Table Of Contents 1 Foreword 3 Executive Summary 7. Chapter I The National Budget

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5 TABLE OF CONTENTS Table Of Contents 1 Foreword 3 Executive Summary 7 Chapter I The National Budget Chapter II Implementation Of PBB And MTEF 2.1 Implementation Of Performance-Based Budgeting (PBB) And Medium-Term Ependitures Framework (MTEF) Escorting The Change Of Budgeting System In Indonesia (PP 90 Of 2010) 103 Chapter III Current Issue 3.1 State Ministries /Agencies Budget Economization Policy In The Budget Year Of Sharpening the Accuracy of Budget Plan in The State Ministries/Agencies Through Budget Revision Displacement Of Budget From The Budgetary Part Of State General Treasury (BP SGT ) To The Budgetary Part Of State Ministry/Agency (BP M/A) Implementation of Reward and Punishment In the Budgetary Fiscal Year of Chapter IV Management Of Non Taxable State Revenue Revision Of Law Number 20 Of 1997: Road To An Accountable And Credible Management Of Non Taxable State Revenue (NTSR) 159 ATTACHMENT 165 The Indonesian Budget Overview

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7 Foreword Executive Summary

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9 FOREWORD As an effort to consistently establish good governance, this book provides a brief picture and information on the tasks and functions of Directorate General of Budget and the Ministry of Finance, especially in relation to state finance management processes, which are strongly reflected in the process of Indonesian Budget 2011 s formulation and discussions. Contributors for each topic are Directorate General of Budget staffs with hands-on experience in the Indonesian Budget Formulation. It is our hope that this book will enrich our stakeholders knowledge and understanding on the Indonesian Budget Titled The Indonesian Budget Overview, the book is expected to provide a brief, yet comprehensive, outlook on how the Indonesian Budget 2011 were constructed and how to implement policies related to budget formulation. To gauge the progress of budgeting reform since its commencement in 2003, a milestone marked by the issuance of Act 17 of 2003 on State Finance, we also provide the latest information on the implementation of Performance-Based Budgeting (PBB), Medium-Term Expenditure Framework (MTEF) and changes in Indonesia s budgeting system with the implementation of Government Regulation No. 90 of 2010 on Ministry/Agency Work Plan and Budget Formulation. On the topic of Central Government expenditure, this book discusses contemporary issues that highlighted the year 2011, such as the budget economization The Indonesian Budget Overview

10 policy enacted on ministries and agencies as mandated by Presidential Instruction No. 7 of 2011 on Ministry/Agency Budget Economization for Fiscal Year Other recurring issues include budget revision in relation to budget planning accuracy. In terms of budget spending, as we are all aware, the Minister of Finance has issued Minister of Finance Regulation No. 38/PMK.02/2011 on Procedure for Utilization of Fund from 2011 Ministry/Agency Budget Optimizing in Fiscal Year 2011 and 2011 Budget Ceiling Reduction for Ministries/Agencies Failing to Fully Spend Their 2010 Budget. The directive was issued in the first quarter of 2011, on 2 March 2011 to be precise. Furthermore, in the spirit of improving budgeting transparency and accountability, the book explores budget virement from State General Treasurer Budget Section to Ministry/Agency Budget Section. In addition, one important issue related to the Indonesian Budget is the plan to revise Act No. 20 of 1997 on Non-Tax Revenue (PNBP). Legislative, social, economic and political changes in the period of 14 years since the 1998 Reform have forced PNBP managers to shape up and adapt to various civil dynamics so as to be able to optimally collect non-tax revenues in accordance with the principles of Good Corporate Governance. As the heart of PNBP management, Act No. 20 of 1997 on PNBP is being challenged from philosophical, judicial, and sociological point of view by PNBP stakeholders. Revision of this act is both an entry point and a constitutional equipment to address those challenges. Finally, we truly hope that Sekilas APBN 2011 may become a source of reference and knowledge for its readers. Jakarta, December 2011 Purwiyanto 6 Foreword

11 EXECUTIVE SUMMARY The theme for the Indonesian Budget as listed in Development Work Plan 2011 is national development, i.e. Fair Economic Growth Acceleration Supported by Stronger Management and Central-Regions Synergy. Budget allocation policies in 2011 are steered toward supporting national economic activities to spur economic growth, strengthen state finance management, and support regional autonomy and fiscal decentralization. In addition, the policies are also aimed at propelling the economy while maintaining fiscal sustainability, economic stability, and improving budget effectiveness and efficiency. The 2011 Budget allocation are meant to support: (1) high quality economic growth through, among others, infrastructure development; (2) social security through more accessible education (School Operation Aid/BOS) and health (Public Health Insurance/Jamkesmas); (3) public empowerment through, among others, National Community-Based Empowerment Program (PNPM Mandiri) and Family Hope Program; (4) bureacracy reform implementation reinforcement; (5) state apparatus and pensioner wealth improvement; (6) more effective subsidy budget allocation; and (7) punctual loan interest payment. The second part of the book covers the implementation of budget reform, which was initiated by issuance of Act No. 17 of 2003 on State Finance. The The Indonesian Budget Overview

12 implementation focuses on Performance-Based Budgeting (PBB). The other two approaches (unified budget and Medium-Term Expenditure Framework/ MTEF) serve as a support for PBB. Unified budget is a prerequisite for PBB implementation, while MTEF ensures budget provision continuity because in this approach activities are planned for the next three or five years. In addition, the book also discusses Indonesian budgeting system changes following the issuance of Government Regulation No. 90 of 2010 on Ministry/Agency Work Plan and Budget. Basically, the directive carries substantive and technical changes. The third part of this book discusses current issues on Central Government Expenditure Budget. The first issue is the budget economization policy enacted on ministries and agencies in Fiscal Year The article will throughly explore the budget economization policy as initiated by Presidential Instruction No. 7 of 2011 on Ministry/Agency Budget Economization for Fiscal Year The second issue is budget revision. In an ideal condition, budget document would contain accurate planning. At the operational level, however, several previously unidentified factors may influence how plans are actually implemented. An example of such factor is the enactment of new government policies. New acts that require particular activity funding is also another reason to revise the previously made plans. This is because the fund allocations for those unplanned activities are not included in the initial budget document. The third issue is budget virement from State General Treasurer Budget Section (BA BUN ) to Ministry/Agency Budget Section (BA K/L). In the spirit of budget transparency and accountability, the year 2011 saw the introduction of a new budget revision policy, i.e. the shifting from State General Treasurer 8 Executive Summary

13 Budget Section (BA BUN ) to Ministry/Agency Budget Section (BA K/L). The authority to revise the section is delegated from the Parliament (DPR) to the government. The fourth issue is the implementation of Reward and Punishment scheme in Fiscal year The Minister of Finance issued Minister of Finance Regulation No. 38/PMK.02/2011 on Procedure for Utilization of Fund from 2011 Ministry/ Agency Budget Optimizing in Fiscal Year 2011 and 2011 Budget Ceiling Reduction for Ministries/Agencies Failing to Fully Spend Their 2010 Budget. The directive was issued in the first quarter of 2011, on 2 March 2011 to be precise. As a reminder, the implementation of this reward scheme was instructed by Section 16A Act No. 2 of 2010 on Revised Indonesian Budget Fiscal Year 2010 which stated that the result of 2010 budget optimizing can be utilized in Fiscal Year On the other hand, the implementation of the punishment scheme was a manifestation of Section 20 of Act No. 10 Year 2010 on The Indonesian Budget Fiscal Year 2011 which stated that the budget reduction mechanism for ministries or agencies that failed to fully spend their budget is to be determined by the government. The fourth part of the book reviews Non-Tax Revenue Reform. Legislative, social, economic and political changes in the period of 14 years since the 1998 Reform have forced PNBP managers to shape up and adapt to various civil dynamics so as to be able to optimally collect non-tax revenues in accordance with the principles of Good Corporate Governance. As the heart of PNBP management, Act No. 20 of 1997 on PNBP is being challenged from philosophical, judicial, and sociological point of view by PNBP stakeholders. Revision of this act is both an entry point and a constitutional equipment to address those challenges. The Indonesian Budget Overview

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15 CHAPTER I The National Budget 2011 The Revise National Budget 2011

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17 CHAPTER 1 The National Budget 2011 The National Budget 2011 The National Budget (APBN) 2011 is drawn up under the provisions of article 23, paragraph (1) of the 1945 Constitutions, as amended into Article 23, paragraph (1), paragraph (2), and paragraph (3) of the 1945 Constitution of the Fourth Amendments as written : (1) The National Budget as a form of the State financial management is annually established under the laws and implemented openly and responsibly for purpose of giving the greatest number of prosperity to the Indonesian People; (2) The Draft Bill of National Budget shall be proposed by the President to be then discussed with the Parliament (Indonesian Legislative Assembly) by observing considerations of the Regional Legislative Assembly; (3) If the Parliament does not approve the Draft of National Budget proposed by the President, then the Government shall enforce the last-year National Budget. In addition, the National Budget 2011 is also drawn up with reference to the provisions specified in the Laws Number 17 of 2003 on State Finance, which is guided by the Government Work Plan (GWP) of 2011, as well as the Macroeconomic Framework and the Principles of Fiscal Policy of 2011, as agreed in the preliminary talks between the Government and the Indonesian Legislative Assembly (DPR-RI). Besides that, the process and mechanism of which APBN in the Fiscal Year of 2011 are prepared, drawn up and discussed shall be performed under the Laws Number 27 of 2009 on MPR (People s Consultative Council), The Indonesian Budget Overview

18 DPR (Indonesian Legislative Assembly), DPD (Regional Leadership Assembly), and DPRD (Regional/Provincial Legislative Assembly). Assumption of Macroeconomics in 2011 All amounts of the National Budget 2011 shall be accounted based on the primary assumption of macroeconomics estimated to occur in The primary assumptions of macroeconomics as the basis of accounting the National Budget 2011 shall be as follows. TABLE 1 ASSUMPTION OF MACROECONOMICS, Economic Indicators APBN APBN-P APBN 1. Economic Growth (%) 5,5 5,8 6,4 2. Inflation (%) 5,0 5,3 5,3 3. Exchange Rates (IDR / USD) SBI-3 Month Interest Rate (%) 6,5 6,5 6,5 5. ICP Oil Prices (USD) 65,0 80,0 80,0 6. Oil Lifting (thousand barrels / day) Source: Ministry of Finance Principles of Fiscal Policy in 2011 In line with the theme of national development specified in the Government Work Plan (GWP) 2011, namely The Accelerated Equitable Economic Growth Shall Be Supported by Consolidating The Central - Regional Governance and Synergy, the policy of budgetary allocation within 2011 is aimed at being able to support the national economic activities in order to push economic growth, to stabilize the national financial management, as well to support regional autonomy enforcement and fiscal decentralization. In addition, the said policy is also aimed at giving a boost to the Indonesian economy by keeping on maintaining both 14 Chapter 1 The National Budget 2011, The Revise National Budget 2011

