Finance Minister Sri Mulyani Indrawati (2nd left) briefs the press on State Budget issues.

JAKARTA (TheInsiderStories)Ministry of Finance (MoF) and Budget Committee of the House of Representatives agreed on the indicative budget ceiling for the ministries or institutions amounting to Rp838.6 trillion (US$58.413 billion), slightly decreased from Rp847.4 trillion in 2018, said one official on Wednesday (04/07).

Director General of Budget of the Ministry of Finance Askolani on Wednesday (04/07) said the lower budget allocation was due to better efficiency, though it is not expected to affect its performance of ministries and government institutions.

“If ministries and institutions are more efficient, it will have a better multiplier effect, and secondly, this ceiling is still the initial ceiling, after which there is still a budget ceiling,” he said.

The budget ceiling has taken into account the basic needs to finance the government services. It also pays attention to the national priorities programs including human development, poverty reduction, and tackling inequality through strengthening connectivity and boost maritime.

The budget also focuses on increased economic added value through agriculture, industry, and services. It also pays attention to the energy security, food security, and water resources management.

The budget allocates in the five function namely 35 per cent of public service function, 27 per cent of economic function, 13.3 per cent of social protection function, 12.1 per cent of education function, and 11.2 per cent of order and security function.

The Ministry of Defense receives the biggest allocation with Rp106.1 trillion. Askolani said the government increases the security budget to counter-terrorism and security for general and presidential election in 2019.

Indonesia has a long list on the terrorist attacks, which had been so far amounted to a total 29 terror attacks from 2000 to the suicidal bombs in Surabaya on May 2018. The worst incident was in the nightclubs in Bali that killed 202 people in 2002.

Other nine biggest ministries or institutions budget in 2019 are Public Works and Public Ministry with Rp102 trillion, the National Police with Rp76.9 trillion, Ministry of Religious Affairs’ Rp63 trillion, Ministry of Health’s Rp60 trillion, Ministry of Social Affairs’ Rp59.3 trillion, Ministry of Finance’s Rp46.3 trillion, Ministry of Transportation’s Rp44.1 trillion, The Ministry of Research, Technology and Higher Education’s Rp42.3 trillion, and Ministry of Education and Culture’s Rp39.2 trillion.

The Ministry of Finance calculated Rp94.4 trillion deficit in 2018 state budget by May 31, 2018. The Ministry noted the state expenditure realization reached Rp779.51 trillion or 35.1 per cent of the 2018 state budget by May 2018. The realization of the state expenditure includes central government expenditures of Rp458 trillion, consisting of ministries or institutions expenditures of Rp231.47 trillion, up 27.3% from the same period last year.

Budget spending for wages, or employee expenditures, rose 6.31% to Rp76.47 trillion or up 6.31% from the same period last year. Spending on goods rose 21.9% to Rp84.89 trillion or 21.9% growth, Social expenditure grew 93.24% to Rp39.25 trillion while capital expenditures fell 0.84% to Rp30.86 trillion.

Meanwhile, the Ministry of Finance calculated the realization of state revenues reached Rp685.06 trillion, equivalent to 36.16 per cent of the 2018 state budget. It consists of the tax revenue of Rp484.50 trillion or 34.02 per cent of the 2018 state budget target, followed by the customs and excise revenue of Rp54.16 trillion or 27.91 per cent of the 2018 state budget target.