is set out in Regulation of the Minister of Finance Number 93/PMK.06/2009
concerning Asset Management of ex-PT perusahaan Pengelola Aset by the Minister of Finance
as amended with Regulation of Finance Minister Number 190/PMK.06/2009, and Regulation
of Finance Minister Number 93/PMK.06/2010 concerning Auction Procedures.
For the management of assets consisting of account receivables, state receivable collection
of ex-BPPN, it will be dealt with by Official responsible for State Receiviable Management
(PUPN) of State Asset Service and Action Office (KPKNL), DG State Assets of the Ministry of
Finance. This is in conformity with the Regulation of Finance Minister Number 128/PMK.06/
2007 concerning State Receivable Management as amended with Regulation of Finance
Minister Number 88/PMK.06/2009.
Meanwhile, PT PPA performs asset management based on assignment from the Ministry of
Finance. Assets managed by PT PPA include bank share assets, non-bank share assets, and
credit/receivable collection assets, and share and credit assets. The proceeds of asset
management by PT PPA will be evaluated on annual basis by the Ministry of Finance, and
then decided into asset management agreement on yearly basis between the Ministry of
Finance and PT PPA to decide the types and number of assets to be managed by PT PPA.
Some constraints hampering this asset management are: (1) assets entangled with legal
problems requiring long time for the execution; (2) the assets controlled by the third parties
which impair the interests of prospective investors; (3) unscheduled sales; (4) NJOP rate of
the assets higher than the market price of the assets concerned; (5) unfavorable market
conditions; and (6) the absence or lack of supporting infrastructure, including legal
Financial Note and Indonesian Budget 2013
6-7
Chapter 6
Budget Deficit Financing and Fiscal Risk
instruments on properties. The trend of assets managed by PT PPA from 2007 to 2012 is
presented in Table 6.3.
TABLE 6.3
PT PPA MANAGED ASSET TREND, 2007 - 2012
NO.
JENIS ASET
Beginning Balance
01-01-2007
Beginning Balance
01-01-2008
Beginning Balance
27-02-2009
Beginning Balance
01-01-2010
Beginning Balance
01-01-2011
Unit
Asset Value
Unit
Asset Value
Unit
Asset Value
Unit
Asset Value
Unit
Asset Value
Asset Value
Aset
(Rp. Million)
Aset
(Rp. Million)
Aset
(Rp. Million)
Aset
(Rp. Million)
Aset
(Rp. Million)
(Rp. Million)
36.0
Balance
31-05-2012
1
Bank Shares
6
142.6
6
139.6
3
12.5
3
12.5
3
12.5
2
Non-Bank Shares
24
315.8
29
461.6
11
188.9
5
169.9
4
51.4
53.0
3
Collection Rights
388
1,317.0
376
709.9
4
628.8
4
524.3
4
508.1
511.0
4
Properties
3,890
1,884.3
3,568
1,782.6
-
-
-
-
-
-
-
5
Securities
11
17.1
9
16.7
-
-
-
-
-
-
6
Shares and Credit
3
705.8
2
878.8
2
4,322
4,382.5
3,990
3,989.2
20
Total
2,236.9
2
3,067.2
14
2,134.9
2,841.6
2
2,039.5
13
2,611.5
1,911.0
2,511.0
Source:PT PPA
In 2007 – 2008, contribution of asset management proceeds in budget deficit financing
recorded respectively Rp2.4 trillion and Rp2.8 trillion. Meanwhile, HPA proceeds in 2009
was worth of Rp690.3 billion. In 2010, the realization of asset management proceeds recorded
Rp1.1 trillion. The contribution of asset management proceeds is going down in line with the
deminishing number of assets management by DJKN. and PT PPA. In 2011, proceeds from
asset management contributed Rp1.2 trillion. In APBNP 2012, it is expected that its
contribution will reach Rp280.0 billion. The trend of asset management proceeds from 2007
to 2012 is presented in Graph 6.5.
GRAPH 6.5
ASSET MANAGEMENT PROCEEDS TREND, 2007-2012
(trillion rupiah)
3,9
4,0
3,5
2,8
3,0
2,4
2,5
2,0
APBNP
Realization
1,7
1,5
1,2
0,8
1,0
1,1
1,0
1,2
0,7
0,7
0,3
0,5
0,0
2007
2008
2009
2010
2011
2012*)
*) APBNP and Outlook 2012
Source: the Ministry of Finance
6-8
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
C. Government Investment Fund and PMN (State Capital Participation)
Government Investment Fund and PMN consist of some components, i.e.: (1) Government
Investment; (2) PMN (State Capital Participation); and (3) revolving fund. On each fiscal
year, not all of these components
GRAPH 6.6
are
allocated
in
APBN.
GOVERNMENT INVESTMENT FUND AND PMN TREND, 2007-2012
(trillion rupiah)
Government Investment Fund
and PMN are financing 20
Revolving Fund
expenditure spent not on regular
PMN
basis, instead subject to
15
Government Investment
Government policy, and as such
10
has ad-hoc character according to
the needs of Government policy
5
during certain period, for
example Government support to
0
infrastructure development, the
2007
2008
2009
2010
2011
2012*
establishment of an SOE to * APBNP 2012
Sumber: Kementerian Keuangan
execute Government policy, and
supports to KUMKM (cooperative, micro, small and medium enterprises). The trend of
Government Investment Fund in 2007-2012 is presented in Graph 6.6.
Government Investment
Government Investment is the placement of a sum of fund and/or assets for long term
period for investment, i.e. to buy securities and direct investment to gain economic, social
benefits and other advantages. Government Investment is fund allocated by the Government
in APBN, which its spending shall refer to Law Number 1 of 2004 concerning State Treasurey,
juncto Government Regulation Number 1 of 2008 concerning Government Investment that
may comprise: (1) capital participation in business entities with ownership entitlement,
including the establishment of a limited liability company and/or takeover of a limited liability
company; (2) loan extension to business entities, Public Service Agency (BLU), province/
kabupaten/city governments and regional general public agency (BLUD) with compensation
rights of loan principal, interest and/or other expenses; and (3) investment of securities
through the purchase of shares and/or bonds.
In 2007 – 2009, the components of Government Investment are (regular) Government
investments managed by Public Service Agency for Central Government Investment (BLU
PIP) of the Ministry of Finance. However, in 2010, these components are to increase with
the allocation of Housing Financing Liquidity Facility (FLPP). In 2011, the components of
Government investments was further increased with the allocation of Government
Investment Credit, meanwhile FLPP was allocated to Revolving Fund. In 2012, Government
Investment component is to rise with the fund allocation for PT Inalum aquisition.
State Capital Participation (PMN)
Under PP Number 6 of 2006 concerning State/Regional Asset Management, PMN is defined
as the transfer of ownership of goods owned by state/region, which were originally inseparable
to separable assets as state/region capital/shares in SOEs, Regional SOEs or other legal entities
owned by the State.
Financial Note and Indonesian Budget 2013
6-9
Chapter 6
Budget Deficit Financing and Fiscal Risk
Meanwhile, according Law No. 10 of 2010 concerning APBN 2011, the definition of PMN
has been expanded not only to SOEs, Regional SOEs and Limited Liability Companies, but
also to international financial organization/institution (LKI). This expanded definition relates
to the allocation of PMN to international financial organization/institution (LKI) in APBN
2011 through financing, since it has been part of permanent investment of the Government.
PNM allocation to international financial organization/institution (LKI) through financing
is consistent with BPK RI’s recommendations. This allocation was previously extended
through other expenditure.
Under Law Number 22 of 2011 concerning APBN 2012, the definition of PMN is further
expanded not only to SOEs and international financial organization/institution (LKI) but
also to other PMN. This is due to the allocation of PMN to ASEAN Infrastructure Fund
(AIF), which is not either SOEs or international financial organization/institution (LKI).
The allocation and use of PMN fund in 2007-2008 was as follows: (1) 2007 Rp2.7 trillion for
PT Sarana Pengembangan Usaha, PT Asuransi Kredit Indonesia, and PT Pusri; and
(2) 2008 Rp2.5 trillion for PT PPA for SOE Restructuring Rp1.5 trillion, and limited liability
companies engaged in infrastructure financing sector (PT Sarana Multi Infrastruktur/SMI)
Rp1.0 trillion.
Meanwhile, the amounts and allocations of PMN in 2009 – 2012 are as follows: (1) 2009
RpRp11.7 trillion for PT Perkebunan Nusantara II, PT PPA, PT Penjaminan Infrastruktur
Indonesia (PT PII), PT Askrindo and Perum Jamkrindo (KUR), and PT Pertamina;
(2) 2010 Rp6.0 trillion for LPEI, PT PII, PT Askrindo and Perum Jamkrindo (KUR), PT
SMI, Perusahaan Penerbit SBSN II, PT Askrindo and PT BPUI (grant of Bank Indonesia’s
shares); (3) 2011 Rp9.3 trillion, for PT PII, PT Askrindo and Perum Jamkrindo (KUR), PT
Dirgantara Indonesia, PT Pupuk Iskandar Muda, Perusahaan Penerbit SBSN Indonesia III,
PT Sarana Multigriya Finansial, PT Geo Dipa Energi, PT Inhutani I, PT PAL (Persero), PT
Merpati Nusantara Airlines (Persero), international financial organization/institution (LKI),
and other PMN, i.e. ASEAN Infrastructure Fund (AIF), and (4) 2012 Rp8.9 trillion for PT
PII, PT Askrindo and Perum Jamkrindo (KUR), PT SMI, PT Dirgantara Indonesia,
Perusahaan Penerbit SBSN Indonesia III and IV, strategic SOEs, international financial
organization/institution (LKI), and other PMN, i.e. to AIF.
Not all PMN allocated to the Government during 2007 – 2012 consists of fresh money.
Some PMM to SOEs are allocated in the form of conversion of SLA loan and RDI principal
and PNBP dividends of grants or shares from other parties (in-out) in APBN. For example,
(1) PMN to PT Pertamina in 2009 as a result of reconciliation of Pertamina’s PNBP (no-tax
revenue) receivable and payable to the Government as basis in determining the opening
balance sheet of Pertamina in 2003; and (2) PMN to PT Askrindo and PT BPUI in 2010
from the grant of Bank Indonesia’s shares.
PMN consisting of fresh money, is more to support Government’s policies in particular affairs,
such as PMN to PT PII, and PT SMI aiming to reinforce infrastructure guarantee and
development, and PMN to PT Askrindo and Perum Jamkrindo to support capacity building
and expansion of KUR.
6-10
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
In the meantime, PMN realization to international financial organization/institution (LKI)
in 2011 was Rp611.3 billion. This PMN was to: (1) Islamic Development Bank (IDB);
(2) The Islamic Corporation for the Development of Private Sector; (3) Asian Development
Bank (ADB); (4) International Bank for Reconstruction and Development (IBRD);
(5) International Fund for Agricultural Development (IFAD); (6) Credit Guarantee and
Investment Facility (CGIF); (7) International Monetary Fund (IMF). In 2012, the amounts
of PNM is to reach Rp541.9 billion for: (1) The Islamic Corporation for The Development of
Private Sector; (2) Asian Development Bank (ADB); (3) International Bank for
Reconstruction and Development (IBRD); (4) International Finance Corporation (IFC);
(5) International Fund for Agricultural Development (IFAD); and (6) International
Development Association (IDA). PMN to international financial organization/institution
(LKI) is to maintain and fortify the voting power in LKI.