19 fiscal sustainability and economic stability, and enhancing the effectiveness and efficiency of budget. The budgetary allocation in 2011 shall be focused on giving supports to : (1) the achievement of a qualified economic growth by constructing infrastructures, (2) social protection by expanding accesses to educational services (school s operational aids / BOS) and health services (Social Medical Insurance / Jamkesmas), (3) people empowerment, including through the Autonomous National Program For People Empowerment (ANPFPE) and Hopeful Family Program, (4) consolidation to implement bureaucratic reformation, (5) improvement of warfare for state apparatus and retirees, (6) the better-targeted subsidized budget allocation, and (7) the fulfillment of obligation in paying debt interest promptly. Under the direction and strategy of fiscal policy mentioned above, the posture of the National Budget 2011 shall comprise the following principles of amount : a. State revenues and grants amount to IDR , 9 trillion (15.7 percent of PDB), or have a surplus/increase of IDR.112, 5 trillion (11.2 percent) of the target of APBN-P The said increase in state revenues was supported by the increase in tax revenue target. b. Total state expenditure amounts to IDR.1.229, 6 trillion (17.5 percent of PDB). This amount means indicating an increase of IDR.103, 4 trillion or 9.2 percent of the state expenditure ceiling in the APBN-P (Central Government Budget) The Central Government Expenditure in 2011 amounts to IDR.836, 6 trillion, it means indicating an increase of IDR.55, 0 trillion or 7.0 percent of the ceiling of APBN-P Meanwhile, the budget of transfers to regions in 2011 amounts to IDR.393, 0 trillion, it means an increase of IDR.48, 4 trillion or 14.0 percent of the ceiling of APBN-P c. Budget deficit amounts to IDR.124, 7 trillion (1.8 percent of PDB). The Indonesian Budget Overview

20 d. Financing deficit of APBN (National Budget) 2011 comes from domestic financing sources amounting to 125, 3 trillion, and foreign financing (net) in a negative amount of IDR.0, 6 trillion. State Revenues and Grants in 2011 State revenues and grants are very important sources for financing the development programs as specified in the GWP (Government Work Plan). The prospect of economic recovery become one of the main factors to optimize the state revenue sources. Based on the primary assumptions of macroeconomics in 2011, the state revenues and grants shall be targeted at IDR.1.104, 9 trillion, consisting of domestic revenue amounting to IDR.1.101,2 trillion and grants amounting to IDR.3,7 trillion. If it is compared with its target in the APBN-P of 2010, the said target in 2011 has increased to 11.3 percent. The main source of such increase is expected to be derived from the tax revenues targeted to increase in line with the performance of various extra efforts, including by improving tax administration, excavating potential taxation, enhancing tax audit, and repairing mechanisms of objection and appeal. Tax Revenue In order to discover/explore the potential tax revenues in 2011, the following programs shall be performed by the Government, among others : (1) extension program for taxation in adding new tax payers (TP), (2) intensification program for exploring potential taxes on Taxpayer Profile basis, discovering certain potential sectors, and maximizing the exploited taxation data (METD), (3) giving tax education in order to improve tax payer compliance, and (4) reforming taxation in the form of tax reformation volume II, including to be carried out through a program Project for Indonesia Tax Administration Reform (PINTAR), of which solution shall take time in the medium term ( ). 16 Chapter 1 The National Budget 2011, The Revise National Budget 2011

21 In addition to the aforesaid four efforts, making the best of tax revenue in 2011 shall be also supported by the efforts to improve tax audit quality. In this case, the following measures shall taken by the Government: (1) to draw up a policy of technical audit for the investigation outcome of the Taxpayers united in one group, (2) to conduct studies on treatment of Value Added Tax (VAT) for mine products, (3) to increase the number of coordination with all related agencies in connection with the disbursement of tax receivables and disbursement priority to the largest tax delinquent, and (4) to harmonize Laws, General Provisions and Tax Procedures, Bankruptcy Act and the relevant Laws concerning the state priority right to the tax receivables against the Tax Payers declared bankrupt. In 2011, the tax revenue shall be targeted at IDR.850, 3 trillion, or increases to 14.4 percent of its target in the APBN-P Several influential factors in the increasing of tax revenue are (1) higher economic growth, both globally and domestically, (2) improvement to tax, customs and excise administrations conducted continuously, (3) extra efforts made in framework of maximizing tax revenues, and (4) the high tax compliance from the community. Furthermore, regarding the more detailed development of tax revenue components in the APBN (National Budget) 2011 can be described as follows. Income tax (IT/PPh) is targeted at IDR.420, 5 trillion in 2011, or increases to 16.1 percent if it is compared with its target in the APBN-P Including in the income tax revenue target, tax facility shall be borne by the Government in amount of IDR.3, 5 trillion, consisting of income tax borne by the Government for geothermal in amount of IDR.1, 0 trillion, the income tax borne by the Government for international bond interest amounts to IDR.1, 5 trillion, and the income taxs borne by the Government for grants and international financial cooperation amount to IDR. 1, 0 trillion. Of the total income tax revenue in 2011, oil and gas income tax is target at IDR.55, 6 trillion, or 13.2 percent of contribution to the income tax revenue. If it The Indonesian Budget Overview

22 is compared with the target at the APBN-P of 2010, the target of the oil and gas income tax in 2011 has an increse of 0.3 percent. The target of oil and gas income tax revenue in 2011 is based, among others, on: (1) assumption of ICP (Indonesia Crude Price) $ 80, 0 per barrel, (2) the average exchange rate is IDR = $.1; and (3) oil lifting is 970 thousand bphl. In 2011, non-oil and gas income tax is targeted to reach IDR.364, 9 trillion, it increases to 18.9 percent, if it is compared with the target of state budget The increase in non-oil and gas income tax is mainly derived from the increased income tax revenue of Article 25/29 for entity and Article 21, each of which is respectively targeted to grow 29.3 percent and 0.8 percent in In general, the main factor pushing the increase in non-oil and gas income tax revenue is the high economic growth and the stable fundamental factors of Indonesian macroeconomics. In addition, other factors that affect the increase in non-oil and gas income tax are the application of various tax policies which among others include: (1) post-sunset policy activity which focuses on the law enforcement and guidance to taxpayers, (2) broadening the tax basis, (3) intensification activities through mapping, profiling, and benchmarking; and (4) extra-efforts through inspection and collecting/billing. In 2011, the targets of VAT and sales tax on luxury goods (STLG) shall amount to IDR.312, 1 trillion, it is an increase of 18.7 percent from the estimates in the APBN-P This increase was the impact of the Indonesia s economic growth assumptions in 2011 which reached 6.4 percent, from estimates of economic growth in the APBN-P 2010 amounting to 5.8 percent. The public and Government consumption, each of which is estimated to grow above 5.0 percent and 6.0 percent shall be expected to encourage an increase in VAT and domestic sales tax revenues for luxury goods. Likewise, the activity of world trade expected to grow above 6 percent would be one of the drivers to increase VAT revenues and imported luxury sales tax revenue. 18 Chapter 1 The National Budget 2011, The Revise National Budget 2011

23 Land and building tax (PBB) revenue shall be target at IDR.27, 7 trillion in 2011 or increases to 9.3 percent from its target in the APBN-P The Target of such PBB revenue has already anticipated the PBB administrative transfer policy of rural and urban sectors from the Center to the regions that are ready to implement such policy. Meanwhile, as the largest component, the PBB (Land and Building Tax) on mine shall be targeted at IDR.20, 8 trillion, or increases to 21.7 percent from its target in the APBN-P of In connection with the administrative transfer policy on the Right Acquiring Duty For Land and Buildings (RADFLB) from the Central Government to the Local Government, then there is no revenue of RADFLB in the National Budget of The excise revenues in 2011 is targeted at IDR.62, 8 trillion, consisting of excise on tobacco amounting to IDR.60, 1 trillion, excise on Beverage Containing Ethyl Alcohol (BCEA) and Ethyl Alcohol Beverages (EAB) amounting to IDR.2, 7 trillion. If it is compared with the APBN-P of 2010, the target of excise tax in 2011 increases to 5.9 percent, supported by an increase in excise on tobacco amounting to 7.5 percent. Several influential factors to the increase in excise revenue are (1) an increase in tobacco excise tariff in accordance with the roadmap of tobacco excise, (2) improvement of customs and excise administration, and (3) extra efforts to reduce the circulation of goods subject to illegal excise. In 2011, other taxes are targeted at IDR.4, 2 trillion or 9.3 percent if compared with their target in the APBN-P The said increase is primarily due to the increase in transactions using seals (revenue stamps). Import duty revenue in 2011 is targeted at IDR.17, 9 trillion. If it is compared with the target of APBN-P 2010, there is an increase of 4.6 percent. Import duty revenue in 2011, including any import duty borne by the Government is targeted at IDR.2, 0 trillion. The parameters taken into consideration in determining the targeted import duties are (1) economic growth of 6.4 percent, (2) the Indonesian Rupiah average exchange rate : IDR = $.1 ; and (3) the increased volume of The Indonesian Budget Overview

24 imports as a result of the increasing volume of international trade. Export duty policy is not solely intended to raise state revenues, but there are other objectives such as national price stability and preservation of natural resources. In 2011, export duty is target at IDR. 5, 1 trillion or 6.4 percent, it is lower if it is compared with the target of APBN-P Any import duty revenue is very dependent on the Government policy in applying the amount of import duty, among others are : (1) the reference price of crude palm oil (CPO) and its derivatives, as well as the reference price of cocoa beans determined by the Government and becoming the basis of the import duty tariff; and (2) export benchmark price fixing as the basis for calculating the export duty levy. In addition, there is an uncontrollable parameter, namely the volume of exports from such commodities. Non-Taxable State Revenues (NTSR) In 2011, the Government seeks the optimization of non-taxable state revenue to support the domestic revenue sources. In the Nasional Budget (APBN) 2011, the role of natural resource (NR) revenues, in particular oil and gas revenues, are expected to remain dominant. Based on the basic macroeconomic assumptions set out, especially indicator of Indonesia crude price (ICP), the exchange rate of rupiah against U.S. dollar, and production / lifting of petroleum, as well as policy measures in order to optimize revenue, then the Non-Taxable State Revenues in 2011 is targeted at IDR.250, 9 trillion. The target of such non-tax revenues increase to the amount of IDR.3, 7 trillion, or 1.5 percent if compared with estimates in the APBN-P This increase is more caused by the increase in other non-taxable state revenues and public service agency (PSA) revenue. The policies and measures to be taken by the Government in achieving the target of Non-Taxable State Revenues in 2011 are : (1) optimization of the natural resources revenues, especially oil and gas natural resources through efforts to 20 Chapter 1 The National Budget 2011, The Revise National Budget 2011

25 achieve the target of production / lifting of crude oil, (2) an increase in mine and mineral commodity production and regulatory improvements in mining sector, (3) exploring potential revenues in forestry sector other than timber and non-timber forest, (4) maximizing dividends of State Owned Enterprises (SOEs) by keeping on considering an increase in efficiency and performance of SOEs by maximizing investment (capital expenditure), and (5 ) improving the performance of services and administration in the Non-Taxable State Revenues of the state ministries / agencies (SM / A, and (6) review of the regulations associated with the type of non-taxable state revenue tarif of M / A. Further information about the allocation of non-taxable state revenue components in the National Budget of 2011 can be explained as follows. Natural Resource Revenue in the year 2011 is targeted at IDR.163, 1 trillion derived from oil & gas and non-oil and gas revenues. In 2011, oil and gas resource revenue is targeted at IDR.149, 3 trillion, there is a decrease of IDR.2, 4 trillion or 1.6 percent if it is compared with the target in the APBN-P Source of revenue for natural resources of oil and gas consist of petroleum revenues amounting to IDR.107, 5 trillion and natural gas revenues amounting to IDR.41, 8 trillion. The lower target of the natural resource revenue in 2011 is mainly caused due to an increase in the reducing components (taxes and other levies) which are used as the basis of calculating natural resources of oil and gas in In addition, the lower target in 2011 is also caused due to the APBN-P 2010 including additional natural resource revenue of oil and gas beyond the routines derived from the settlement of oil and gas liabilities of PT Pertamina (Persero) amounting to IDR. 5, 0 trillion, all of which will be used for payments to PT Pertamina (Persero) for the use of oil fuel and lubricants (OFL) by the TNI (Indonesian Armed Force). The Non-Tax State Revenues of the Government for the State-Owned Enterprises profits in 2011 are targeted at IDR.27, 6 trillion, which means a decrease of IDR.1, 9 trillion or 6.5 percent if compared with the target in the APBN-P 2010 amounting The Indonesian Budget Overview

