JAKARTA (TheInsiderStories) - The Indonesian government considers issuing one or three months’s treasury bills (T-bills) to cover wider State Budget deficit in 2016, said Coordinating Minister for Economic Affairs. The government estimates the Budget deficit would be in the range of 2.5 to 2.7 percent to Gross Domestic Product (GDP) this year due to lower tax revenues.
Darmin Nasution told reporters after a limited meeting at the State Palace that in order to minimize the Budget deficit going wider this year, the government is trying to push the tax revenues and possibly issuing T-bills in the fourth quarter this year.
“To be sure, there are no plans at this stage to cut the Budget and the deficit would not rise nearly to 3 percent. It should be be under that level,” he said, adding that based on the government’s calculation, the regional government deficit is closed to 0.3 percent of GDP.
Finance Minister Sri Mulyani Indrawati reported to President Joko Widodo that until August of 2016 the government revenues reached 46.1 percent of the 2016’s Revised State Budget of Rp 1,786.23 trillion. She sees that the risks that could affect the government’s revenues would come from cost recovery of oil and gas sector.
In the period of January to July, Sri Mulyani said, the cost recovery has reached $6.5 billion, out of this year’s target of $8 billion. On the expenditure side, Sri Mulyani saw that government’s expenditure could reach 97.1 percent of this year’s target of Rp 2,082.95 trillion.
“Is likely that the cost recovery will exceed the target and will provide additional spending which then reduces state revenues derived from natural resources. This might be necessary for us to add in terms of the possible risks of the State Budget in 2016,” Sri Mulyani stated.
At the limited cabinet meeting, Widodo instructed the “Working Cabinet” members to stay focused on maintaining the economic growth with tangible steps. One of the steps that the President instructed to continue to do is to maximize tax revenues, either regular or source of tax amnesty policy, non-tax revenues, and also control the cost recovery of oil and gas to support optimal revenues.
“In terms of controlling and delaying the results and the allocation of funds for the public, I ask the Minister of Finance and the Ministry of Home Affairs to intensify communication with the governors, regents, mayors, so that everyone can understand and manage these changes properly,” the President said. (*)