In 2012, another PNM is allocated to ASEAN Infrastructure Fund (AIF) of Rp380.0 billion.
It is planned that Indonesia will pay participation fund of USD120 million in 3 tranches
from 2012-2014.
Revolving Fund
Revolving fund is fund, which is lent to the communities for the management and revolving
by budget user or proxy of budger users aiming to bolstering people’s economy and other
objectives. A fund will be categorized as revolving if complying with the following criteria:
(1) part of state finance; (2) indicated in APBN and/or government financial statements;
(3) owned, controlled and/or managed by Budget User (PA)/Proxy of Budget User (KPA);
(4) channelled to communities/groups of communities, collected with or without added
values, and revolved to other communities/groups of communities (revolving fund);
(5) aimed to reinforce the capital structure of cooperatives, micro, small and medium
enterprises and other business enterprises; and (6) collectible in some times.
Before 2009, the revolving fund was classified as government expenditure. In the next
progress, the Government deemed that this revolving fund was not longer liable for
classification in government expenditure because of its revolving characteristics. Based on
Presidential Instruction Number 6 of 2007 concerning Policy for Real Sector Development
Acceleration and Micro, Small and Medium Enterprise and Presidential Instruction Number
5 of 2008 concerning Economic Program Focuses in 2008-2009, the Minister of Finance
issued PMK Number 99 of 2008 concerning Guidelines for Revolving Fund Management in
the Ministries/Agencies. To follow the said PMK, starting from 2009 the Government allocated
revolving fund in budget financing.
During 2009 – 2011, the realization of revolving fund allocated by the Government in every
fiscal year was varying dependent on Government’s policy, and needs of fund to be revolved
to the communities. In 2009, budget realization for revolving fund was Rp911.0 billion used
to finance revolving fund in Revolving Fund Management Agency (LPDB) for KUMKM
Rp290.0 billion and revolving fund for Public Service Agency (BLU) for Forest Development
Financing Center (P3H) Rp621.0 billion. Meanwhile, in 2010 budget for revolving fund was
allocated at Rp2.7 trillion consisting of revolving fund for LPDB KUMKM Rp0.4 trillion and
revolving fund of BLU for Housing Financing Center (PPP) Rp2.3 trillion. In 2011, the
Financial Note and Indonesian Budget 2013
6-11
Chapter 6
Budget Deficit Financing and Fiscal Risk
GRAPH 6.7
realization of revolving fund was to rise
REVOLVING FUND TREND, 2009 - 2012
to Rp8.8 trillion consisting of revolving
(trilllion rupiah)
fund for LPDB KUMKM Rp0.3 trillion, 5,0
4,5
3,9
BLU PPP Rp3.6 trillion, Toll Roal
4,0
3,6
3,5
Regulatory Body (BPJT) Rp3.9 trillion
3,0
and Geothermal Rp1.1 trillion. In
2,3
2,5
2,0
APBNP 2012, the revolving fund is to
1,5
1,1
record Rp7.0 trillion. This sum is
1,0
0,6
0,4
0,3
0,3
0,5
allocated for LPDB KUMKM Rp557.7
0,0
billion, BLU PPP Rp4.7 trillion, BLU
2009
2010
2011
APBNP 2012
BPJT Rp900 billion and Geothermal *Source:
the Ministry of Finance
Rp876.5 billion. The trend of revolving
fund realization from 2009 to 2012 is presented in Graph 6.7.
BLU P3H
LPDB KUMKM
BLU PPP
Ge othermal
4,7
BLU BPJT
0,9 0,9
0,6
2012*
D. National Education Development Fund (DPPN)
National Education Development Fund is education budget allocated to establish endowment
fund to assure education program for the next generation, which consists of intergenerational
equity, and education reserve fund to anticipate the needs of rehabilitation for the damaged
education facilities as a result of natural disaster managed by BLU responsible for education
fund management.
The Government just allocated national education development fund through budget financing
in 2011 with Rp1.0 trillion and 100% realized. In 2011, this national education development
fund allocation also realized 100%, i.e. Rp2.6 trillion. In APBNP 2012, the allocation of national
education development fund is Rp7.0 trillion. In early stage, this national education
development fund is managed by Government Investment Center, and by end of 2011 the
management is transffered to working unit (Satker) BLU for Education Fund Management
Agency (LPDP).
E. Guarantee Obligations
To support the acceleration of infrastructure project development, the Government has
provided guarantee to banking creditors/business entities to participate in the construction
of some projects including:
1.
Coal fired Electrical Power Generation Development Acceleration (10,000 MW Project
Stage I);
2.
Water Supply Acceleration;
3.
Renewable Energy, Coal and Gas Fired Electrical Power Generation Development
Acceleration (10,000 MW Project Stage II);
4.
Infrastructure Development under Public Private Partnership (PPP) Scheme.
Guarantee to 10,000 ME Project Stage I is provided in conformity with Presidential Regulation
Number 86 of 2006 as amended with Presidential Regulation Number 91 of 2007. Through
June 2012, 33 Government’s guarantee letters have been issed for electrical power generation
projects and other 4 guarantee letter for transmission projects leaving a total guarantee
value Rp35.1 trillion and USD4.0 billion.
6-12
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
To accelerate Water Supply Program, the Government extends guarantee to banking creditors.
The guarantee includes 70.0 percent of debt services of PDAMs’ investment credits to banks.
Of this 70.0 percent of Government’s guarantee, the Central Government shall bear 40.0
percent that will be further converted into PDAM loans, and the other 30.0 percent will be
shared to Regional Government for total liabilities of default PDAMs. Until June 2012, the
Central Government has issued three Guarantee Letter with total value Rp50.2 billion for
PDAM projects in Ciamis, Lombok Timur and Bogor.
In addition, under Presidential Regulation Number 4 of 2010, the Government assigns PT
PLN (Persero) to develop electrical power generation using renewable energi, coals and gas.
For this program, the Government provides guarantee to private power generation contractors
with regard to business feasibility. PT PLN (Persero) will buy the power under Electrical
Power Sales – Purchase Agreement. As of June 2012, the Government has issued two
Guarantee Letters of this Business Feasibility, i.e. for PLTP Rajabasa and PLTP Muaralaboh.
In effort to accelerate and expand Indonesia’s economic development, the Government
together with PT Penjaminan Infrastruktur Indonesia/PT PII (Persero) also gives guarantee
for infrastructure project development executed under PPP scheme as established in
Presidential Regulation Number 78 of 2010. For the first time, on 6 October 2011, the
Government along with PT PII signed guarantee agreement for PLTU Project in Central
Java under PPP scheme. The provided guarantee was that of amount sharing, in which PT
PII shall guarantee maximum Rp300.00 billion and the remaining portion shall be secured
by the Government. PLTU Project in Central Java with cap. 2 x 1,000 MW is an infrastructure
project showcase executed with PPP scheme. Total project values guaranteed is around
Rp30.0 trillion. The guarantee is anticipated to take effective by end of 2012 when the project
is expected to reach its financial close.
As the consequence of the issued guarantee, the Government has allocated budget for this
guarantee obligation. Budget of guarantee obligation allocated for 10,000 MW project by PT
PLN and Water Supply Acceleration Project by PDAMs from 2008 – 2012 is presented in
Table 6.4.
TABLE 6.4
THE GOVERNMENT SECURITY FUND ALLOCATION TREND, 2008 - 2012
(billion Rupiah)
Penjaminan
2008
2009
2010
2011
2012
283.0
1,000.0
1,000.0
889.0
623.3
-
-
50.0
15.0
10.0
283.0
1,000.0
1,050.0
904.0
633.3
1. Coal fuelled power generation acceleration by PT PLN
(Persero)
2. Water Supply Acceleration by PDAM
Total
Source: the Ministry of Finance
In the implementation, the realization of guarantee obligation budget from 2008 to semester
I 2012 remains nil or not yet used, since PT PLN and PDAMs can afford to meet their debt
Financial Note and Indonesian Budget 2013
6-13
Chapter 6
Budget Deficit Financing and Fiscal Risk
services and there is no claim of guarantee payment to the Government from creditor. In
addition, the Government continually monitors potential default of PT PLN and PDAM, and
take mitigation measures to prevent default.
F. Loan to PT PLN
To increase electrification ratio and accelerate low-cost power general development the
Government has assigned PT PLN (Persero) to execute coal fired power generation
development acceleration project under Perpres No. 71 of 2006 concerning the Assignment
to PT Perusahaan Listrik Negara to accelerate the development of electrical power generation
with coals.
To finance the equity funding portion of 10,000 MW project, recovery and electricity system
improvement and investors to serve natural loads, funds required by PT PLN (Persero)2010
exceeded the funding capacity of PT PLN (Persero) in corporation wise. Measures taken by
the Government to cover such financing shortage of PT PLN were to extend loans to PT PLN
(Persero) in amount of Rp7.5 trillion.
Under Prepres Number 9 of 2011 concerning Assignment to Government Investment Center
(PIP) to extend soft loans to PT PLN (Persero), the Government has assigned PIP to grant
soft loans to PT PLN as follows:
1. The term of loan: 15 (fifteen) years;
2. Grace period of repayment: 5 (five) years; and
3. Interest rate based on Bank Indonesia rate.
6.2.2.2 Loan Based Financing
Loan Based Financing consists of SBN (Government Bonds), foreign loans and domestic
loans. In 2007-2012 period, SBN plays leading role as the source of loan based financing.
The trend of this financing with loans from 2007 to 2012 is presented in Table 6.5.
TABLE 6.5
LOAN BASED FINANCING TREND, 2007 - 2012
(trillion Rupiah)
Realization
Description
2007
A. Government Bond (SBN) (Net)
B. Foreign Loan (Net)
1. Foreign Loan Drawing (Net)
a. Program Loan
b. Project Loan
2. SLA
3. Foreign Loan Amortization
C. Domestic Loan (Net)
Total
2008
2009
2010
2011
APBNP
2012
57.2
85.9
99.5
91.1
119.9
(26.5)
(18.4)
(15.5)
(4.6)
(17.8)
159.6
(4.4)
34.1
50.2
58.7
54.8
33.7
53.7
19.6
14.5
(2.7)
(57.9)
30.1
20.1
(5.2)
(63.4)
28.9
29.7
(6.2)
(68.0)
29.0
25.8
(8.7)
(50.6)
15.3
18.5
(4.2)
(47.3)
15.6
38.1
(8.4)
(49.7)
0.0
0.0
0.0
0.4
0.6
1.0
30.7
67.5
84.0
86.9
102.7
156.2
Source: the Ministry of Finance
6-14
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
6.2.2.2.1Government Bond (SBN)
During 2007 – 2012,
GRAPH 6.8
SBN emission (net)
SBN ISSUANCE TREND (NET), 2007-2012
shows
significant
(trillion rupiah)
207,1
increase. See Graph
210
176,6
6.8. SBN (net) is to rise
167,6
148,5
160
Rp57.2 trillion in 2007
132,7
119,9
117,6
116,9
to Rp159.6 trillion in
99,5
110
91,1
85,9
2012.