26 to IDR.29, 5 trillion. The lower target of non-taxable state revenue of the Government for SOE s profits in 2011 is mainly caused by vulnerable macroeconomic conditions to budget deficit of the countries of Organization for Economic Cooperation and Development (OECD), especially the European Union and the United States in 2010, so it will cause performance of SOEs declined in 2011, as well as the government policy towards the Satte-Owned Enterprises of banking sector to improve non-performing loan (NPL) which is the profit-reducing component of the State-Owned Enterprise of banking with respect to general reserve allowance for earning productive assets. In 2011, the other Non-Taxabke State Revenues (NTSR) are targeted at IDR.45, 2 trillion, slightly increase to the amount of IDR.1, 7 trillion, or 3.9 percent if compared with the target in APBN-P 2010 amounting to IDR.43, 5 trillion. PSA (Public Service Agency) revenue in 2011 is targeted at IDR.15, 0 trillions. Such revenue gets a higher amount of IDR.5, 5 trillion, or 58.4 percent of the target in the APBN-P 2010 amounting to IDR.9, 5 trillion. The said increase is partly due to the increasing number of state universities, including seven state universities (SU) of ex-state-owned legal entities (SOLE) applying the pattern of PSA (Public Service Agency) and the applied pattern of PSA management by all government hospitals. Grant Revenue Grant Revenue in 2011 is target at IDR.3, 7 trillion. The said target is higher, namely IDR.1, 8 trillion or 97.2 percent if it is compared with the target of APBN-P 2010 amounting to IDR.1, 9 trillion. Such increase, among others, is influenced by the more and more increasing commitment of donor countries to assist Indonesia with respect to the issue of climate change and the more and more effective system of administration and recording of grants revenue in the National Budget. 22 Chapter 1 The National Budget 2011, The Revise National Budget 2011

27 In addition, it is due to accommodating the grants of PT Pertamina s and PT PLN (Persero) s assets to be used for state capital participation (SCP) in PT Geo Dipa Energy in amount of IDR.O, 4 trillion. TABLE 2 STATE REVENUE AND GRANTS, (trillion rupiah) Description APBN-P % of PDB APBN % of PDB State Revenue and Grants Domestic Revenues Taxation Revenue Domestic Taxes Income Tax of 992,4 990,5 743,3 720,8 362,2 15,9 15,8 11,9 11,5 5, , ,2 850,3 827,2 420,5 15,7 15,7 12,1 11,8 6,0 Oil and Gas 55,4 0,9 55,6 0,8 Non Oil and Gas 306,8 4,9 364,9 5,2 Value Added Tax 263,0 4,2 312,1 4,4 Land and Building Tax 25,3 0,4 27,7 0,4 BPHTB 7,2 0,1 0,0 0,0 Excise 59,3 0,9 62,8 0,9 Other Taxes 3,8 0,1 4,2 0,1 International Commercial Taxes 22,6 0,4 23,0 0,3 Import Duties 17,1 0,3 17,9 0,3 Export Duties 5,5 0,1 5,1 0,1 Non-Taxable State Revenue 247,2 4,0 250,9 3,6 Natural Resource Revenues 164,7 2,6 163,1 2,3 Oil and Gas 151,7 2,4 149,3 2,1 Non Oil and Gas 13,0 0,2 12,8 0,2 Profit part of SOE 29,5 0,5 27,6 0,4 Other Non-Taxable State Revenues 43,5 0,7 45,2 0,6 PSA (Public Service Agency) Revenue 9,5 0,2 15,0 0,2 Grants 1,9 0,0 3,7 0,1 Source: Ministry of Finance The Indonesian Budget Overview

28 Central Government Expenditures in 2011 With reference to the strategic objectives, policy direction and development priorities in the GWP (Government Work Plan) of 2011, then the state expenditure policy in 2011 will be aimed at giving a boost to the economy by keeping on maintaining fiscal sustainability, maintaining economic stability, and improving the effectiveness and efficiency of state expenditure. In accordance with such policy direction, then the allocation of Central Government s budget in 2011 will be more focused on providing supports for: (1) consolidating the implementation of bureaucracy reformation; (2) achieving qualified economic growth through infrastructure construction; (3) social protection through the expansion of access to education and health services (Jamkesmas); (4), people empowerment, among others, through the autonomous NPFPE (National Program For People Empowerment) and Hopefull Family Program, (5) improvement of the welfare of state apparatus and retirees, (6) better-targeted subsidized budgetary allocation, and (7) the fulfillment of obligation to pay debt interest in a timely manner. In relation to educational services, in accordance with the Government Work Plan (GWP) of 2011, the mechanism of BOS (School s Operational Aids) funds distribution that all this time have been allocated through the budget of the Ministry of National Education, beginning in 2011, is reallocated to be the part of the transferring budget to the regions following the pattern of fiscal decentralization, with the consideration that the implementation of primary education is the local domain as mandated in the Laws Number 32 of 2004 regarding Regional Government. Based on various considerations mentioned above, the Central Government s budgetary allocations in the National Budget 2011 is provided in amount of IDR.836, 6 trillion (11.9 percent of PDB). This amount is higher, namely IDR.55, 0 trillion, or 7.0 percent if it is compared with the volume of the Central Government s budget in the APBN-P (Central Government s Budget) 2010 in amount of IDR.781, 24 Chapter 1 The National Budget 2011, The Revise National Budget 2011

29 5 trllion (12.5 percent of PDB). The said increase in volume of the Central Government s budget in the APBN (National Budget) 2011 is mainly associated with the increase in budgetary allocation of personnel, goods expenditure, capital expenditure, and debt interest payments. The Central Government s budgetary allocation in the APBN 2011 will be used primarily to support funding for various development programs, whether performed by the state ministries / agencies (SM / A) according to the duties and functions of each SM/A (State Ministry / Agency), or cross-sectoral programs, and / or non-sm/a expenditure, in accordance with the development priorities specified in the GWP of The further information about the development of the allocation of Central Government expenditure components according to economic classification can be explained as follows. In the National Budget 2011, the budgetary allocation for personnel expenditure is provided in amount of IDR.180, 8 trillion or 2.6 percent of PDB. Such amount indicates an increase of IDR.18, 2 trillion, or 11.2 percent if it is compared with the budget ceiling in the APBN-P 2010 amounting to IDR.162, 7 trillion. This increase is primarily related to various policy measures taken by the Government in the framework of reforming bureaucracy, both in improving and maintaining the welfare of Government personnel and retirees and in improving the quality of public services. Such personnel budget consists of salary and allowance budgets, honorarium, vocation, overtime budgets, and as well as social contribution budget. Budgetary allocation for goods in the APBN (National Budget) 2011 is provided in amount of IDR.137, 8 trillion or 2.0 percent of PDB. This amount indicates an increase of IDR.25, 3 trillion or 22.4 percent if it is compared with the budget ceiling of goods specified in the APBN-P 2010 in amount of IDR.112, 6 trillion (1.8 percent of PDP). The budgetary allocation for the goods expenditure post shall be especially aimed at: (1) maintaining the smooth operation of government The Indonesian Budget Overview

30 operational activities, public services, and maintenance of assets, including provision of operational expenditure for the new work units, and (2) providing funds for travel expenses in order to support the basic tasks. The budget of goods in the APBN of 2011 is allocated for goods and services expenditure post, maintenance expenditure post, and tarvel expenditure post. In order to support the achievement of development goals in accordance with the policy direction, theme, and development priorities in the GWP of 2011, the budgetary allocation for capital in the National Budget 2011 is provided in amount of IDR.135, 9 trillion or 1.9 percent of PDB. This amount indicates an increase of IDR.40, 8 trillion or 43.0 percent if it is compared with the budget ceiling for capital specified in the APBN-P of 2010 amounting to IDR.95, 0 trillion (1.5 percent of PDB). The increased budgetary allocation for capital in 2011 is in line with the Government efforts to accelerate a qualified, inclusive and equtable economic growth. Debt interest payments in the National Budget 2011 is provided in amount of IDR.115, 2 trillion, or 1.6 percent of PDB. Such debt interest expense is intended for payments of domestic debt interest amounting to IDR.79, 4 trillion and payments of foreign debt interest amounting to IDR.35, 8 trillion. In calculating the debt burden in the National Budget of 2011, several variables influence, among others: (1) the exchange rate assumption of Indonesian Rupiah against the U.S. dollar, and some other strong currencies, (2) interest rate of three- month SBI used as a reference for instrument interest of variable rate SBN, (3) assumption of LIBOR rate with a floating rate of interest used as a reference for calculating loan instrument, (4) outstanding debt, and (5) the anticipated new debt in The budgetary allocation for subsidies in the APBN (National Budget) of 2011 is provided t in amount of IDR.187, 6 trillion (2.7 percent of PDB). This amount indicates a decrease of IDR.13, 6 trillion, or 6.8 percent if it is compared with the budget for subsidies in the APBN-P of 2010 amounting to IDR.201, 3 trillion. 26 Chapter 1 The National Budget 2011, The Revise National Budget 2011

31 Provision of subsidies on the National Budget of 2011 is intended for matters concerning the livelihood of many people, especially for poor people, and tailored to the ability of state finances. Most of the budgetary allocation for subsidies in the National Budget of 2011 is planned to be distributed to energy subsidies amounting to 72.8 percent, namely Fuel Subsidies amounting to 51.1 percent and power subsidy amounting to 21.7 percent, while the remainder, amounting to 27.2 percent, will be distributed to non-energy subsidies, namely: (1) food subsidies, (2) fertilizer subsidy, (3) seed subsidy, (4) PSO assistance / subsidy, (5) program credit interest subsidy, and (6) tax subsidy. The subsidized budget for fuel in 2011 is provided for some types of specific fuel, namely: (1) kerosene, (2) premium and biopremium, (3) diesel oil and biodiesel, and (4) three- kilogram tube LPG. With certain types of fuel subsidies and threekilogram tube LPG subsidies, it is expected that demands for fuel and LPG can be fulfilled at affordable prices. The subsidized budget for certain fuel and three-kilograms tube LPG in the National Budget 2011 is provided in amount of IDR.95, 9 trillion (1.4 percent of PDB). This amount indicates an increase of IDR.7, 0 trillion or 7.9 percent if it is compared with the subsidized budget for certain types of fuel and threekilogram tube LPG in the APBN-P 2010 amounting to IDR.88, 9 trillion (1.4 percent of PDB). The increase in burden of the subsidized budget for certain types of fuel and three-kilogram tube LPG in the Nasional Budget 2011, relating to changes in fuel alpha, volume of fuel consumption for certain types, and volume of conversion from kerosene to three-kilogram tube LPG. The subsidized amounts for certain types of fuel and three-kilogram tube LPG in the National Budget 2011 are based on the following parameters: (1) ICP (Indonesia Crude Price) amounts to $ 80, 0 per barrel, (2) volume of fuel consumption for certain types is estimated to 38.6 million kiloliters (kl ) and the consumption of three-kilograms tube LPG amounts to 3.52 metric tons, (3) alpha of fuel amounts to IDR.595, 5/liter; and (4) The Indonesian Budget Overview

32 the Indonesian Rupiah exchange rate is IDR = 1. U.S. dollar. In 2011, electricity subsidies still need to be provided, with consideration that the prevailing electricity tariff is still lower than the basic cost of providing electricity. As guided in the GWP (Government Work Plan) of 2011, the Government seeks some policies in order to control the subsidized budget, especially for fuel and electricity. For some last years, the realization of the subsidized budget for electricity has increased significantly. To control the subsidized budget for electricity, the Government in conjunction with PT PLN (Persero) gradually keep on performing the steps and efforts to reduce electric power BPP, among others with: (1) electricity usage savings programs (demand side) through reduction of electrical circuitry shrinkage (losses ) and (2) primary energy diversification program in power plant (supply side), by maximizing the use of gas, replacement of High Speed Diesel (HSD) with Marine Fuel Oil (MFO), increase in use of coal, utilization of biofuels, and geothermal. In addition to the policies mentioned above, the calculation of electrical subsidy burden in 2011 is also based on the following assumptions and parameters : (1) ICP (Indonesia Crude Price) amounts to $ 80, 0/barel, (2) the Indonesian Rupiah exchange rate is IDR = $.1, (3) PT PLN s operating margin amounts to 8 percents, (4) the estimated increase in sales of electrical power is approximately 7,4 percent of sales in 2010, and (5) electrical circuitry shrinkage (losses) amounts to 8.55 percent. The subsidized budget for electricity in the National Budget 2011 is provided in amount of IDR.40, 7 trillion (0.6 percent of PDB). This indicates a lower amount, namely IDR.14, 4 trillion or 26.1 percent of the subsidized budget burden for electricity in 2010 amounting to IDR.55, 1 trillion (0.9 percent of PDB). The lower allocation of the subsidized budget for electricity in the National Budget 2011 is primarily related to the delay in payment of debts for electrical subsidy in 2009 amounting to IDR. 4, 6 trillion, the decreased electrical circuitry shrinkage (losses) 28 Chapter 1 The National Budget 2011, The Revise National Budget 2011

33 and the fulfillment of gas supply (fuel mix). In the APBN (National Budget) 2011, the budgetary allocation for grants is provided in amount of IDR.771, 3 billion, which means there is an increase amounting to IDR.528, 1 billion if it is compared with the grant budget ceiling specified in the APBN-P of 2010 amounting to IDR.243, 2 billion. The policy of budgetary allocation for grants to the regions in 2011 is still focused on the continuation of the program in 2010, which was aimed at supporting efforts to increase the capacity of local governments in providing basic public services in education, drinking water, sanitation and transportation. The budgetary allocation for social aids in the APBN (National Budget) 2011 is provided in amount of IDR. 63, 2 trillion or 0.9 percent of PDB. This amount indicates a decrease of IDR.8, 0 trillion or 11.2 percent if it is compared with the budget ceiling for social aids specified in the APBN-P 2010 amounting to IDR.71, 2 trillion (1.1 percent of PDB). The budgetary allocation for social aids in 2011 consists of: (1) allocation of funds for natural disaster relief in amount of IDR.4, 0 trillion, and (2) allocation of social aids distributed through the state ministries / agencies amounting to IDR.59, 2 trillion. The budgetary allocations for other purposes in the National Budget 2011 is provided in amount of IDR.15, 3 trillion or 0.2 percent of PDB. This amount indicates a decrease of IDR.17, 7 trillion or 53.7 percent if it is compared with the budget ceiling for other purposes in the APBN-P 2010 amounting to IDR.32, 9 trillion (0.5 percent of PDB). The budgetary allocation for other purposes in 2011 consists of: (1) fiscal risk reserve fund (policy measures) in amount of IDR.4, 2 trillion, and (2) other expenditures in amount of IDR.11, 1 trillion. The lower budgetary allocation for other purposes. in 2011, among others, is related to the reallocation of some budgetary items from other expenditures to State Ministries / Agencies ( M/A) expenditures, such as funding for the collecting costs of the land & building tax, operational budget of several committees / agencies, The Indonesian Budget Overview

34 and some supporting expenditures. In addition, a budgetary reallocation for state capital participation (SCP) shall be also made to the international financial agencies from other expenditure to the financing post. Such reallocation shall be performed in an effort to improve the quality of APBN (National Budget) in order to make it more transparent, accountable, and orderly administrative, because the M / A executing the budget shall be responsible for its activities, both administration and substance. TABLE 3 DEVELOPMENT OF CENTRAL GOVERNMENT, No Description Employee Expenditure Goods Expenditure Capital Expenditures Debt-Interest Payments Subsidies Grant Expenditures Social Aids Other Expenditures (trillion rupiah) APBN-P % of PDB APBN % of PDB 162,7 112,6 95,0 105,7 201,3 0,2 71,2 32,9 2,6 1,8 1,5 1,7 3,2 0,0 1,1 0,5 180,8 137,8 135,9 115,2 187,6 0,8 63,2 15,3 Total 781,5 12,5 836,6 11,9 2,6 2,0 1,9 1,6 2,7 0,0 0,9 0,2 Source : Ministry of Finance In connection with the Central Government s budgetary allocation pursuant to organizations in the APBN 2011, it can be explained as follows. From the Central Government s budgetary allocations in the APBN (National Budget) of 2011 amounting to IDR.836, 6 trillion, the budgetary allocation for State Ministries / Agencies expenditures is provided in amount of IDR.432, 8 trillion (6.2 percent of PDB), while the budgetary allocation for non-state ministries/ agencies (budgetary part of state general treasury) is provided in amount of IDR.403, 8 trillion (5.8 percent of PDB). Thus, the budgetary allocation for M / A (State Ministries / Agencies) in the APBN 2011 indicates an increase of IDR.66, 6 trillion or 18.2 percent if is compared with its ceiling in the APBN-P 2010 amounting 30 Chapter 1 The National Budget 2011, The Revise National Budget 2011

35 to IDR.366, 1 trillion (5.9 percent of PDB). The increase in budgetary allocation for M / A expenditures which is quite significant in the National Budget 2011 is related to the strategic framework of upfront loading in funding the National Medium-Term Budget Plan (NMTBP) of Besides, such increase is also related to the reallocation of some activities in other budgetary programs to the budgetary part of the State Ministries / Agencies. The cornerstone of thinking of such strategy is that at the beginning of recovery from economic crisis, the government expenditure is a major stimulant to encourage the economic growth, so that in the early years of the implementation of NMTBP of , a considerable thrust shall be required, particularly for construction of infrastructure. However, the increase in budgetary allocation shall demand for improvement of budget quality, either in the phase of planning, budgeting, or accountability, in order to obtain optimal benefits associated with the achievement of development targets specified in the GWP of Accordingly, the budgetary allocation of M/A will be more directed to various BAB I [THE INDONESIAN BUDGET IN BRIEF 2011] activities that can effectively tender the direct impact and/or contributions for achievement of development goals. TAHUN 2011 Polri; 6,9% GRAFIK 1 PROPORSI ANGGARAN BELANJA 10 K/L DENGAN NILAI BELANJA TERBESAR TH 2011 Kemenag; 7,4% Kemenhan; 11,0% Kemendiknas; 12,9% Kemenkes; 6,4% Kemenhub; 5,1% Kementan; 4,1% Kemenkeu; 3,6% Kemen ESDM; 3,5% Kemen PU; 13,4% Sumber: Kemnterian Keuangan Berikut uraian singkat mengenai alokasi anggaran belanja negara untuk 5 K/L terbesar dalam APBN The Indonesian Budget Overview Kementerian Pekerjaan Umum 31

36 The following is a brief description of the biggest state-budget allocation for 5 ministries / agencies (M / A) in the APBN (National Budget) of Ministry of Public Works In the National Budget 2011, the Ministry of Public Works shall be stipulated to receive a budgetary allocation in amount of IDR.58, 0 trillions. This amount in nominal terms increases amounting to IDR.21, 9 trillion or 60.6 percent if it is compared with the budgetary allocation ceiling of the Ministry of Public Works in the APBN-P of 2010 amounting to IDR.36, 1 trillion. The budgetary allocation for the Ministry of Public Works in the National Budget of 2011 is sourced from a pure Rupiah of IDR.47, 5 billion, Overseas Loan and Grant (OLG) in amount of IDR.10, 4 trillion, and the ceiling of non-tax revenue use amounting to IDR.50, 7 billion. The budget for the Ministry of Public Works in 2011 will be utilized to carry out various programs, among others: (1) road constructing programs, with a budgetary allocation amounting to IDR.29, 8 trillion, (2) settlement infrastructure establishment and development program, with a budgetary allocation amounting to IDR.13, 1 trillion; and (3) water resource management program, with a budgetary allocation amounting to IDR.12, 6 trillion. Ministry of National Education In the National Budget 2011, the Ministry of National Education (Kemendiknas) is determined to obtain a budgetary allocation in amount of IDR.55, 6 trillion. This amount decreases amounting to IDR. 7, 8 trillion or 12.3 percent if it is compared with the budgetary allocation for the Ministry of National Education in the APBN-P of 2010 amounting to IDR. 63, 4 trillion. The budgetary allocation for the Ministry of National Education in 2011 is sourced from a pure Rupiah amounting to IDR.42, 4 trillion, OLG (Overseas Loan & Grant) amounting to IDR.2, 5 trillion, and the ceiling of non-tax revenue use amounting to IDR.10, 7 billion. 32 Chapter 1 The National Budget 2011, The Revise National Budget 2011

37 The budgetary allocation for the Ministry of National Education in 2011 will be utilized to implement various programs, among others: (1) kindergarten and elementary school education program, with a budgetary allocation in amount of IDR. 6, 7 trillion. Starting in 2011, it is planned a policy of budgetary reallocation for School Operational Aid (BOS) Fund, which all this time has been allocated through the budget of the Ministry of National Education, then moved to be the part of transfer budget to regions. Such budgetary reallocation amounts to IDR.16, 8 trillion, consisting of: (a) School Operational Aid (BOS) funds amounting to IDR.16, 6 trillion, and (b) reserve fund (buffer funds) in amount of IDR.0, 2 trillion, (2) higher education programs, with a budgetary allocation amounting to IDR.28, 6 trillion, and (3) quality improvement and teachers welfare program, with a budgetary allocation amounting to IDR.11, 5 billion. Ministry of Defense In the National Budget (APBN) 2011, the Ministry of Defense is determined to obtain a budgetary allocation in amount of IDR.47, 5 billion. This amount in nominal terms increases in amount of IDR. 4, 6 trillion or 10.7 percent if it is compared with the budgetary allocation ceiling for the Ministry of Defense in the APBN-P of 2010 amounting to IDR.42, 9 trillion. Such budgetary allocation is sourced from a pure Rupiah amounting to IDR.41, 1 trillion, and OLG / DL (Overseas / Domestic Loan and Grant) in amount of IDR.6, 4 trillion. The budgetary allocation for the Ministry of Defense in 2011 will be utilized to implement various programs, among others : (1) management and land dimension operation organizing program, with a budgetary allocation amounting to IDR.17, 9 trillion, (2) management and marine dimension operation organizing program, with a budgetary allocation in amount of IDR. 4, 6 trillion; and (3) modernization program for defense equipment and non-defense equipment and air facilities and dimension development, with a budgetary allocation in amount of IDR. 4, 2 trillion. The Indonesian Budget Overview