Factors
57,2
contributing
the
60
increase of SBN (net)
10
emission are: (1) needs
of prioritizing domestic
(40)
(46,8)
(49,1)
(59,0)
(59,7)
financing sources in
(76,5)
(87,3)
(90)
rupiah currency, (b)
2007
2008
2009
2010
2011
2012*
needs of flexibility in
Issuance
On Due and Buyback
SBN Neto
*Realization up to semester I 2012
portfolio and loan risk
Source: the Ministry of Finance
management, and (c)
needs of developing domestic financial markets. Graph 6.8 shows that the realization of
principal payment for SBN on due and buyback records upward trend from year to year that
will increase the target of SBN (gross) emission.
The target of SBN (gross) emission is complied with through two instruments, namely SUN
(Government Securities) and Government Syariah Based Security (SBSN). SUN instrument
consists of Government Bonds (ON) with (1) fixed rate (FR) and Government Retail Bond
(ORI); (2) variable rate, i.e. variable rate (VR) series; (3) without interest, i.e. state treasury
bill (SPN) and Zero Coupon Bond (ZC), and (4) foreign currency ON. Meanwhile, SBSN
instrument comprises Ijarah Fixed Rate (IFR), Sukuk Ritel (SUKRI), Sukuk Dana Haji
Indonesia (SDHI), Syariah Based Treasury Bill (SPNS), Project Based Sukuk (PBS) and
foreign currency sukuk.
The preference to the type of SBN instrument to be issued refers to debt management strategies
of either annual strategy or medium-term strategy. Generally speaking, based on debt
management strategies, the issuance of SBN will be prioritized in domestic financial markets.
It aims: (1) to minimiz debt risks, especially relating to exchange rate fluctuation, (2) to
develop domestic financial market, and (3) to set benchmark for the emission of private
bonds in domestic markets. Nevertheless SBN emission in domestic markets must be carried
in carefull and prudent manner in view of the absorption capacity of domestic financial
markets. It is necessary to avoid crowding out effect in domestic financial market when
private sectors wish to look for financing sources from capital markets. With such various
considerations, it is expected that target of debt financing with SBN emission can be met
with measurable and efficient costs and risks.
The increasingly SBN emission in domestic markets from year to year has affected the
outstanding domestic SBN. Graph 6.9 shows that outstanding domestic SBN is to rise from
Rp737.1 trillion in 2007 to Rp992.0 trillion by end of 2011. During 2007-2012 period. The
Financial Note and Indonesian Budget 2013
6-15
Chapter 6
Budget Deficit Financing and Fiscal Risk
proportion
of
GRAPH 6.9
THE TREND `OF NET SBN ISSUANCE AND OUTSTANDING DOMESTIC SBN , 2007-2012
outstanding
domestic SBN to
total outstanding 1.200
56%
55,1%
54,4%
debts is higher
53,8%
54%
53,1%
than 50 percent on 1.000
52,6%
the
average,
992,0
800
52%
902,4
except in 2008.
783,9
836,3
The
declined 600
50%
1.057,5
proportion
of
47,9%
48%
outstanding SBN 400
737,1
was
due
to
159,6
200
46%
119,9
99,5
91,1
depreciation of
85,9
57,2
rupiah exchange
0
44%
rate so that the
2007
2008
2009
2010
2011
2012*
SBN Netto
Outstanding Domestic SBN
Proportion of Domestic SBN to total Loans (RHS)
portion of debts in
foreign currencies
significantly
increased. The
proportion of outstanding domestic SBN to toal debts by end of 2012 is expected to reach
54.4 percent, higher than proportion per end of 2007 at Rp53.1 percent.
Meanwhile, the realization of foreign
currency
SBN
issuance
in
international markets from 2007 to
30
14%
12,7%
2011 included foreign currency SBN
10,8%
12%
25
9,7%
in USD amounting USD15.5 billion
9,0%
24,6
10%
20
21,6
7,5%
and in Japanese Yen JPY95.0 billion.
8%
18,0
15
15,2
SBN issuance in JPY was made by
6%
4,7%
10
11,2
4%
the Government in 2009 and 2010
4,3
7,0
3,9
3,5
3,5
5
2,7
2%
1,5
with nominal values respectively
0
0%
JPY35.0 billion and JPY60.0 billion.
2007
2008
2009
2010
2011
2012*
Foreign Currency SBN Issuance
The consequence of this SBN
Outstanding foreign currency SBN
issuance, the outstanding foreign
*per June 2012
Source: the Ministry of Finance
currency SBN was to rise from
USD7.0 billion in 2007 to USD21.6
billion in 2011. With such nominal value increase, the ratio of outstanding foreign currency
SBN to total Government debts had increased from 4.7 percent in 2007 to 10.8 percent by
end of 2011 as presented in Graph 6.10.
GRAPH 6.10
THE TREND OF FOREIGN CURRENCY SBN ISSUANCE AND OUTSTANDING
FOREIGN CURRENCY SBN , 2007-2012
(billion USD)
SBN issuance in 2012 is expected subject to numerous issues ranging from positive trend of
the bolstering Indonesia’s debt rating to negative impacts of uncertain solution to debt crisis
in Euro Zone and inflation rise expectation. However, based on the realization of SBN issuance
as of end of June 2012, in general, SBN offering experiences oversubscribe, either for domestic
or foreign issuance. During the auction of domestic SBN in January-June 2012, the incoming
bids recorded Rp295.1 trillion with the winning sums of Rp101.8 trillion. Thus there is
oversubcribe 2.9 times on the average. This condition is attributed to relatively low average
6-16
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
bond yield with term 5 and 10 years, i.e. 5.2 percent and 5.6 percent respectively. This average
yield is lower than the same period in 2011 recording 7.8 percent and 8.1 percent respectively.
The realization of domestic SBN issued in January-June 2012 period covers domestic SUN
and SBSN with fixed rate consisting of SPN, FR, SPNS, islamic fixed rate (IFR), PBS, Sukuk
ritel, and SDHI. In January 2012, the Government for the first time circulated to the market
project/activity based sukuk (PBS). In 2011, the issuance of this PBS was hampered by the
minimum interests of investors and on the other side they expected on exceeding yields. The
realization of PBS issuance until June 2012 is Rp12.9 trillion with total bids Rp29.3 trillion or
experiences oversubcribe 2.3 times. It indicates that this instrument is soundly acceptable by
the investors. It is expected that this instrument expand the base of state sukuk investors and
at the same time capable of financing Government’s projects. To develop SBSN instrument,
at present the Government is preparing infrastructure and suprastructure for the emission
of PBS instrument under project financing scheme. The issuance of this project financing
sukuk is expected capable of assisting the Government in financing priority activities in APBN.
To assure the adequacy of debt financing needs, SBN issuance is also made for foreign markets
in foreign currencies aiming to: (1) avoid crowding out effect of domestic financial market;
(2) set benchmark for Indonesia’s financial assets in international markets, and (3) manage
Government debt portfolio. The volume of foreign currency SBN to be circulated in the
market is subject to the financing needs and risk profile and debt management strategies. To
date, the Government has issued foreign currency SBN in US dollar (USD) with global bond
and global sukuk, and in Yen currency (JPY) with JBIC (shibosai) backed samurai bond.
During January-June 2012 foreign currency SBN has been issued twice. Total incoming
bids reach USD11.5 billion for two series of foreign currency bonds with term 10 and 30
years respectively. From these bids, the Government absorbs USD4.3 billion or experiences
oversubcribe 2.7 times on the average. The lowest yields recorded during the issuance of
foreign currency SBN series 10 and 30 years are respectively 3.9 percent and 5.4 percent.
These low yields reflect improving perception of markets to Indonesia’s economic risks, either
in line with the bolstering Indonesian debt rating to investment grade by rating agency Fitch
and Moddy’s. The emission of foreign exchange SBN uses Global Medium Term Notes
(GMTN) format since it can reach broader base of investors with faster offering and execution.
Generally speaking, as of the end of June 2013, the Government has circulated SBN (gross)
Rp176.6 trillion consisting of issuance in domestic markets Rp137.5 trillion and foreign
markets USD4.3 billion or equivalent to Rp39.0 trillion. Meanwhile the realization of
payments for principal on due and buyback has reached Rp59.0 trillion. In netto term, the
SBN emission has recorded around Rp117.6 trillion or 73.7 percent of target net issuance set
in 2012.
To meet the remaining target of SBN (net) issuance until the end of 2012, the Government
will use all SBN instruments available both in domestic or foreign markets. The issuance of
domestic SBN will include regular SBN with fixed rate, retail SBN, and short-term SBN.
However, this foreign currency SBN issuance plan is dependent on the conditions of global
financial markets, risks and costs to bear. This foreign currency SBN issuance covers the
circulation of foreign currency sukuk and samurai bond aiming to create benchmark in
Financial Note and Indonesian Budget 2013
6-17
Chapter 6
international market, to
meet the expenditure
needs of the Government
in foreign currencies, and
to buttress national
foreign exchange reserves.
More
comprehensive
illustration
on
the
realization of proceeds
acquired from SBN
issuance by instruments
during 2007-2012 is
presented in Table 6.6.
Budget Deficit Financing and Fiscal Risk
TABLE 6.6
SBN ISSUANCE REALIZATION TREND, 2007 - 2012
Type of Instrument
2007
2008
2009
2010
2011
2012*
4.2
10.5
56.1
15.6
0.0
0.0
0.0
0.0
10.0
9.6
41.5
13.5
5.0
0.0
0.0
0.0
25.2
0.0
42.3
8.5
6.5
0.2
5.6
2.7
29.8
0.0
72.1
8.0
0.0
6.2
8.0
12.8
41.3
0.0
98.9
11.0
0.0
4.6
7.3
11.0
19.4
0.0
69.0
0.0
0.0
13.3
13.6
15.3
1.5
13.6
0.0
0.0
3.9
36.8
0.0
0.0
3.7
43.2
35.0
3.7
2.0
18.6
60.0
6.5
3.5
30.5
0.0
0.0
4.3
39.0
0.0
0.0
a. Domestic Obligation (trillion Rp)
-
SPN/ SPNS
ZC
FR
ORI
VR
IFR/ PBS
SRI
SDHI
b. Foreign Currency Bond
- USD denomination (billion USD)
(trillion Rp)
- JPY denomination (billion JPY)
(trillion Rp)
*) Per end of June 2012, the new issuance not taken into account due to debt switch
Source: the Ministry of Finance
To identify potential absorption of domestic SBN markets, the Government divides the
ownership of tradable domestic SBN by types of investors that can be categorized in general
into banking investors and non-banking investors. Banking investors are recapitulated SOE
banks, recapitulated private banks, syariah bank, and Bank Indonesia. As to non-banking
investors they include pension fund, insurance, foreign investors, individual investors, mutual
fund, and securities. In detail, the ownership of each investor to tradable domestic SBN is
presented in Table 6.7.
Table 6.7 shows that
TABLE 6.7
TRADABLE SBN OWNERSHIP TREND, 2007 - 2012
until the end of June
(trillion rupiah)
2012, the ownership of
2007
2008
2009
2010
2011
2012
banking invetors is to rise
Owners
Dec
Dec
Dec
Dec
Dec
Jun
by 10.5 percent from
I. Bank
268.7
258.8
254.4
217.3
265.0
297.0
Rp268.7 trillion by end of II. Bank Indonesia
14.9
23.0
22.5
17.4
7.8
20.4
2007 to Rp297.0 trillion III. Non-Banks
194.2
244
304.9
406.5
450.7
472.8
1. Reksadana
26.3
33.1
45.2
51.2
47.2
48.6
as of June 2012. The
2. Insurance
43.5
55.8
72.6
79.3
93.1
106.9
ownership of Bank
3. Foreign
78.2
87.6
108.0
195.8
222.9
224.4
4. Pension Fund
25.5
33.0
37.5
36.8
34.4
34.6
Indonesia on SBN is also
5. Security
0.3
0.5
0.5
0.1
0.1
0.3
to increase by 36.9
6. Others
20.5
33.9
41.1
43.4
53.1
58.1
percent, i.e. from Rp14.9
Total
477.8
525.7
581.8
641.2
723.6
791.2
trillion by end of 2007 to Source: the Ministry of Finance
Rp20.4 trillion per June 2012. This increased ownership of central bank is for the interests of
investment and for SBN market stabilization and monetary operation.
Meanwhile, the ownership of non-banking investors records relatively significant increase,
i.e. to reach 143.5 percent, from originally Rp194.2 trillion by end of June 2012 to Rp472.8
trillion per end of June 2012. Increase in the ownership of non-banking investors is contributed
by higher ownership of mutual fund institution by 84.8 percent, insurance 145.7 percent,
and pension fund 35.7 percent, and ownership of individual investors and securities 180.8
percent. As to the ownership of foreign investors to tradable SBN, it is also to rise by 187.0
percent, i.e. from Rp78.2 trillion by end of 2007 to Rp224.4 trillion in June 2012. In overall,
the portion of foreign investor ownership reaches 28.4 percent of total tradable SBN.
6-18
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
This significant ownership of foreign investors indicates that they have high confidence about
the fundamental economic conditions of Indonesia. On the other side, high foreign ownership
is also vulnerable to risks of sudden reversal that may spark systemic impacts to national
economy. To anticipate the said sudden reversal, the Government has taken a number of
policies including to elevate the alertness against domestic and global economic conditions,
to revise crisis management protocol/CMP in SBN markets, and to prepare SBN market
stabilization mechanism scheme with Bond Stabilisation Framework (BSF).
6.2.2.2.2Foreign Loans
During 2007-2012, budget financing with foreign loans is smaller than the payment of
principals (net negative flow). With the implementation of this policy, credit rating of the
Government and the inclusion of Indonesia in middle income country has decreased the
portion of foreign loans, especially for soft loans. This lowering portion of foreign loans is
also attributed to the increasing cost of borrowing as a result of unfavorable international
financial market conditions.
In 2007 – 2012, the realization of foreign loan withdraw reaches 84.4 percent on the average
consisting of project loans 73.5 percent and program loans 98.8 percent. Until June 2012,
the realization of foreign loan withdraw is to record 12.5 percent of the target set in APBNP,
consisting of project loans 11.7 percent and program loans 14.4 percent.
The low realization of foreign loan withdraw, especially project loans is due to some factors
as follows:
1. For new project loans, the low absorption is mainly attributed to:
a. K/L or the beneficiaries of SLA not yet allocates downpayment or rupiah counterpart
fund;
b. Problems in goods and services procurement including land acquisition;
c. Administration preparation in early stage of project sometimes longer than the
specified time; and
d. Lender’s fiscal year not synchronized with Government’s fiscal year.
2. In case of on-going project loans, the low absorption is because of:
a. Relatively prolonged issuance of No Objection Letter (NOL) for the project;
b. Changing design and scope of project; and
c. Problems encountered during project implementation especially infrastructure
projects, for example extreme wheather.
During the same period, the realization of program loan withdraw is generally consistent
with the target set in APBN. This target fullfilment is thanks to policy matrix as requirement
for program loan release. Policy matrix contains Government’s priority activities or programs
that must be carried out in the current year. However, in 2011, the realization of program
loan withdraw in lower than the target of APBN. It is because program loan with theme
climate change was not consistent with the Government’s policy and therefore cancelled.
The omitted program loans amounted USD600.0 million coming from World Bank USD200.0
Financial Note and Indonesian Budget 2013
6-19
Chapter 6
Budget Deficit Financing and Fiscal Risk
million, ADB USD100.0 million, Japanese Government equivalent to USD100.0 million,
and France Government USD100.0 million. Illustration of realization for foreign loan
withdraw is presented to Graph 6.11.
GRAPH 6.11
FOREIGN LOAN DRAWING TREND, 2007-2012
(trillion rupiah)
80
70
60
29,4
30,3
50
30
41,4
39,0
14,5
15,6
39,0
38,1
APBN
APBNP
15,3
19,6
23,2
15,3
29,0
30,1
26,4
19,0
20
10
19,2
28,9
40
37,0
29,7
21,8
20,1
APBNP
LKPP
25,8
18,5
0
APBNP
LKPP
2007
2008
APBNP
LKPP
2009
Project Loan
APBNP
LKPP
APBNP
2010
2011
LKPP
2012
Program Loan
Source: the Ministry of Finance
With regard to subsidiary loan agreement (SLA), it can be elaborated as follows. SLA is
foreign loan or domestic loans received by the Central Government for relending to regional
governments or SOEs and must be paid back under certain terms and conditions. SLA is a
facility granted by the Government to the regional government and SOEs to get loans especially
for the financing of particular activities. Under this SLA mechanism, the loan procurement
must be made in exhaustive manner, since: (1) its withdraw is potential to increase the
outstanding loans despite in-out character in APBN; (2) lender will classify this loan as
Government’s loan; (3) potential mismatch of debt service payment from the beneficiary of
SLA with debt service payment to lender; and (4) similar to project loans, low loan absorption
is potential to increase loan fees.
Loan extension for activities or project to the regional governments or SOEs will be carried
out under subsidiary loan agreement (SLA) mechanism since these two institutions are
different entities with Central Government. In addition, pursuant to Government Regulation
No. 10 of 2011 concerning Foreign Loan and Grant Procurement Procedures, the Ministries/
Agencies (K/L), Regional Governments and SOEs are not allowed to make any agreement
whatsoever that may arise liabilities from foreign loan procurement.
In 2009 – 2011 the realization of SLA recorded 45.2 percent to its ceiling in APBNP on the
average. Then, in 2012, the realized SLA as of semester I is to reach 9.2 percent of its ceiling
set in APBNP 2012, i.e. 8.4 percent. The low realization of SLA absorption is attributed to: (1)
slow land acquisition for project sites; (2) delayed implementation from the original schedule;
(3) slow tender approval process, i.e. the issuance of NOL for bid proceedings; and (4)
unfinished SLA discussion process in the related commission of DPR RI (Parliament). The
trend of SLA realization during 2007 – 2011 is presented in Graph 6.12.
6-20
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
In terms of the user
GRAPH 6.12
composition of SLA
SLA DRAWING TREND , 2009–2012
proceeds from 2009 – trillion rupiah
percent
18,0
0,60
2012, SOEs are the largest
APBNP
16,0
0,52
borrowers, and followed by
0,48
Realization
0,50
14,0
% Realization
the regional governments.
16,8
0,40
12,0
Of SOEs borrowing SLA,
13,0
0,36
10,0
8,7
0,30
PT PLN (Persero) is the
11,7
8,0
6,2
8,4
most dominant borrowing
0,20
6,0
4,2
enterprise if compared
4,0
0,10
0,09
with other state owned
2,0
0,8
enterprises. SLA to PT PLN
0,00
2009
2010
2011
2012*)
(Persero) is maintly used
Realization Semester I
to
finance
power *)Source:
the Ministry of Finance 2012
i n f r a s t r u c t u r e
development projects such as the development of new power generation plant, transformator
procurement, construction of transmission networks, etc. Some other SOEs being the
recipients of SLA proceeds include PT PGN, PT SMI, PT Pelindo II, PT PII, and PT Pertamina.
Meanwhile, SLA to the regional governments is normally to finance Urban Sector
Development Reform Project (USDRP), Urban Water Supply And Sanitation Project
(UWSSP), and Jakarta Urban Flood Mitigation Project (JUFMP)/Jakarta Emergency
Dredging Initiative (JEDI). Some regional governments receiving SLA include Pemkot Palopo,
Pemkot Sawahlunto, Pemkot Banda Aceh, Pemkab Morowali, Pemkot Bogor, Pemkab
Kapuas, Pemkab Muara Enim, and Pemprov DKI Jakarta.
6.2.2.2.3 Domestic Loan
Domestic loan is a loan
GRAPH 6.13
based
financing
DOMESTIC LOAN DRAWING TREND 2010-2012
billion rupiah)
instrument to procure the
1.600
50%
1.452,1
domestically produced
42,7%
39,4%
goods,
to
enhance
40%
1.132,5
1.200
productivity of domestic
1.000,0
30%
strategic industries, and to
push
domestic 800
619,4
20%
i n f r a s t r u c t u r e
393,6
14,7%
development acceleration. 400
10%
167,0
The adoption of domestic
loan as an APBN financing
0
0%
2010
2011
2012 *)
instrument has been
APBNP
LKPP
% Realization (RHS)
started since 2010 with
*Per June 2012
Source: the Ministry of Finance
maximum ceiling Rp1.0
trillion per annum. Thus
far, this domestic loan has been used to support the financing of main weaponry system
procurements for Armed Forces and Police (TNI/Polri). Graph 6.13 shows that the average
realization of domestic loan withdraw for the last two years is relatively low, i.e. 41.0 percent.
In 2012, the realization of domestic loan withrdraw as of June has reached Rp167.0 billion
or 14.7 percent of total domestic loan withdraw budget set at Rp1.132.5 billion.
Financial Note and Indonesian Budget 2013
6-21
Chapter 6
Budget Deficit Financing and Fiscal Risk
Constraints hampering the optimum domestic loan withdraw are long time required to build
coordination and communication among the institutions engaged in planning through
implementation of a domestic goods and service procurement process. In addition, limited
technology and production capacity of BUMNIS in complying the completion target of
activity is also another obstacle. However, with the improving coordination and familiarity
of stakeholders involved in domestic loan financing, it is expected that the absorption of this
loan will be higher in future.