38 Ministry of Religious Affairs Ministry of Religious Affairs in the National Budget 2011 is stipulated to obtain a budgetary allocation of IDR.32, 1 trillion. This amount in nominal terms rises in amount of IDR.2, 0 trillion or 6.6 percent if it is compared with the budgetary allocation ceiling for the Ministry of Religious Affairs in the APBN-P of 2010 amounting to IDR.30, 1 trillion. The budgetary allocation for the Ministry of Religious Affairs in the National Budget (APBN) in 2011 is sourced from a pure Rupiah amounting IDR.30, 7 trillion, OLG (Overseas Loan & Grant) amounting to IDR.756, 7 billion, and ceiling of non-tax revenue use amounting to IDR.652, 8 billion. The budgetary allocation for the Ministry of Religious Affairs in the National Budget of 2011 will be utilized to implement various programs, such as: (1) Islamic Education Program, with a budgetary allocation amounting to IDR.25, 8 trillion, (2) supporting program for management and implementation of other technical tasks of the Ministry of Religious Affairs, with a budgetary allocation amounting to IDR.1, 3 trillion; and (3) Islamic community mentoring program, with a budget allocation amounting to IDR.2, 0 trillion. State Police of the Republic of Indonesia In the National Budget 2011, the Indonesian National Police (Polri) is determined to obtain a budgetary allocation in amount of IDR.29, 8 trillion. This amount increases to IDR.2, 0 billion or 7.1 percent if it is compared with the budgetary allocation ceiling for the Indonesian National Police in the APBN-P 2010 amounting to IDR.27, 8 trillion. The said budgetary allocation for the Indonesian National Police in the APBN 2011 is sourced from a pure Rupiah in amount of IDR.24, 8 trillion, OLG (Overseas Loan & Grant) / DLG (Domestic Loan & Grant) in amount of IDR.1, 8 trillion, and the ceiling of non-tax revenue use amounting to IDR.3, 1 trillion. The budgetary allocation for the Indonesian National Police in Chapter 1 The National Budget 2011, The Revise National Budget 2011

39 will be utilized to implement various programs, such as: (1) Supporting Program for Indonesian Police management and other technical duties implementation, with a budgetary allocation amounting to IDR.19, 9 trillion, (2) public order and security maintenance program, with a budgetary allocation in amount of IDR. 4, 4 trillion; and (3) program to improve infrastructure & facilities for police apparatus, with a budgetary allocation of IDR. 4, 1 trillion. Furthermore, regarding the budgetary allocation for central government according to the function in the National Budget (APBN) 2011 is dominated by the public service function, which is then followed successively by economic function, educational function, defense function, housing and public facilities functions, public order and safety function, health function, and other functions, such as environmental function, tourism and cultural functions, religious function and social protection function. Relatively the high budgetary allocation portion in the public service function indicates that the giving of public services function to the society is the main function of government, which consists of administering subsidies, debt interest payments, management support and implementation of other technical tasks, diplomacy organizing and international cooperation, arrangement of population administration, people empowerment, local/regional development, and research and development of science and technology. The budgetary allocation ratio of Central Government according to function in can be seen in Table 4. The Indonesian Budget Overview

40 TABLE 4 CENTRAL GOVERNMENT S, ACCORDING TO FUNCTION, CODE FUNCTION (trillion rupiah) APBN % of PDB APBN- P % of PDB APBN % of PDB 01 PUBLIC SERVICES 495,32 8,3 528, ,17 7,4 02 DEFENSE 20,97 0,4 21,43 0,3 47,42 0,7 03 PUBLIC ORDERLINESS AND SECURITY 14,93 0,2 16,91 0,3 22,07 0,3 04 ECONOMY 57,36 1,0 61,20 1,0 101,41 1,4 05 ENVIRONMENT 7,89 0,1 8,58 0,1 11,07 0,2 06 HOUSING AND PUBLIC FACILITIES 20,91 0,3 21,51 0,3 23,42 0,3 07 HEALTH 18,00 0,3 19,80 0,3 13,65 0,2 08 TOURISM AND CULTURE 1,42 0,0 1,53 0,0 2,90 0,0 09 RELIGION 0,91 0,0 0,94 0,0 1,40 0,0 10 EDUCATION 84,09 1,4 97,23 1,6 91,48 1,3 11 SOCIAL PROTECTION 3,46 0,1 3,61 0,1 4,58 0,1 TOTAL 725,26 12,1 781,51 12,5 836,57 11,9 Source : Ministry of Finance Further explanation on some of the budgetary allocations to the Central Government according to their functions shall be as follows. Budgetary Allocation To the Function of Public Service In the APBN (National Budget) 2011, the budget allocated to the function of public service shall be IDR.517, 2 trillion (7.4 percent of PDB), which means lower, namely amounting to IDR.11, 6 trillion, or about 2.2 percent if it is compared with the function of public service to the APBN-P 2010 in amount of IDR.528, 8 trillion (8.5 percent of PDB). This said amount consists of: (1) the budgetary allocation to the sub-functions of other public services in amount of IDR.294, 7 trillion or 57.0 percent of the budget for the function of public service, (2) the budgetary allocation to the Government s sub-function of loan in amount of IDR.115, 3 trillion (22, 3 percent), (3) the budgetary allocation to the sub-functions of executive and 36 Chapter 1 The National Budget 2011, The Revise National Budget 2011

41 legislative agencies, financial and fiscal agencies and foreign affairs amounting to IDR.89, 6 trillion (17.3 percent), and (4) The remaining budgetary allocation in amount of IDR.17, 6 trillion (3.4 percent ) shall be distributed to the other subfunctions, namely, sub-function of public services, sub-function of basic research and scientific and technological development, sub-function of public service research and development and sub-function of regional development. Budgetary Allocation to the Educational Function The budgetary allocation to the educational function that reflects efforts to provide public services in educational sector, from year to year, has been sought to keep increasing. Such increased budgetary allocation to the educational function is related to the government s efforts to realize the constitutional mandate so as to allocate the educational budget at least 20 percent of the National Budget (APBN). In 2011, as a result of the compilation of budget for various educational programs / activities performed by some state ministries / agencies, the budgetary allocation to the educational function of M / A reaches to IDR.91, 5 billion (1.3 percent of PDB). The said amount consists of: (1) the budgetary allocation to the subfunction of primary education in amount of IDR.10, 3 trillion or 11.3 percent of the budget allocated to the educational function, (2) the budgetary allocation to the sub-function of secondary education in amount of IDR.3, 9 trillion (4.3 percent) (3) the budgetary allocation to the sub-function of higher education in amount of IDR.35, 2 trillion (38.5 percent), (4) the budgetary allocation to the sub-function of educational aid services in amount of IDR.16, 7 billion (18,2 percent), (5) the budgetary allocation to the sub-function of other educations in amount of IDR.14, 0 trillion (15,3 percent), and (6) The remaining budgetary allocation in amount of IDR.11, 4 trillion (12,4 percent) is distributed to other sub-functions, including the budgetary allocation to the sub-functions of earlyaged children education, non-formal and informal education, service education, The Indonesian Budget Overview

42 religious education, and research and development education, as well as youth and sports education and coaching. In The National Budget 2011, the total educational budget amounts to IDR.249, 0 billion or percent of the total national budget, consisting of: (1) educational budget in state ministries / agencies (M/A) amounting to IDR.89, 7 trillion, which is the educational budgetary allocation, including for payment of teachers/ educators salaries, beyond the budgetary allocation used for service education, (2) educational budget transferred to the regions in amount of IDR.158, 2 trillion, and (3) national educational development funds amounting to IDR.1, 0 trillion. Budgetary Allocation to the Economic Function Efforts to accelerate a qualified economic growth by strengthening stamina of the economy supported by the development of transportation, agriculture, infrastructure, and energy budget shall be funded with the budget of economic function. In 2011, the budgetary allocation to the economic function amounts IDR.101, 4 trillion (1.4 percent of GDP), which if it is compared with the economic functions of the National Budget in 2010, it amounted to IDR.61, 2 trillion, means a higher amount of IDR.40, 2 trillion, or an increase of approximately 65.7 percent. The said amount consists of: (1) the budgetary allocation to the sub-function of transportation in amount of IDR.47, 0 trillion or 46.3 percent of the economicfunction budget, (2) the budgetary allocation to the sub-functions of agriculture, forestry, fishery, and marine sector in amount of IDR.15, 9 trillion (15.7 percent), (3) the budgetary allocation to the sub-function of irrigation in amount of IDR.12, 1 trillion (12.0 percent), (4) the budgetary allocation to the sub-functions of fuel and energy in amount of IDR.10, 9 trillion (10.7 percent); and (5) the remaining budgetary allocation in amount of IDR.15, 5 billion (15.3 percent) is distributed to other sub-functions, including the sub-function of trade, business development, 38 Chapter 1 The National Budget 2011, The Revise National Budget 2011

43 cooperatives and Small and Middle-Scale Enterprises (SMSE), manpower, mining, industry and construction, telecommunications, economic research and development, and other economic sub-functions. Budgetary Allocation to the Defense Function Meanwhile, the budgetary allocation to the defense function in the APBN (National Budget) 2011 should be sought to increase from the previous year. The increased budgetary allocation to the defense function is related to the government s efforts to improve the national capability of defense as an effort to realize one of the national objectives as stated in the preamble of the 1945 Constitution, which is to protect the whole nation and the entire homeland of Indonesia. In 2011, the budgetary allocation to the defense function, representing a result of the compilation of budget for various defense programs implemented by the Ministry of Defence / The Indonesian National Armed Forces (including the Headquarters, Army, Navy and Air Force), the National Resilience Agency (Lemhannas), and the National Security Council (Wantannas), is provided in amount of IDR.47, 4 trillion (0.7 percent of PDB). If it is compared with the National Budget of 2010 amounting to IDR.21, 4 trillion (0.3 percent of PDB), then the budgetary allocation to the defense function in 2011 is higher amounting to IDR.26, 0 trillion or percent of the allocated ceiling of the defense-function budget in the National Budget of The said amount consists of: (1) the budgetary allocation to the sub-function of national defense in amount of IDR.43, 1 trillion (90,9 percent of the defense-function budget), (2) the budgetary allocation to the sub-function of defense supports in amount ofidr.4, 2 trillion (8,9 percent ) and (3) the budgetary allocation to the sub-function of defense research and development in amount of IDR.108, 9 billion (0.2 percent). The Indonesian Budget Overview

44 Budgetary Allocation to the Orderliness and Security Function Meanwhile, the budgetary allocation to the orderliness and security function, which indicates the amount of budget allocated to provide public services in the orderliness and security sector, also should be sought to increase from the previous year. The increased budgetary allocation to the orderliness and security function is related to the Government s efforts to realize the constitutional mandate to protect the whole Indonesian nation and the entire homeland of Indonesia. In 2011, the budgetary allocation to the orderliness and security function representing a result of the compilation of budget for various orderliness and security activities performed by some state ministries / agencies reached to IDR.22, 1 trillion (0.3 percent of PDB). If it is compared with its national budget in 2010 amounting to IDR.16, 9 trillion (0.3 percent of PDB), it means a higher amount of IDR.5, 2 trillion, or 30.5 percent. The budgetary allocation to the orderliness and security function in 2011 consists of: (1) the budgetary allocation to the sub-function of police in amount of IDR.10, 5 trillion or 47.7 percent of the orderliness and security function budget, (2) the budgetary allocation to the sub-function of judiciary in amount of IDR.6, 1 trillion or 27.7 percent of the orderliness and security function budget, (3) the budgetary allocation to the sub-function of legal assistance in amount of IDR.2, 5 trillion (11.1 percent), (4) the budgetary allocation to the sub-function of other orderliness and security in amount of IDR.2, 1 trillion (9.7 percent), (5) the budgetary allocation to the sub-function of disaster handling in amount of IDR.812, 7 trillion (3.7 percent), and (6) the budgetary allocations to the sub-function of orderliness and security research and development in amount of IDR.23, 0 billion (0.1 percent). 40 Chapter 1 The National Budget 2011, The Revise National Budget 2011

45 Transfers to Regions in 2011 The budgetary policy of transfer to regions in 2011 will be aimed at (1) increasing the local fiscal capacity and reducing the fiscal gap between the Central Government and the Regional Government (vertical fiscal imbalance) and among regions (horizontal fiscal imbalance), (2) synchronizing the funding needs in the regions in line with the division of government affairs among central, provincial, and district / municipal governments, (3) enhancing the quality of local public services and reducing imbalances of inter-regions public services, (4) supporting the national fiscal sustainability in framework of macroeconomic policy, (5) enhancing the competitive ability of the regions, (6) improving the regional capability in discovering the regional economic potencies, (7) improving the efficiency of utilization of national resources, and (8) enhancing synchronization between national development plans and regional development plans. To support the said policy direction of the transfers to regions, in the National Budget 2011 the budgetary allocation for Transfers to regions is provided in amount of IDR.393, 0 trillion or 5.6 percent of PDB. Nominally, the said amount means an increase of IDR.48, 4 trillion, or 14.0 percent of the budgetary allocations for Transfers to Regions in the National Budget of 2010 amounting to IDR.344, 6 trillion. The increase in the budget of transfers to regions in the National Budget of 2011 is besides attributed to an increase in the Balancing Fund, also caused by an increase in the Special Autonomy Funds and adjustment, especially the new components in the post of Adjustment Fund, the School Operational Aids (BOS) and regional infrastructure adjustment funds (RIAF). Further information about the development of the allocated component of transfer to the regions in the National Budget of 2011 can be described as follows. In the National Budget of 2011, the allocated Balancing Fund was provided in amount of IDR.334, 3 trillion or 4.8 percent of PDB. Nominally, the said amount The Indonesian Budget Overview

46 represents an increase of IDR.20, 0 trillion or 6.3 percent of the allocated Balancing Fund in the National Budget of 2010 amounting to IDR.314, 4 trillion. Of the total allocated Balancing Fund, the amount of 25.0 percent is DBH, the amount of 67.5 percent was DAU and the amount of 7.5 percent was DAK. In The National Budget 2011, the allocated special autonomous fund is provided in amount of IDR.10, 4 trillion, in the following details: (1) Special Autonomous Fund for Papua amounted to IDR.4, 5 trillion. In accordance with the Law No. 35 of 2008, the Special Autonomous Fund for Papua is distributed to the Province of Papua and the Province of West Papua. (2) Special Autonomous Fund for Aceh Province amounts to IDR.4, 5 trillion. (3) Special Autonomous Additional Fund for Infrastructure in Papua and West Papua amounted to IDR.1, 4 trillion. In accordance with the Law Number 35 of 2008, The said Additional Fund for Infrastructure in Papua and West Papua is distributed to Papua Province and West Papua Province. Furthermore, in the National Budget 2011, the allocated adjustment funds amounts to IDR.48, 2 trillion consisting of: (1) Professional Allowance for Teacher (PAFT) amounting to IDR.18, 5 billion. The allocation of PAFT (Professional Allowance for Teacher) has been set in line with the Regulation No. 41 of 2009 on Professional Allowances for Teachers and Lecturers, which have been allocated commencing in The said funds shall be provided to the teachers and lecturers who have Certificates of Teaching as appreciations for their professionalism, in accordance with their authorities. (2) School Operational Aids (SOA/BOS) amounting to IDR.16, 8 trillion. BOS (School Operational Aids) is a fund used specially for non-personnel costs for a primary education unit as the executor of the compulsory education program, and may be possible to fund some other activities according to the technical instructions of the Minister of National Education. (3) Edditional Funds of PNSD Teacher s earning amounting to IDR.3, 7 trillion. 42 Chapter 1 The National Budget 2011, The Revise National Budget 2011

47 These funds shall be awarded to the teachers who have not yet received any Professional Allowance for Teacher. The amount of funds provided shall be IDR , 00 per month for 12 months. (4) Regional Incentive Fund (RIF) amounting to IDR.1, 4 trillion. Regional Incentive Fund shall be primarily allocated to the regions/districts having good performance, financial criteria and economic performance criteria and welfare, and keeping on seeking to realize a good governance. (5) Regional Infrastructure Adjustment Fund (RIAF) amounting to IDR.7, 7 trillion. This fund is the adjustment fund to be allocated to certain regions for accelerating regional development in the framework of fiscal decentralization enforcement. (6) Less paid Facility and infrastructure Funds for West Papua Province Budget in the fiscal budgetary Year of 2008 amounting to IDR.100, 5 billion. (7) The distribution of this less paid fund shall be performed upon a review report by the controlling apparatus (BPK or BPKP). TABLE 5 TRANSFER TO REGIONS, (trillion rupiah) Description % of APBN-P APBN PDB BALANCING FUND REVENUE SHARING FUND GENERAL ALLOCATION FUND SPECIAL ALLOCATION FUND SPECIAL AUTONOMY AND ADJUSTMENT FUNDS SPECIAL AUTONOMY FUND Special Autonomy Fund Additional Special Autonomy fund for Infrastructures in Papua Province ADJUSTMENT FUND 314,4 89,6 203,6 21,1 30,2 9,1 7,7 1,4 21,2 5,0 0,0 3,3 0,3 0,5 0,1 0,1 0,0 0,3 334,3 83,6 225,5 25,2 58,7 10,4 9,0 1,4 48,2 T O T A L 344,6 5,5 393,0 5,6 Source: Ministry of Finance % of PDB 4,8 0,0 3,2 0,4 0,8 0,1 0,1 0,0 0,7 The Indonesian Budget Overview

48 Budgetary Financing in 2011 In the National Budget 2011, budget deficit was provided in amount of IDR.124, 7 trillion, or 1.8 percent of PDB. This budgetary deficit financing will be met through debt financing sources and non-debt financing sources. Funding from non-debt sources (in net) in 2011 is planned in negative amount of IDR.2, 4 trillion, while the budgetary financing sourced from the debt (in net) is planned to reach IDR.127, 0 trillion or 1.8 percent of PDB. Thus, in 2011 debt financing remains a major source of financing the National Budget. The debt financing is targeted at IDR.127, 0 trillion consisting of net government securities amounting to IDR.126, 7 trillion, the net foreign loan is in negative amount of IDR.0, 6 trillion and domestic loan amounts to IDR.1, 0 trillion. Financing through debt is a consequence of a deficit budget policy, although in the policy of balanced budgets or surpluses, debt financing is still being done, among others : (a) to finance expenditures, including due debt, (b) to create benchmark risk free asset in the financial market and government debt portfolio management, (c) to perform engagements of loan agreements with lenders, and the possibility of the withdrawal period is still ongoing, especially for multi-year project, both for M / A (Ministries / Agencies) projects and for forwarding government loans to the State-Owned Enterprises and / or local government. In the National Budget 2011, the need of expenditure for financing that must be met is estimated at IDR.150, 5 trillion (2.1 percent of PDB), including repayment of principal for due SBN (government securities) amounting to IDR.75, 0 trillion, forwarding loan of IDR.11, 7 trillion, installment repayment for foreign loan principal amounting to IDR.47, 8 trillion, and the need of expenditure for financing non-debt estimated at IDR.16, 0 trillions. When added to the budgetary deficit financing needs of IDR.124, 7 trillion, then all financing revenue needs (gross) required in 2011 will reach IDR.275, 2 trillion. Although the government has tried 44 Chapter 1 The National Budget 2011, The Revise National Budget 2011

49 to maximize the gross financing revenue sources through non-debt sources, but it is expected to be only able to meet about 4,9 percent of all gross financing revenue needs, due to limitations of the source and amount. The financing revenue derived from the gross debt in 2011 is planned to reach at IDR.261, 6 trillion (3.7 percent of PDB). This amount includes the issuance of government securities amounting to IDR.201, 7 trillion, the withdrawal of domestic loans amounting to IDR.1, 0 trillion, and the withdrawal of foreign loans amounting to IDR.58, 9 trillion. The said foreign loans consist of programed loans amounting to IDR.19, 8 trillion and the withdrawal of project loans amounting to IDR.39, 1 trillion. Of the total loan withdrawal plan of the project, amounting to IDR.11, 7 trillion of which loan will be forwarded to the State-Owned Enterprises and/or local government. Any budgetary financing drived from non-debt (in net) in the National Budget of 2011 is planned in a negative amount of IDR.2, 4 trillion, which means a decrease of IDR.27, 8 trillion if it is compared with its target in the Revised National Budget (APBN-P) of 2010 amounting to IDR.25, 4 trillion. The said negative amount of non-debt financing indicates that the financing expenditure is bigger than the financing revenue. This case is mainly due to the use of SAL as a source of non-debt financing in 2011, which is much lower than the Revised National Budget (APBN-P) The non-debt financing in the National Budget of 2011 consists of: (1) domestic banks through the repayment revenue for forwarding loan amounting to IDR.6, 8 trillion, (2) RKUN for financing the government investment credits amounting to IDR.853, 9 billion, (3) SAL amounting to IDR.5, 0 trillion, (4) the privatization revenue amounting to IDR.340, 0 billion, (5) revenues from the outcome of asset management amounting to IDR.583, 1 billion, (6) and government investment funds and State Investment in a negative amount of IDR.13, 9 trillion, (7) National education development funds in a negative amount of IDR.1, 0 trillion and (8) guarantee obligations in a negative amount of IDR.1, 0 trillion. The Indonesian Budget Overview

50 Table 6 SUMMARY OF NATIONAL BUDGET, Description A. STATE REVENUE AND GRANTS I. DOMESTIC REVENUE (trillion rupiah) 1. TAX REVENUES Tax Ratio (% of PDB) a. Domestic Taxes b. International Commercial Taxes 2. NON-TAXABLE STATE REVENUE a. Natural Resource Revenues b. Profit transfer from SOE c. Other non-taxable state revenues d. PSA (Public Service Revenue) Revenues II. GRANTS B. STATE I. CENTRAL GOVERNMENT M / A Expenditure Non M / A Expenditure II. TRANSFER TO REGION 1. Balancing Funds a. Revenue Sharing Fund b. General Allocation Fund c. Special Allocation Fund 2. Special Autonomy and Adjustment Funds C. PRIMARY BALANCE D. BUDGETARY SURPLUS / DEFICIT (A-B) % Deficit of PDB E. FINANCING (I + II) I. DOMESTIC FINANCING II. FOREIGN FINANCING (net) APBN-P 992,4 990,5 743,3 11,9 720,8 22,6 247,2 164,7 29,5 43,5 9,5 1, ,1 781,5 366,1 415,4 344,6 314,4 89,6 203,6 21,1 30,2 (28,1) (133,7) (2,1) 133,7 133,9 (0,2) APBN 1.104, ,2 850,3 12,1 827,2 23,0 250,9 163,1 27,6 45,2 15,0 3, ,6 836,6 432,8 403,8 393,0 334,3 83,6 225,5 25,2 58,7 (9,4) (124,7) (1,8) 124,7 125,3 (0,6) 46 Chapter 1 The National Budget 2011, The Revise National Budget 2011