6.2.2.3 The Trend of Government Debt Portfolio
SBN issuance, loan
GRAPH 6.14
GOVERNMENT LOAN TO GDP TREND 2007-2012
withdraw, payment of
principal on due, debt
restructuring,
and 9.000
40%
8.542,6
35,2%
33,1%
exchange fluctuation are 8.000
7.427,1
28,3%
some factors that will 7.000
6.422,9
30%
5.613,4
affect
outstanding 6.000
4.951,4
26,1%
24,3%
Government debts. This 5.000 3.950,9
23,2% 20%
fluctuating outstanding 4.000
Government debts must 3.000
1.984,4 10%
1.803,5
1.636,7
1.676,9
1.589,5
2.000
1.389,4
be curbed and managed
1.000
in a manner that will
0%
bolster
economic
2007
2008
2009
2010
2011
2012*
growth. The correlation *) projection by end of 2012
GDP
Outstanding
Loan Ratio to GDP
source: the Ministry of Finance
of debt increase and
economic growth is
crucial to maintain fiscal sustainability. Well-controlled and managed debts are evident from
the lower debt ratio to GDP in phased as shown in Graph 6.14. The ratio of Government
debts to GDP by end 2012, which is projected to reach 23.2 percent, much lower than the last
position in 2007 at 35.2 percent, and this ratio is expected to further decline by end of 2012.
Based on original currency, the Government prefers to take new debts in rupiah and US
dollar. For Yen, this currency is more used to pay back the loans than to procure new loans.
However, from outstanding debts in Rupiah, it is obvious that debts in Yen record an increase.
It is due to the
TABLE 6.8
weakening
OUTSTANDING GOVERNMENT LOAN TREND BY CURRENCY, 2007 - 2012
R u p i a h
2007
2011
2008
2009
2010
2012*
exchange rate to Original Currency
- IDR (in trillion)
737.1
783.9
836.3
902.4
992.8
1,069.6
Yen. In detail, - USD (in billion)
28.4
32.8
37.1
40.5
43.7
47.8
2,941.9
2,820.5
2,713.8
2,689.8
2,585.4
2,515.6
- JPY (in billion)
the trend of - EUR (in billion)
7.2
6.7
6.0
5.4
4.7
4.8
- Other currencies
-------------------------- Multiple Currencies -------------------------o u t s t a n d i n g Equivalent to trillion Rp.
737.1
783.9
836.3
902.6
992.8
1,070.9
G o v e r n m e n t -- IDR
USD
267.1
358.6
348.6
364.1
396.7
453.4
JPY
244.4
341.9
276.0
296.6
302.0
300.9
debts
by - EUR
98.9
104.2
80.7
64.7
55.3
56.1
41.9
48.2
49.1
48.8
56.7
57.4
currency
is - Lainnya
Total
1,389.4
1,636.7
1,590.7
1,676.9
1,803.5
1,938.6
presented
in *) per end of June 2012
Source: the Ministry of Finance
Table 6.8.
6-22
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
For the last three years, the Government debts portfolio is more dominated by SBN instrument
especially domestic SBN. The issuance of foreign currency SBN will be taken as complement
to the increasingly financing needs that can’t be obtained from domestic sources. Details of
Government debt position by instruments are presented in Table 6.9 that follows.
TABLE 6.9
OUTSTANDING GOVERNMENT LOAN TREND BY INSTRUMENTS
2007-2012
2007
Type of Instrument
2008
2009
2010
2011
2012*
a. Loans
1). Foreign Loan
Bilateral
Multilateral
Commercial
Suppliers
2). Domestic Loan
586.4
586.4
386.5
179.5
19.6
0.8
-
730.2
730.2
484.9
222.7
21.7
1.0
-
611.2
611.2
387.9
202.4
20.2
0.7
-
612.4
612.3
376.6
208.0
27.1
0.6
0.2
615.8
615.0
377.6
211.9
25.1
0.5
0.8
624.5
623.2
380.5
218.1
24.2
0.5
1.3
b. Government Bond (SBN)
Foreign currency denomination
Rupiah denomination
803.1
65.9
737.1
906.5
122.6
783.9
979.5
143.1
836.3
1,064.4
162.0
902.4
1,187.7
195.6
992.0
1,314.1
244.6
1,069.6
1,389.4
1,636.7
1,590.7
1,676.9
1,803.5
1,938.6
Total Central Government Loan
*) position per June 2012
Source: the Ministry of Finance
6.3 Budget Financing Plan for 2013
In APBN 2013, the budget deficit is set at Rp153.3 trillion or 1.65 percent of GDP. Budget
financing to cover such deficit comes from loan and non-loan sources. Financing from nonloan sources is expected to record negative Rp8.1 trillion in netto. Meanwhile net financing
from loans will reach Rp161.5 trillion. Since non-loan financing sources in 2013 are relatively
limited, the Government will still rely on loan sources to cover budget deficit in APBN 2013.
Details of budget financing by non-loan financing sources are presented in Table 6.10.
TABLE 6.10
BUDGET FINANCING, 2012 - 2013
(trillion rupiah)
Description
APBNP
2012
APBN
2013
A. GOVERNMENT REVENUE
1,358.2
1,529.7
B. GOVERNMENT EXPENDITURE
1,548.3
1,683.0
C. BUDGET DEFICIT/SURPLUS (A - B0
% Deficit to GDP
D. BUDGET FINANCING (I + II)
I.
Non-Loan
II. Loan
(190.1)
(153.3)
(2.23)
(1.65)
190.1
153.3
33.9
156.2
(8.1)
161.5
Source: the Ministry of Finance
Financial Note and Indonesian Budget 2013
6-23
Chapter 6
Budget Deficit Financing and Fiscal Risk
6.3.1 Non-Loan Financing
Budget Financing from non-loan sources in 2013 will come from: (1) domestic banks, i.e.
from the installments of SLA payment and Budget Surplus (SAL); and (2) non-domestic
bank, i.e. from asset management proceeds, Government investment fund, national education
development fund, guarantee obligations, and financing reserves.
These non-loan financing sources in 2013 are a little bid different from the previous years.
This difference is from the availability of funds of individual financing sources and policy
taken by the Government in spending such funding sources. In 2013, policies on non-loan
financing are including:
1.
The use of SAL proceeds, especially to anticipate potential SBN market crisis and to finance
budget deficit;
2. Focus the use of Government investment fund, notably to develop the investment capacity
of the Government including the rights of Government derived from agreements/
cooperations, such as from the the takeover of PT Inalum;
3. The allocation of PMN fund to SEOs aimed at SOEs performing assignments/policies for
the provision of public interests such as the provision of high quality goods and/or services
to serve the lives of people in general and to support the Government’s policies in promoting
infrastructure development;
4. PMN to international financial organizations/agencis is aimed at maintaining the
percentage of share ownership and to increase capital in international financial agencies,
where Indonesia plays relatively significant roles/influence;
5. Other PMM is to meet the obligations as a member of ASEAN Infrastructure Fund (AIF)
in order to get maximum outcomes for national interests and to maintain the ownership
of shares and voting rights and the opening capital for BPJS establishment;
6. Improve governance and investment allocation and PMN to SOEs in selected manner;
7.
Additional revolving fund to reinforce business capital of cooperatives, micro, small and
medium enterprises, assist low-income people to access affordable houses, and support
exploration activities for geothermal power plant development to be built under Public –
Private Partnership (PPP) scheme;
8. Fund allocation of obligation guarantee to the credits secured by the Government.
Budget financing from non-loan sources in APBN 2013 is planned to reach negative Rp8.1
trillion. This negative non-loan financing shows that the expenditure of financing from nonloan sources outnumbers its revenue. The non-loan based budget financing in APBN 2013
composes of: (1) installment of SLA payment Rp4.3 trillion; (2) SAL proceeds Rp10.0 trillion;
(3) asset management proceeds Rp475 billion; (4) Government investment fund negative
Rp12.2 trillion; (5) national education development fund negative Rp5.0 trillion; (5) guarantee
obligations negative Rp706.0 billion; and (6) financing reserves negative Rp5.0 trillion.
Comparison of budget financing with non-loan sources in APBNP 2012 and APBN 2013 is
presented in Table 6.11.
6-24
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
TABLE 6.11
NON-LOAN BASED FINANCING, 2012 - 2013
(trillion Rupiah)
DESCRIPTION
1.
Domestic Banks
a. SLA installment
b. Budget surplus balance
2. Domestic Non-Banks
a. Asset Management Proceeds
b. Government Investment Fund
i. Government Investment Center (PIP)
ii. State Capital Participation (PMN)
iii. Revolving Fund
c. National Education Development Fund
d. Guarantee Obligations
e. Investment financing reserve for the takeover of PT Inalum
Total
APBNP 2012
APBN 2013
60.6
14.3
4.4
56.2
4.3
10.0
(26.6)
(22.5)
0.3
(19.3)
(3.3)
(8.9)
(7.0)
(7.0)
(0.6)
0.5
(12.2)
(1.0)
(6.4)
(4.8)
(5.0)
(0.7)
-
(5.0)
33.9
(8.1)
Source: the Ministry of Finance
6.3.1.1 Domestic Banking
Non-loan financing from domestic banking comes from the installment of SLA payment
and Budget Surplus (SAL).
6.3.1.1.1 The Installment of SLA Payment
Payment from SLA installment for budget financing in APBN 2013 is anticipated to reach
Rp4.3 trillion. This sum is 30.1 percent of total budget financing of APBN 2013 from domestic
banking. To optimize the financing revenue from SLA installment, the loan repayment will
be collected according to the maturity dates of loans concerned. This effort is supported with
routine loan data management and reconciliation system with other related units to get the
most accurate date on revenue.
In addition, revenue from SLA repayment will be also optimized with state receivable
settlement program in SOEs, Regional Governments and PDAMs. This State Receivable
Settlement Program policy is not only to optimize the revenue, but also for debtor restructuring
(SOEs. Regional Governments, and PDAMs) so that they can perform their business/service
activities to the communities in more optimum manner. With the bolstering financial
conditions after following restructuring program, these debtors are expected to comply with
their debt services according to the agreed commitments.
6.3.1.1.2 Budget Surplus (SAL)
The use of budget surplus (SAL) in APBN 2013 is expected to amount Rp10.0 trillion or 69.9
percent of total domestic banking. It is subject to budget financing needs and cash in
Government’s accounts.
Financial Note and Indonesian Budget 2013
6-25
Chapter 6
Budget Deficit Financing and Fiscal Risk
6.3.1.2 Domestic Non-Banking
Non-loan financing from domestic non-banking consists of Asset Management Proceeds,
Government Investment Fund, National Education Development Fund, Guarantee
Obligations and Investment Financing Reserve for the takeover of PT Inalum.
6.3.1.2.1 Asset Management Proceeds (HPA)
Target of asset management proceeds to be used for budget financing in APBN 2013 is planned
to reach Rp475.0 billion. This target will be met from asset management proceeds of
Directorate General of State Assets (DJKN) of the Ministry of Finance Rp375.0 billion and
PT PPA Rp100.0 billion or 78.9 percent and 21.1 percent of total HPA respectively.
The targeted asset management proceeds in 2013 are especially coming from assets managed
by DJKN as a result of management optimizing and the plan of obligor transfer under
Shareholders’ Obligation Settlement (PKPS) to State Receivable Committee (PUPN). Asset
management policies taken in 2013 are: (1) asset management in accountable, transparent,
free-of-interest and corruption manner; (2) to take legal actions for default and uncooperative
obligors; (3) to optimize asset management proceeds while taking legal certainty into
consideration; and (4) asset management under the available mechanism and instruments.