51 The Revise National Budget 2011 The implementation development of the National Budget 2011, and its projections till the end of the year may be effected by several factors, especially : (a) the development of macro-economic indicators as a basis for calculating the amount of National Budget, (b) enforcement of the policy measures planned in thenational Budget of 2011; (c ) requirement of additional priority budget in 2011, and (d) the measures anticipated in order to secure the enforcement of APBN (National Budget) In the said framework, amendment to the National Budget of 2011 is aimed at, among others: (a) anticipating any change in macro-economic indicators in 2011 in order that various amounts of APBN-P become more realistic and can be well enforced ; (b) maintaining the national stability on prices of goods and services, and (c) accelerating the implementation of national priority development programs in 2011 and the medium-term national priority development program. The said amendment to the National Budget of 2011 shall be thoroughly made in order to accommodate all the changes in income, expenditure and budgetary deficit and financing. Change in Macroeconomic Assumption on the National Budget of 2011 By observing the development of global and domestic economic conditions, it is necessary to adjust the macro-economic assumption which is a basis for compilation of the APBN-P in order to be more realistic. The Indonesian Budget Overview

52 1 TABLE 7 BASIC ASSUMPTION OF MACROECONOMICS, 2011 Economic Indicators Economic Growth (%) APBN 6, APBN-P 6,5 2 Inflation (%) 5,3 5,65 3 Exchange Rate (IDR / USD) SPN 3-Month Interest Rate (%) 6,5 *) 5,6 5 ICP Oil Price (USD / barrel) 80,0 95,0 6 Oil Lifting (thousand barrels / day) 970,0 945,0 *) National Budget of 2011 by using SBI 3-month interest rate assumption. Source: Ministry of Finance Principles of Amendment to The National Budget 2011 In the APBN-P 2011, state revenues and grants revenues are expected to be changed from IDR.1.104, 9 trillion in the National Budget of 2011 to IDR.1.169, 9 trillion, or having an increase of IDR.65, 0 billion (5.9 percent). The said increase in the estimated revenues and grants in the National Budget of 2011 was sourced either from tax revenues or from non-taxable state revenue (NTSR). The planned tax revenues have an increase of IDR.28, 4 trillion (3.3 percent) from the original target of IDR.850, 3 trillion in the National Budget of 2011 to IDR.878, 7 trillion. Meanwhile, the non-taxable state revenues are expected to have an increase of IDR.35, 7 trillion (14.2 percent) from the original target of IDR.250, 9 trillion in the National Budget of 2011 to IDR.286, 6 trillion. Similarly, the revenue of grants was also changed, from IDR.3, 7 trillion in the National Budget of 2011 to IDR. 4, 7 trillion, or having an increase of IDR.922, 6 billion (24.7 percent). Changes of state revenue plan and grants in 2011 were influenced by the following 48 Chapter 1 The National Budget 2011, The Revise National Budget 2011

53 conditions. First, changes in macroeconomic projections, such as ICP (Indonesia Crude Price) from $ 80 to $.95 per barrel, the decline in oil lifting target from 970 thousand barrels per day (bpd) to 945 thousand bpd, as well as the appreciation of the rupiah exchange rate from IDR to IDR per USD, all of which affect tax revenue and non-taxable state revenues from oil and gas. Second, the increased economic activity, especially from foreign trade, and the high CPO prices pushing an increase in customs revenue. State budget in the Revised National Budget of 2011 is planned to be changed from the original ceiling of IDR.1.229, 6 trillion in the National Budget of 2011 to IDR.1.320, 8 trillion or it has an increase of IDR.91, 2 trillion (7.4 percent). The increased state expenditure estimates in 2011 was sourced from the increase in Central Government expenditure and transfers to regions. The Central Government Expenditures is planned to be changed from IDR.836, 6 trillion in the National Budget of 2011 to IDR.908, 2 trillion, or it has an increase of IDR.71, 7 trillion (8.6 percent). Meanwhile, the transfer to regions is planned to be changed from IDR.393, 0 trillion in the National Budget of 2011 to IDR.412, 5 trillion, or it has an increase of IDR.19, 5 trillion (5.0 percent). Change in the Central Government Budget of 2011 was influenced by several factors. First, changes in macroeconomic assumptions, especially ICP oil prices into USD95/barel ICP (Indonesia Crude Price), resulting in the increasing of energy subsidy budget. Second, changes in electrical parameters of subsidies, mainly due to late completion of the commercial operation date (COD) of steam power plant (PLTU). Third, the policy on subsidized fuel restriction has not been yet enforced, which is estimated to have an impact on the increasing of the volume of subsidized fuel consumption, thus it adds burden on fuel subsidies in Fourthly, accommodating additional budget for urgent needs and priorities in order to accelerate development in Such change in Central Government Budget is done in order to accommodate the financing for policy The Indonesian Budget Overview

54 measures and various new priority programs, including (a) additional stabilization of food prices, (b) additional pro-people program for cluster 4, and (c) budget for reward and punishment of M / A expenditure. Fifth, additional education budget as a result of the increase in the volume of state expenditure, to keep the education budget ratio fixed in 20 percent. Sixth, the strengthening of the rupiah exchange rate from which has been projected in the National Budget of 2011 having an impact on savings of interest payments on foreign debt. Meanwhile, changes in transfers to regions in the National Budget of 2011 were primarily due to higher profit-sharing funds as a result of the rising target of non-taxable state revenues from natural resources of oil and gas in 2011, from amounting to IDR.149, 3 trillion to IDR.173, 2 trillion. The plans to increase the state revenues and grants of IDR.65, 0 billion (5.9 percent) and to increase the state expenditure of IDR.91, 2 trillion in the Revised National Budget of 2011 have resulted in increasing the budgetary deficit target of IDR.26, 2 trillion, namely from the original target of IDR.124, 7 trillion (1.8 percent of GDP) in the National Budget of 2011 to IDR.150, 8 trillion (2.1 percent of GDP). The increased budget deficit in the Revised National Budget of 2011 is planned to be financed from the increase in domestic financing, from the original plan of 125, 3 trillion in the National Budget of 2011 to IDR.153, 6 trillion, while the net foreign financing will be changed to be minus IDR.2, 2 trillion, from in a minus amount of IDR.609, 5 billion to in a minus amount of IDR.2, 8 trillion. Changes in domestic financing plans in 2011 were primarily resulting from : (a) the increased use of plus budget balance (SAL) fund in amount of IDR.30, 4 trillion, from the original plan of IDR.5, 0 trillion in the Nasional Budget of 2011 to IDR.35, 3 trillion; and (b) additional government investment funds and state equity to support infrastructure construction, people business credit development, and housing development. 50 Chapter 1 The National Budget 2011, The Revise National Budget 2011

55 TABLE 8 Summary of National Budget and Revise National Budget 2011 (trillion rupiah) Description APBN APBN-P A. State Revenues and Grant Revenue 1.104, ,9 Difference to APBN 65,0 I. Domestic Revenues 1.101, ,3 64,1 1. Tax Revenues 850,3 878,7 28,4 2. Non-Taxable State 250,9 286,6 35,7 Revenues II. Grant Revenue 3,7 4,7 0,9 B. State expenditures 1.229, ,8 91,2 I. Central Government 836,6 908,2 71,7 Expenditures 432,8 461,5 28,7 A. M / A Expenditure 403,8 446,7 42,9 B. Non M / A Expenditure 393,0 412,5 19,5 II. Transfers to Regions (9,4) (44,3) (34,8) C. Primary Balance (124,7) (150,8) (26,2) D. Budgetary Surplus / Deficit (A-B) (1,8) (2,1) (0,3) % t Deficit of PDB E. Financing (I + II) 124,7 150,8 26,2 I. Domestic Financing 125,3 153,6 28,3 II. Foreign Financing (Net) (0,6) (2,8) (2,2) Source: Ministry of Finance Change of State Revenue and Grant Revenue Any revision/change made to the state revenue and grant revenue in the APBN-P 2011 is based on some major considerations namely : (a) significant change of macroeconomic assumption especially the deviation prognoses of ICP (Indonesia Crude Price) exceeding 10% in 2011; (b) the achieved realizations in 2010 and The Indonesian Budget Overview

56 in the current year; and (c) world economic development and its effects to the Indonesia economy especially those in connection with food commodities and energy. Based on such matters, the state revenue and grant in the APBN-P 2011 has been targeted at IDR.1.169,9 trillion. In detail, the said target consists of domestic revenue amounting to IDR.1.165,3 trillion and grant amounting to IDR.4,7 trillion. If it is compared with the target in the National Budget 2011 reaching IDR.1.104,9 trillion, then the target of the state revenue and grant in the APBN-P 2011 is higher, namely amounting to IDR.65,0 trillion or 5,9 percent. Some factors causing the increase in such revenues, among others are: (a) change of assumption on ICP (Indonesia Crude Price) from USD80.0 per barrel to USD.95.0 per barrel; (b) the achieved realization of the state revenue in 2010 exceeding the planned target and (c) sufficiently stable development of macroeconomic indicator. Meanwhile, if it is compared with the realization of 2010, the target of state revenues and grant in the APBN-P 2011 has an increase of IDR.174,6 trillion or 17.5 percent, in the following details: the domestic revenues has an increase of 17.4 percent and the grants increase to 54,2 percent. Change of Taxation Revenue In the APBN-P 2011, the revenue from taxation is predicted to reach IDR.878,7 trillion or to get an increase of IDR.28,4 trillion (3,3 percent) if it is compared with the target of APBN Such amount has not yet included the tax receivables still unpaid until now. This taxation revenue consists of the domestic taxes predicted to reach IDR.831,7 trillion or to get an increase amounting to IDR.4,5 trillion (0,5 percent) and international commercial taxes trade predicted to reach IDR.46,9 trillion or increase to IDR.23,9 trillion (104,0 percent) if it is compared with those targeted in APBN Chapter 1 The National Budget 2011, The Revise National Budget 2011

57 Most revenues resulted from the domestic tax in the APBN-P are originated from the contributions of PPh (income tax) reaching IDR.432,0 trillion or having an increase of IDR.11,5 trillion or 2,7 percent of those targeted in the APBN 2011 amounting to IDR.420,5 trillion. Such an increase is due to an increase in the ICP assumption and realization basis as the ground for calculating the PPh migas (gas and oil income tax). The ICP assumptions used to calculate the gas and oil income tax in the APBN-P 2011 and the APBN 2011 are USD95,0 per barrel and USD80,0 per barrel respectively. The revenue from gas and oil income tax (PPh migas) in the APBN-P 2011 is targeted to reach IDR.65,2 trillion or to have an increase of IDR.9,7 trillion (17,4 percent) from the National Budget If it is compared with the realization in 2010, the revenue from oil and gas income tax in the APBN-P 2011 has increased to the amount of 6,4 trillion or 10,8 percent. In 2010, the revenue realization from oil and gas income tax reached IDR.58,9 trillion and ICP assumption reached USD79,4 per barrel. In APBN-P 2011, the revenues targeted from PPN (VAT) and PPn BM are predicted to reach IDR.298,4 trillion or to have decrease amounting to IDR.13,7 trillion or negative 4,4 percent of the target of APBN 2011 amounting to IDR.312,1 trillion. Such decrease has been caused by the existence of an adjustment of the calculation basis (baseline) based on the realization of 2010 without taking into account the tax being borne by the Government. However, if it is compared with the realization of 2010, the target of PPN (VAT) and PPnBM in the APBN-P of 2011 has gone through an increase amounting to IDR.67,8 trillion or 29,4 percent. This fact is especially supported by the increase in Value-Added Tax for import amounting to 54,8 percent resulted from a higher import realization. In the APBN-P 2011, the revenue from PBB (Tax on Land and Building) is predicted to reach IDR.29,1 trillion or to have an increase of IDR.1,4 trillion (5,0 percent) if it is compared with the target in the APBN Such an increase is especially influenced by the increase in NJOP (selling value of Tax object) as the basis The Indonesian Budget Overview