To exercise these policies, activities to be performed are: (1) collection of credit assets by State
Receivable Committee; (2) sales of property and share assets; (3) use of property assets; (4)
status on the use of proterty assets in the Ministries/Agencies (K/L); and (5) right waiver
with compensation to the property assets used for public interests.
Meanwhile, asset management by PT PPA will be made under Asset Management Agreement
effective since 1 January to 31 December and renewed for the next period. The assets of exBPPN transferred to PT PPA for the management in 2013 will consist of share assets and
credits of Tuban Petro group, i.e. the payment of coupons and parts of principal installments
on due in Semester I (February) and Semester II (August) 2013. HPA revenue from PT PPA
is dependent on process and settlement/restructuring within Tuban Petro Group.
6.3.1.2.2 Government Investment Fund
TABLE 6.12
Financing of Government
GOVERNMENT INVESTMENT FUND, 2012 - 2013
(trillion rupiah)
Investment Fund is cash outflow
character implying financing
DESCRIPTION
APBNP 2012
APBN 2013
expenditure. Fund expended for
1. Government Investment Center (PIP)
(3.3)
(1.0)
Government investment in
a. Government Investment Center (Regular)
(1.3)
(1.0)
b. PT Inalum Takeover
(2.0)
APBN 2013 is expected to
(8.9)
(6.4)
Capital Participation (PMN)
amount Rp12.2 trillion or 54.4 2. State
a. PMN to SOEs
(8.0)
(4.5)
b. PMN to International Finance Organization /
(0.5)
(0.5)
percent of total domestic nonInstitution (LKI)
banking. The allocation of
c. Other PMN
(0.4)
(1.4)
(7.0)
(4.8)
Government investment fund in 3. Revolving Fund
APBN 2013 will be used for: (a)
Total
(19.3)
(12.2)
Government Investment Center Source: the Ministry of Finance
Rp1.0 trillion; (b) PMN Rp6.4 trillion; and (c) revolving fund Rp4.8 trillion. The comparison
of Government Investment Fund in APBNP 2012 and APBN 2013 is presented in Table
6.12.
6-26
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
A. Government Investment Fund (PIP)
In APBN 2013, the Government allocates budget for Government Investment Center (PIP)
Rp1.0 trillion or 8.2 percent of total Government Investment Fund.
This regular Government Investment Center channelling in 2013 are, among other things,
(1) to give support for projects indicated in Public Private Partnership (PPP) Book, including
land acquisition projects under MP3EI; (2) to extend loans to SOEs, private and other loans
for eco-investments; (3) to grant working capital and investments to infrastructure sectors
being the priorities of the Government, i,e, energy/hydro power, transportation, irrigation,
roads and bridges and to eco-sectors; (4) loans to regional government to accelerate the
development of basic infrastructure in regions including roads, bridges, market, general
hospitals, water supply and terminal; (5) capital participation consisting of subsidiary capitals
in eco-investment, biomass project and waste to energy.
B. State Capital Participation (PMN)
In APBN 2013, the Government will allocate budget for PMN Rp6.4 trillion or 52.3 percent
of total Government Investment Fund. PMN in APBN 2013 consists of: (1) PMN to SOEs
Rp4.5 trillion; (2) PMN to International Financial Organizations/Institutions (LKI) Rp507.6
billion; and (3) Other PMN Rp1.4 trillion.
PMN to SOEs
In APBN 2013 the Government will allocate budget for PMN to SOEs Rp4.5 trillion or 70.4
percent of total PMN. These proceeds will be further distributed to PT Askrindo and Perum
Jamkrindo (KUR) Rp2.0 trillion, PT Perusahaan Pengelola Aset (PT PPA) Rp2.0 trillion and
PT Geo Dipa Energi Rp500.0 billion. The breakdowns of PMN to SOEs in 2012 and 2013 are
presented in Table 6.13.
TABLE 6.13
PMN TO SOE, 2012 - 2013
(billion rupiah)
NAME OF SOE
APBNP 2012 APBN 2013
1. PT Penjaminan Infrastruktur Indonesia
(1,000.0)
-
2. PT Sarana Multi Infrastuktur
(2,000.0)
-
3. PT Askrindo dan Perum Jamkrindo (KUR)
(2,000.0)
4. PT Dirgantara Indonesia (Persero)
(1,000.0)
-
5. Perusahaan Penerbit SBSN Indonesia IV
(0.1)
-
6. Perusahaan Penerbit SBSN Indonesia V
(0.1)
-
(2,000.0)
-
7. BUMN strategis lainnya
(2,000.0)
8. PT Perusahaan Pengelola Aset
-
(2,000.0)
9. PT Geo Dipa Energi
-
(500.0)
Total
(8,000.2)
(4,500.0)
Source: the Ministry of Finance
Financial Note and Indonesian Budget 2013
6-27
Chapter 6
Budget Deficit Financing and Fiscal Risk
PMN to PT Askrindo Perum Jamkrindo in APBN 2013 is planned to record Rp2.0
trillion with a view to improving business capacity, and reinforcing capital structure of PT
Askrindo and Perum Jamkrindo, for KUR (People’s Business Credit) Guarantee to assure
the sustainability and development of real sectors by micro, small and medium enterprises
(UMKM).
Additional PMN to PT Askrindo and Perum Jamkrindo is an attempt to continue KUR
program revitalization that had been commenced in 2010. This KUR program revitalization
is crucial in view of great contribution of UMKM to the national economy. At present UMKM
still faces a lot of constraints and limitations, such as: (1) human resources capacity;
(2) marketing network and coverage; (3) technology capacity; (4) access to credit/financing
sources from banks; and (5) capacity in providing collaterals.
Inpres No. 6 of 2007 concerning Real Sector Development Acceleration and UMKM
Empowerment was issued for UMKM empowerment, employment generation and poverty
alleviation. UMKM empowerment policy covers: (1) broader access to financing sources;
(2) enterpreneurship development; (3) UMKM product marketing expansion; and (4) UMKM
regulation reform. KUR is a program to broaden access to financing sources of banking
institutions with guarantee scheme. KUR channelling in 2012 significantly increased, hitting
Rp29.0 trillion, or to rise by 68.6 percent than last year’s performance at Rp17.2 trillion or 45
percent higher than target set in 2011 at Rp20 trillion with total UMKM debtor 1.9 million.
To assure well-targetted beneficiaries, the Government will allocate PMN to guarantee KUR
program based on the performance/achievement and conditions of PT Askrindo andPerum
Jamkrindo.
PMN to PT PPA in APBN 2013 is allocated to amount Rp2.0 trillion. PT PPA was established
by the Government on 27 February 2004 under Government Regulation No. 10 of 2004
tasked to manage the assets of ex-Indonesia Banking Restructuring Agency (IBRA), which
were free from legal disputes. In the next progress, under Government Regulation No. 61 of
2008, the Government expanded the objectives and purposes of PT PPA with additional
scopes consisting of new tasks assigned to PT PPA including: (1) the management of assets
of ex-IBRA; (2) SOE restructuring and/or revitalization; (3) investment activities; and
(4) SOE asset management.
To perform SOE restructuring and revitalization tasks, the Government allocated PMN
proceeds to PT PPA in 2008 and 2009 of restpectively Rp1.5 trillion and Rp1.0 trillion. Through
end of May 2012, PT PPA has extended these SOE restructuring and revitalization proceeds
worth Rp1.7 trillion in the form of loans and capital participation to 5 SOEs, namely, PT
Merpati Nusantara Airlines, PT PAL Indonesia, PT Waskita Karya, PT Dirgantara Indonesia,
and PT Industri Gelas. In addition, PT PPA also provides bridging capital to 7 SOEs for
restructuring/revitalization purposes to assure their well-advanced business operation in
ammount of Rp268.5 billion. These SOEs are PT Kertas Kraft Aceh, PT Industri Sandang
Nusantara, PT Industri Kapal Indonesia, PT Djakarta Lloyd, PT Survey Udara Penas, and
PT PAL Indonesia.
In view of the limited fund of PT PPA, in 2013, the Government plans to allocate additional
PMN proceeds to PT PPA. The proceeds will be used to reinforce the capital structure and
budiness capacity of PT PPA. For SOEs retructuring/revitalization, asset and investment
management PT PPA needs capital reinforcement for among other things, the revitalization
6-28
Financial Note and Indonesian Budget 2013
Budget Deficit Financing and Fiscal Risk
Chapter 6
of SEOs engaged in construction, shipbuilding and navigation business development, financial
service development, aviation industry business development, including the maintainance,
repair and overhaul, and investments in the assets of SOEs engaged in property sector.
PMN to PT Geo Dipa Energi in APBN 2013 has been set at Rp500.0 billion. PT Geo Dipa
Energi was established since 2002 and engaged in geothermal power generation sector. PT
Geo Dipa Energi was originally a subsidiary of PT PLN (Persero) and PT Pertamina (Persero).
In later progress, to more focus on geothermal development in Indonesia, PT Geo Dipa
Energy was changed to SOE in 2011. For the next 5 years, PT Geo Dipa Energi will build 2
units of geothermal power generation plants (PLTP) in Patuha and two units of PLTPs in
Dieng. These four PLTPs will have capacity of 55 MW each. Total funds required for the
development of the said four PLTPs reach more than USD670 million. This fund requirement
is expected to be covered from various sources inclusive of internal cash, grant proceeds,
participation of strategic investors and commercial loans. To start this development, PT Geo
Dipa Energi needs internal cash of nearl USD102 million for initial preparation (2 percent),
land acquisition (14 percent) and production well boring and injection wells (84 percent).
PMN proceeds in PT Geo Dipa Energy will be used to support PLTP Dieng and PLTP Patuha.
State Capital Participation to International Financial Organizations/
Institutions (LKI)
Apart from some SOEs, the Government also plans to allocate PMN proceeds in 2013 to
several international financial organizations/institutions (LKI) in amount of Rp507.6 billion
or 7.9 percent of total PMN with breakdowns as presented in Table 6.14.
TABLE 6.14
PMN TO ORGANIZATIONS/LKI, 2012 - 2013
(billion rupiah)
DESCRIPTION
1. The Islamic Corporation for the Development of Private Sector (ICD)
APBNP
2012
APBN
2013
(9.0)
(9.0)
2. Asian Development Bank (ADB)
(353.3)
(353.3)
3. International Bank for Reconstruction and Development (IBRD)
(147.8)
(108.6)
- Promisory note disbursement
(39.2)
- IBRD GCI (General Capital Increase)
(66.8)
(66.8)
- IBRD SCI (Selected Capital Increase)
(41.8)
(41.8)
(8.2)
(8.2)
(19.0)
(4.6)
(28.5)
-
(541.9)
(507.6)
4. International Finance Corporation (IFC)
5. International Fund for Agricultural Development (IFAD)
6. International Development Association (IDA)
Total
-
Source: the Ministry of Finance
The Islamic Corporation for the Development of Private Sector (ICD) was
established with objectives of identifying opportunities in private sectors that can be used to
boost their growth and provide a full range of productive financial and service products. In
addition, ICD also moblizes resources for syariah and capital market development.
Financial Note and Indonesian Budget 2013
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Budget Deficit Financing and Fiscal Risk
The benefits enjoyed by Indonesia from ICD membership are: (1) loan USD10 million to PT
Mandala Multifinance and USD20 million for finance institutions; (2) the signing of Mou
between ICD and PT Jamsostek and PT SMI for the establishment of Islamic Invesment
Fund dan Islamic Infrastructure Invesment; and (3) fund allocation of USD13 million to
Powertel to build backbone of telecommunication infrastructure.
To support this private sector financing, Indonesia also participates in increasing the ICD
capital. Pursuant to article agreement of ICD, Indonesia has opportunity to subscribe 475
shares or equivalent to USD4.75 million that can be repaid in five installments or USD950.0
thousand per installment starting from 2009. The Minister of Finance with a letter Number
S-739/MK.011/2009 of 2 December 2009 agreed to participat in augmenting ICD capital.
The payment by the Government was made through APBNP in amount of Rp28.5 billion as
the first instalmment until the third installment in 2009-2011 period. The fourth installment
was Rp9.0 billion allocated in APBN 2012, and the fifth or the final installment of Rp9.0
billion will be allocated in APBN 2013.
Asian Development Bank (ADB) is a multilaterial financial institution for regional
development dedicated for poverty alleviation in Asia and Pacific countries. ADB is the largest
financial institution after World Bank with total assets USD143.9 billion. Indonesia holds
5.4 percent shares (USD292 million) as the sixth largest shareholder after Japan and USA
(respectively 15.57 percent), China (6.4 percent), India (6.3 percent), and Australia (5.7
percent).
As a large shareholder, Indonesia gains some benefits from ADB membership consisting of
loans extended by this institution to developing countries. Indonesia is the largest borrower
along with China and India. Dominant sectors receiving ADB loans are public sector
management 17.2 percent, agriculture 15.3 percent, energy 14.5 percent and financial sector
14.4 percent.
Some advantages of financing from ADB are: (1) ADB has comparative advantages in
provising low-cost loans for transport and communication, social infrastructure, and financial
sectors; (2) focus of financing on public sector of fostering environment conducive for private
investments; and (3) grants and capacity building provision.
Based on Decision of Board of Governor (BoG) during the 42nd ADB Annual Meeting in
Bali, BoG agreed to increase the capital (general capital increase) of 200 percent. Of this
increase, 4 percent would be paid in cash (paid in). Indonesia is obliged to add capital
participation worth USD185.97 million or equivalent to Rp1.9 trillion that would be paid in 5
years since 1 April 2010. With regard to this respect, in 2013, the Government plan to earmark
PMN proceeds as the fourt installment of such ADB general capital increase, i.e. Rp353.3
billion.
International Bank for Reconstruction and Development (IBRD) is an international
financial institution under World Bank providing loans for the development and progress of
developing countries. Along with ADB, World Bank is the largest multilateral institution in
Indonesia. Moreover, IBRD is also the largest creditor for Indonesia to cover budget deficit
at multilateral cooperation. As of 2011, Indonesia has received loans from IBRD totalling
USD9.97 billion.
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Chapter 6
During the summit of World Bank members in April 2010 it was agreed to increase the
capital of World Bank. Indonesia would participate in this General Capital Increase (GCI)
with capital participation worth USD35.5 million and Selected Capital Increase (SCI) of
USD22 million. The Government plans to pay this committed capital participation in 5
installments from 2012 to 2016.
GCI is a capital increase charged to all country members to fortify IBRD capital. SCI is
capital increase charged to certain countries becuase of their economic growth or increasing
wealth. Indonesia is one of countries with rapid economic growth and as such qualifies to
receive additional capital participation/voting rights in SCI. In 2013, Indonesia will allocated
the second installment of GCI and SCI worth of respectively USD7.03 million or Rp66.8
billion and USD4.4 million or Rp41.8 billion. Given that, in 2013 the Government plans to
allocate PMN proceeds ti IBRD totalling Rp108.6 billion.
International Finance Corporation (IFC) is a financial institution engaged in private
sector financing under World Bank group. The objectives of establishing IFC are: (1) to
develop open and competitive markets in development countries; (2) to support corporate
and private sector financing; (3) to assist in generating productive employment; and (4) to
catalize and mobilize fund sources for private company development.
On 9 March 2012, during Spring Meeting IMF-World Bank, Board of Government adopted
the Resolution Number 256 titled “Amendment to the Articles of Agreement and 2010
Selective Capital Increase” (SCI Resolution) that would take into effect since 27 June 2012.
The resolution increased the authorized capital IFC by USD130 million with the emission of
130,00 shares at par value USD1,000/share. To date the Indonesia’s capital participation in
IFC reaches USD28.54 million or 1.20 percent. With such increase, the Indonesia’s shares
will be potentially to drop to 1.11 percent. To prevent it, Indonesia must pay more capital
worth USD3.06 million. This capital participation can be paid in installments but may not
exceed 3 years time since the effective date of the above resolution of IFC’s BoG. Indonesia
will pay in three installments from 2012 to 2014. The first and second installments are
respectively USD1.4 billion. Thus, in 2013 Indonesia plans to pay the second installment of
USD858 thousand or Rp8.2 billion.
International Fund for Agricultural Development (IFAD) is a special agency of United
Nation established as a financial institution tasked to finance agriculture development. In
performing its activities, IFAD will work together with the Government, donors, nongovernment organizations and other parties. IFAD focuses on country specific solutions aiming
to improve the access of poor people to financial services, markets, technology, lands and
natural resources. IFAD activities will refer to Strategic Framework that will be updated
every four years with a view to: (1) strengthening the capacity of isolated people including
their institutions; (2) improving access to productive natural resources; and (3) expanding
access of poor people to financial services and production markets.
Until 2011, total capital participation of Indonesia to IFAD has amounted USD49.959 million.
During IFAD meeting in December 2011, the Government of Indonesia agreed and
committed to increase contribution in IFAD by USD10 million that would be paid in three
years time from 2013 to 2015, i.e. USD 3 million in 2013 and 2104 and the other USD4
million in 2015. This new commitment has been forwarded during the fourth meeting
Financial Note and Indonesian Budget 2013
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Budget Deficit Financing and Fiscal Risk
replenishment IX in December 2011 in Rome. In 2013, the Government has allocated the
first installment of replenishment IX by USD3 million or Rp28.5 billion.
Other State Capital Participation (PMN)
Other State Capital Participation (PMN) is PMN that can’t be classified as PMN to SOEs,
and PMN to LKI. In 2013, the Government will allocate other PNM in amount of Rp1.4
trillion or 21.6 percent of total PMN with breakdowns as presented in Table 6.15.
TABLE 6.15
OTHER PMN, 2012 - 2013
(billion rupiah)
DESCRIPTION
1
APBNP 2012 APBN 2013
Social Security Provider (BPJS) - Health
-
(500.0)
2 Social Security Provider (BPJS) - Manpoer
-
(500.0)
3 ASEAN Infrastructure Fund (AIF)
Total
(380.0)
(380.0)
(380.0)
(1,380.0)
Source: the Ministry of Finance
PMN to Social Security Organizing Agency (BPJS) for Health Sector in APBN 2013 is
planned to amount Rp500.0 billion and another Rp500.0 billion for BPJS for Manpower
Sector. BPJS is a legal entity estabished to run social security program to provide social
protection and to assure the all people can meet their decent basic needs. According ot Law
No. 24 of 2011 concerning BPJS, BPJS shall consist of BPJS for Health Sector delivering
health insurance program and BPJS for Manpower Sector running occupational accident
insurance program, old day program, pension insurance and life insurance.
BPJS of Health Sector and BPJS of Manpower Sector are planned to operate their social
security program starting from 1 January 2014. In thier operation, BPJS will manage BPJS’
assets and social scurity fund assets in separate manner. One of BPJS’ assets is from opening
capital of the Government as a separated state asset, and not consists of shares.
PMN to ASEAN Infrastructure Fund (AIF) in APBN 2013 is planned to reach Rp380.0
billion. AIF is a private company established by ASEAN countries and ADB as financing
source for infrastructure projects in ASEAN benefiting domestic resources and liquidity surplus
in Asian region.
Of opening capital USD800 million, Indonesia plans to contribute USD120.0 million as capital
participation that will be paid in three times starting from 2011 to 2013. However, payment
to AIF through APBN 2011 was not realized due to delayed AID account opening and
provision. In light of that, in 2013 Indonesia will allocate PMN for the second installment.
C. Revolving Fund
The Government allocates budget for revolving fund in APBN 2013 in amount of Rp4.8
trillion or 39.6 percent of total Government Investment Fund with the breakdowns as
presented in Table 6.16.
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Chapter 6
TABLE 6.16
REVOLVING FUND, 2012 - 2013
(billion rupiah)
URAIAN
1. Revolving Mangement Body for Cooperative, Micro, Small and
Medium Enterprises (LPDB KUMKM)
2. Toll Road Regulator Body (BPJT)
3. Housing Finance Center
4. Geothermal
Total
APBNP 2012 APBN 2013
(557.7)
(900.0)
(1,000.0)
-
(4,709.3)
(2,709.3)
(876.5)
(1,126.5)
(7,043.4)
(4,835.8)
Source: the Ministry of Finance
The allocation of revolving fund for LPBD KUMKM in APBN 2013 is expected to reach
Rp1.0 trillion, or 47.0 percent of total revolving fund. This KUMKM revolving fund will be
used to give stimulus for cooperatives and micro, small and medium enterprises (KUMKM)
to reinforce their capital. Revolving fund of LPBD KUMKM is extended to primary
cooperatives, secondary cooperatives, banks and strategic UMKM.
Policies adopted for the extension of LPDB KUMKM revolving fund in 2013 are as follows:
(1) the proportion of revolving fund through cooperatives to reach 90 percent, and the
remaining 10 percent to be distributed via non-cooperative intermediary institutions. The
proportion of revolving fund distributed through cooperatives in a province will be based on
the number of active cooperatives in the province concerned as support to micro, small and
cooperative enterprises; (2) supporting priority programs developed by the Ministry of
Cooperative and SME (Small and Medium Enterprises), such as SME centers/clusters, One
Village One Product (OVOP), and other programs that have been assessed successful and
entering development stage; (3) supporting Government’s policy in the promotion of superior
commodities, exports, creative industries, productivity improvement and people’s economic
competitiveness enhancement, new entrepreneurs, employment generation, and people’s
income augmentation.
These policies are to show: (1) great concern of the Government in promoting people’s
economy through KUMKM sector; (2) the distribution of revolving fund via cooperatives
will generate immediate impacts of prosperity augmentation to the members and employment;
(3) improved cooperatives in terms of quality and quantity thanks to numerous active
cooperatives that as of 31 December 2011 record 133,237 units with 30,849,913 members;
(4) cooperatives distributed throughout the country and as economic forum for the
overwhelming rural communities; and (5) reducing social and economic gaps of regions.
The Government allocate revolving for Home Financing Center (PPP) in APBN 2012 in
amount of Rp2.7 trillion or 56.0 percent of total revolving fund. This PPP revolving fund will
be used to finance home financing liquidity facility program (FLPP). With this FLPP policy
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it is expected that the credit interest for home financing to low-income people (MBR) will be
lower (one digit) and applicable during the term of credits. Thus, the interest rate and
installment of home loans will be more affordable and the purchasing power of low-income
people (MBR) will increase so that they can access decent houses at affordable price. FLPP
program is the revision to KPR interest subsidy applied in the past. Under interest subsidy
scheme, MBR only received low interest rate during the installment periods. With FLPP
program at certain period the home financing aids allocated from APBN can be decreased
and even stopped, while the shelter need of MBR can be fulfilled in better way. Because
under this scheme, the fund revolved to the people and has been returned will be redistributed
to other benecifiaries requiring the same aid.
Some policies taken by the Government to expedite PPP revolving fund are: (1) to lower
KPR (Home Loan) interest rate charged to MBR from originally 8.15 percent to 7.25 percent;
(2) to increase the portion of Government’s fund blended with the implementing banks with
composition previously 60 percent : 40 percent to 70 percent : 30 percent; (3) to adjust the
price of houses financed under FLPP program subject to construction cost index applicable
for each region; (4) to extend the term of KPR installments from 15 years to 20 years; (5) to
adjust the price of houses free from PPN tax subject to the limits of house prices applicable
for each region; (6) to develop Affordable KPR scheme policy for the target groupts deprived
from access to financing institutions and banks (nonbankable); (7) to intensify socialization
of FLPP program policy to the communities or financing intitutions/implementing banks
channeling FLPP.
In APBN 2013 the Government will allocate revolving fund for geothermal to support
exploration of geothermal power generation plant development in amount of Rp1.1 trillion
or 23.3 percent of total revolving fund. The fund is to finance preliminary activities to
exploration stage of geothermal power generation plant development under Public Private
Partnership (PPP) schme.
Indonesia keeps the largest geothermal reserve aroung the world, i.e. 40 percent. However,
of 29,000 MW geothermal reserves in this country only 4 percent have been exploited to
date. Geothermal power generation plant (PLTP) has a lot of advantages if compared with
fossil fueled power generation plants including more environmentally friendly, and stable
geothermal price during concession period and not sensitive to the fluctuation of oil price.
During 2003 – 2012 the Government has introduced a number of policies so as to support
the acceleration of geothermal development with, for example, the issuance of some
regulations. However, this effort of speeding up geothermal development is not yet fully
particularly due to uncertain data as a result of no complete geothermal exploration activity.
With this exploration it is expected the comprehensive, valid and adequate initial survey
findings will be collected. The data are then used as basis in preparing bid documents of
Mining Work Area (WKP) especially to set the selling price of electricity.
Geothermal exploration will require time of more than one year. Given that, Government
funding scheme that can accommodate multi year funding requirement is deemed necessary
and however must be skillfully maintained in a manner that will not generate excessive
financial burdens to APBN. Funding scheme that meets such requirements is that of revolving
fund managed by a working unit (satker) of BLU. According to Decree of Finance Minister
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Chapter 6
Number 286/MK.011/2011, the Government Investment Center has been assigned as
institution responsible for the management of geothermal revolving fund.
The allocation of geothermal revolving fund aims to: (1) abate electricity subsidy fluctuation;
(2) enhance the bargaining position of the Government in offering WKP geothermal to
investors; and (3) encourage the interests of investors in geothermal development in Indonesia,
especially outside Java.
6.3.1.2.3 National Education Development Fund
In APBN 2013, budget allocated for National Education Development Fund is expected to
reach Rp5.0 trillion. National Education Development Fund (DPPN) is part of 20 percent of
education budget to accumulate endowment fund for the sustainability of education program
for the next generation as an expression of inter-generation accountability, and education
reserve fund to anticipate rehabilitation requirements for the damaged education facilities
due to natural disaster and carried out by Public Service Agency (BLU) responsible for the
management of fund in education sector. The management of education fund starting from
the end of 2011 has been performed by Education Fund Management Agency (LPDP)
constituting a working unit (satker) within the Ministry of Finance introducing BLU financial
management pattern. LPDP according to Regulation of Finance Ministry Number 252/
PMK.01/2011 concerning the Organization and Procedure of LPDP has been granted with
mandate to manage and channel National Education Development Fund.
As the ultimate shareholders responsible for the formulation of policies as foundation for
LPDP, LPDP is equipped with Board of Patrons consisting the Minister of Finance, the Minister
of Education and Culture, and the Minister of Religions and as the longarm of shareholders
Board of Supervisors will be established to ensure that LPDP runs the tasks and functions
according to the established regulations. Board of Supervisors of LPDP consists of the Secretary
General of the Ministry of Finance, the Secretary General of the Ministry of Education and
Culture and independent elements.
The National Education Development Fund to be granted to the communities either to finance
education program or rehabilitation of damaged education facilities by natural disaster will
be only the yield earned from DPPN management. It is in comformity with Regulation of
Finance Minister Number 238/PMK.05/2010 concerning Procedure for the Provision,
Disbursement, Management and Accountability of Endowment Fund and Education Reserve
Fund. The proportion of DPPN proceeds to be used to finance education program and to
rehabilitate the damaged education facilities shall be established by Board of Patrons.
Meanwhile, DPPN obtained from APBN every year will become principal fund as endowment
fund. Thus, the amount of DPPN proceeds will never reduce, and even constantly accumulate
in line with additional fund allocation from APBN.
6.3.1.2.4 Guarantee Obligations
In APBN 2013, budget for Government guarantee obligations is allocated to amount Rp706.0
billion for the implementation of several activities as presented in Table 6.17.
Financial Note and Indonesian Budget 2013
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Chapter 6
Budget Deficit Financing and Fiscal Risk
TABLE 6.17
GOVERNMENT GUARANTEE OBLIGATION, 2012 - 2013
(billion rupiah)
Guarantee
APBNP 2012
APBN 2013
1. PT. PLN (Persero)
Coal Fuelled Power Generation
Development Acceleration for
10,000 MW Project Stage I
Perpres No.86 tahun 2006
(623.3)
(611.2)
2. PDAM
Water Supply Acceleration
Project
Perpres No.29 tahun 2009
(10.0)
(35.0)
3. PLTU Jawa Tengah
Public - Private Partnership
Based Projects for
Infrastructure Guarantee
Perpres No.78 tahun 2010
-
(59.8)
Total
Activity
Legal Basis
(633.3)
(706.0)
Source: the Ministry of Finance
In 100,000 MW project stage I, the Government will give full guarantee for the payment of
PT PLN (Persero)’s liabilities to banking creditors extending loans/credits. At such
Government’s guarantee, if PT PLN (Persero) commits default, the Government as the
guarantor will pay the liabilities of PT PLN (Persero) to creditors. Thereafter, the realized
payments by the Government will be charged as Government loans to PT PLN (Persero).
For water supply acceleration program, the Government will provide guarantee of 70 percent
to the repayment of PDAM investment credits to banking creditors. However, this 70 percent
guarantee will be shared between the Government and regional government, in which 40
percent will become PDAM’s debts and the other 30 percent of total PDAM liabilities will be
charged to the regional government in case of default by PDAM. This guarantee aims to
encourage national banks in extending investment credits to PDAM.
Budget for gurantee obligations for infrastructure projects under PPP scheme is allocated to
enhance credit worthiness of the projects so that participation of private sectors in
infrastructure development in Indonesia will increase. In infrastructure project with PPP
scheme, i.e. PLTU in Central Java, the guarantee is provided with co-guarantee of the
Government and PT Penjaminan Infrastruktur Indonesia (PT PII). The guarantee is made
by sharing the claims (amount sharing) with first loss basis, in which PT PII shall first pay
the claims up to Rp300,0 billion, and the rests will be charged to the Government. This kind
of guarantee is provided in view of potential default by PT PLN (Persero) to Independent
Power Producers. The realization of gurantee payment by the Government will be calculated
as regress rights of the Government to PT PLN (Persero).
6.3.1.2.5 Financing Reserve for the Takeover of PT Inalum
The take over of PT Indonesia Asahan Aluminium (Inalum) in 2013 is planned to amount
Rp5.0 trillion. On 7 July 1975 the Government of Indonesia and Japanese investors signed
Master Agreement (MA) for Asahan Project with the establishment of PT Inalum and capital
composition of Government of Indonesia USD378 million (41.1 percent) and Japan USD542
million (58.9 percent). Based on the said Master Plan, the cooperation would expire on 31
October 2013. The Government decides not to extend the cooperation with Japanese investor.
The proceeds required by the Government for this takeover are around USD709 million for
the purchase of assets USD549 million (tentative appraisal) and contingency USD500 million,
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Chapter 6
and operational costs of the company during transition USD110 million. Fund requirements
for PT Inalum takeover are expected to reach USD709 million or Rp 7.0 trillion will come
from APBNP 2012 Rp2.0 trillion, and APBN 2013 Rp5.0 trillion.
From this takeover process, the Government will receive yields from capital participation in
PT Inalum, which is expected to amount USD402 million and anticipated to receive in 2013.
6.3.2 Loan Financing
In APBN 2013, loan financing has been earmarked at Rp161.5 trillion. This loan financing
plan has taken the following aspects into account: (1) general debt management strategy;
(2) economic condition and financial market projection in 2013; (3) the latest issues on debt
management; and (4) debt financing policy in 2013.
Box 6.1
Government Guarantee for the Acceleration of Power Generation Development
Program using Renewable Energy, Coals and Gas
To meet electrical power demands and to diversify the energy with non-fuel power generation,
the Government needs to speed up the development of power generators consuming renewable
energy, coal and gas. This acceleration is carried out by assigning PT PLN (Persero) in two schemes:
a) The development is performed by PT PLN (Persero) with funding coming from APBN, internal
budget of PT PLN (Persero) and other fund sources.
b) The development under partnership with Independent Power Producers with power sales –
purchase scheme.
For the development under partnership with Independent Power Producers, the Government
will give business feasibility guarantee of PT PLN (Persero). This business feasibily guarantee is to
attract the interests of Independent Power Producers in non-fuel power generation development
and to reach the target of efficient fuel mix, and to realize energy resilience. Under this program,
the Government will encourage private investors to participate in reducing carbon emission as
an attempt to abate greenhouse effect with the development of power generators consuming
renewable energy, i.e. geothermal power generation plant (PLTP) and Hydro Power Plant (PLTA).
Business feasibility guarantee will be granted subject to evaluation of project feasibility and risk
so that fiscal risk of the granted guarantee can be minimized. The guarantee is for specific risks in
Power Purchase Agreement (PPA) between PT PLN (Persero) and Independent Power Producers,
and not a banket guarantee as found in previous policy. The term of guarantee will be based on
evaluation to the project investment return to ensure that the term of guarantee will be shorter
than PPA period.
6.3.2.1 General Debt Manageme