58 of calculating PBB if it is compared with that used in the previous year. Meanwhile, if it is compared with the realization of 2010, such predicted revenue of PBB has an increase of IDR.477,2 billion or 1,7 percent. The revenue from excises in the APBN-P 2011 is predicted to reach IDR.68,1 trillion or to have an increase of IDR.5,3 trillion (8,5 percent) if it is compared with the target in the APBN This is especially supported by the success of the implementation of eradication program of illegal excise. If it is compared with the realization of the excise revenue in 2010 amounting to IDR.66,2 trillion, the estimated revenue from the excise in the APBN-P 2011 increases to the amount of IDR.1,9 trillion (2,9 percent). This increase is predicted as the result of an increase in the excise production from tobacco and ethyl-alcohol containing beverages production that until May 2011 has an increase of 9,7 percent and 25,5 percent respectively if it is compared with the realization of the same period in the previous year. In the APBN-P 2011, the revenue from other taxes is predicted to reach IDR.4,2 trillion or almost the same as the target of in the APBN If it is compared with the realization of the same in 2010, this revenue from other taxes is predicted to have an increase amounting to IDR.225,0 billion or 5,7 percent. Such an increase is resulted from an increase in the number of economic transactions using the sealed documents in line with the better condition of the global and domestic economy in In the APBN-P 2011 the revenue from import duty is predicted to reach IDR.21,5 trillion or to have an increase amounting to IDR.3,6 trillion (20,1 percent) if it is compared with its target in the APBN If it is compared with the realization in 2010, the revenue from import duty in the APBN-P 2011 has an increase of 7,4 percent. Such an increase is affected by the increase in the value of non-oil and -gas import that until June 2011 has reached IDR.64.4 billion or increased 54 Chapter 1 The National Budget 2011, The Revise National Budget 2011

59 to 29,2 percent if it is compared with those realized within the same period of the previous year. From the total import value, most of them come from the South East Asia Countries, amounting to 22.6 percent and from China and Japan amounting to 18,7 percent and 13,4 percent respectively undergoing the growth of 26,8 percent, 33,2 percent and 13,4 percent respectively if it is compared with its realization within the same period of the previous year.. The revenue targeted from export-duty in the APBN-P 2011 is predicted to reach IDR.25,4 trillion or to have a significant increase amounting to IDR.20,3 trillion (398,1 percent) if it is compared with its target in the APBN This high prediction on the revenue of export-duty is caused by the increase in tariff of export duty as the effect of an increase in the price of crude palm oil (CPO) at International market. Change of Non-taxable State Revenues (NTSR) Based on the change of macroeconomic assumption and principles of policies on NTSR (Non-Taxable State Revenue) to be applied, NTSR in the APBN-P 2011 is targeted to reach IDR.286,6 trillion, to get a higher amount of IDR.35,7 trillion or 14,2 percent of its target established in the APBN The revenue from the Natural Resources (NR) in 2011 is targeted to reach IDR.192,0 trillion, to get a higher amount of IDR.28,9 trillion or 17,7 percent of the target stipulated in the APBN 2011 amounting to IDR.163,1 trillion. This change of the revenue target of the Natural Resources especially as influenced by the increase in the revenue from oil and gas is predicted to reach IDR.173,2 trillion. This revenue from Oil and Gas in 2011 has an increase of IDR.23,8 trillion or 16,0 percent if it is compared with its target in the APBN 2011 amounting to IDR.149,3 trillion. Meanwhile, the revenues from natural resources of non-oil and gas consisting of those from the general mining, forestry, fishery and geothermal mining are predicted to reach IDR.18,8 trillion or to have an The Indonesian Budget Overview

60 increase of 36,5 percent of its target in the APBN of Meanwhile, the revenue obtained from the Government s portion upon the profit of State-Owned Corporation (dividend) in the APBN-P 2011 is predicted to reach IDR.28,8 trillion. This is in line with the realizable operational profit of 2011 used as the basis of calculating the dividend of Such amount is inclusive of the granting of PMN to PT Inhutani being set-off to receive the dividend amounting to IDR.5,0 billion The sources of revenue of other NTSR among others are from (a) service fee and regulating activities conducted by the respective M/A (Ministries/Agencies) to the public complying with its main duty and functions, (b) Domestic Market Obligation (DMO) of the crude oil and (c) sale of the mining products. In APBN-P 2011, the target of the revenue from other NTSRs is planned to reach IDR.50,3 trillion, namely 11,5 percent higher if compared with the target specified in APBN The increase in other NTSR target comes from the increase in the revenue target of the DMO of the crude oil as resulted from the change of ICP (Indonesia Crude Price) assumption and the strengthening of exchange rate of rupiah currency against US Dollar. Subsequently, the revenue target from PSA (Public Service Agency) in APBN-P 2011 has a slight increase namely from IDR.15,0 trillion only to 15,4 trillion or has an increase of IDR.385,2 billion. This is particularly caused by a consistently increasing number of work units applying the PSA s financial management having reached 114 units and possibly it keeps on increasing in number. Change of Grant Revenue In APBN P 2011, the grant revenue is predicted to reach IDR.4,7 trillion or increases to IDR.922,6 billion (24,7 percent) if it is compared with its target in the APBN One of the allocation policy of the use of these grants is aimed 56 Chapter 1 The National Budget 2011, The Revise National Budget 2011

61 at financing the mitigation and adaptation programs against the impact of weather change. Whereas, another part will be allocated to finance some programs and projects having been mutually agreed between the Government and grant provider (donor) based on the Memorandum of Understanding Change or Revision to the State Expenditure In the framework of securing the implementation of APBN 2011, then the adjustment or adaptation to various APBN targets including the state expenditure becomes an important matter to be conducted. Through this adjustment process, the state expenditure is expected to be more realistic and capable of supporting the achievement of economic development targets in 2011 and in its medium term. In the frame of supporting the activity of the national economic to accelerate and fasten the growth of fair economic and to create and broaden the employment opportunity, to enhance the quality of public service and to alleviate the poverty and to assure the implementation of development priority as specified in the Government Work Plan (RKP) of As the effect of various development and change, the volume of the state budget in the APBN-P 2011 has been provided in amount of IDR.1.320,8 trillion (18,3 percent against PDB). Such amount means an increase of IDR.91,2 trillion or 7,4 percent of the state budget ceiling specified in the APBN 2011 amounting to IDR.1.229,6 trillion. Most of them, approximately 68,8 percent of the total state budget are allocated to the Central Government expenditures while the other 31,2 percent are transferred to regions. Subsequently, this state budget allocation in APBN and APBN-P 2011 can be seen briefly in Table 9. The Indonesian Budget Overview

62 TABLE 9 STATE, 2011 Description Central Government Expenditures (trillion rupiah) APBN APBN-P Total % of PDB Total % of PDB 836,6 11,9 908,2 12,6 Employee Expenditures 180,8 2,6 182,9 2,5 Goods Expenditures 137,8 2,0 142,8 2,0 Capital Expenditures 135,9 1,9 141,0 2,0 Debt Interest Payments 115,2 1,6 106,6 1,5 Subsidies 187,6 2,7 237,2 3,3 Grant Expenditures 0,8 0,0 0,4 0,0 Social Aids 63,2 0,9 81,8 1,1 Other Expenditure 15,3 0,2 15,6 0,2 Transfers to Regions 393,0 5,6 412,5 5,7 Balancing Funds 334,3 4,8 347,5 0,0 Special Autonomy and Adjustment Funds 58,7 0,8 65,0 0,0 TOTAL 1.229,6 17, ,8 18,3 Source: Ministry of Finance Change / Revision to The Central Government Expenditures The change of the Central Government expenditures is a consequence of the development dynamics of various macro-economic indicators, operational needs in organizing the government, and the taking of policies and administrative steps toward the achievement of an optimum allocation of the central government expenditures. In connection with the macro-economic assumption, the change of the expenditure of the central government of 2011 occurs among others due to the change of rupiah currency assumption from IDR.9,250 per USD to IDR Chapter 1 The National Budget 2011, The Revise National Budget 2011

63 per USD and the change of Indonesia Crude Price (ICP) assumption from USD80 per barrel to USD 95 per barrel in average causing the increase in the subsidies especially for energy, both for fuel and electricity. Besides, the change of central government expenditures represents a financial implication of the steps of policy and various programs of new priorities such as (a) change of composition of the debt financing and the existence of the decrease of yield assumption caused by a better and better market condition of the domestic finance. (b) additional expenditure of alutsista (military armament system) (c) housing construction for ex-timor Timur refugees (d) additional budget for the deficiency of Sea Games funds, (e) additional budget for bureaucrat reformation at a number of Ministries/Agencies; (f) additional budget for food price stabilizing program (g). additional budget for pro-people program (cluster 4) and (h) budget for reward and punishment expenses of the Ministries/Agencies. Under various developments as mentioned above, the central government expenditures in APBN-P 2011 has been provided amounting to IDR.908,2 trillion or 12,6 percent of the PDB. It means IDR.71,7 trillion or 8,6 percent higher than the ceiling of central government s budgetary allocation as specified in the APBN 2011 amounting to IDR.836,6 trillion. If it is compared with the realization of Central Government expenditures in 2010 amounting to IDR.697,4 trillion, then the central government s budgetary allocation in the APBN-P 2011 indicates an increase of IDR.210,8 trillion or 30,2 percent The central government s budgetary allocation consists of 50,8 percent or amounting to IDR.461,5 trillion used for the Ministries /Agencies (M/A) expenditures and the other 49,2 percent or IDR.446,7 trillion used for non- M/I expenditures. This amount of expenditures allocated to these Ministries /Agencies means an increase of 31,9 percent or IDR.106,3 trillion from the realization of those allocated in 2010 amounting to IDR.332,9 trillion while the expenditures allocated for non M/A also increases amounting to 28,7 percent The Indonesian Budget Overview

64 or IDR.104,7 trillion of those realized in 2010 amounting to IDR.364,5 trillion. Further, with respect to the change of the Central Government s expenditure according to the economic classification can be described as follows: The budgetary allocation for personnel expenditure in the APBN-P 2011 has been provided amounting to IDR.182,9 trillion, it means an increase of IDR.2,1 trillion or 1,1 percent of the ceiling as specified in the APBN 2011 amounting to IDR.180,8 trillion. This higher allocation for personnel expenditures in the APBN-P 2011 is especially related to the existence of change in the budgetary allocation in the posts of honorarium, vacation, overwork and other expenditures. If It is compared with the realization of personnel expenditure in 2010 reaching IDR.148,1 trillion, then the budgetary allocation for employees/personnel expenditure in the APBN-P 2011 has an increase of IDR.34,8 trillion or 23,5 percent. The budgetary allocation for goods expenditure in the APBN-P 2011 has been provided amounting to IDR.142,8 trillion. It means IDR.5,0 trillion (3,6 percent) higher than its ceiling specified in the APBN 2011 amounting to IDR.137, 8 trillion. This higher allocation for goods expenditures in the APBN-P 2011 is especially related to the existence of additional budget for the reward and punishment to the M/A and additional budget to organize the SEA GAMES. If it is compared with the realization of goods expenditure in 2010 reaching IDR.97.6 trillion, then the budgetary allocation for goods expenditure in the APBN-P 2011 is higher, namely amounting to IDR.45,2 trillion or 46.3 percent. The budgetary allocation for investment expenditure in the APBN-P 2011 is provided in amount of IDR.141,0 trillion, it means IDR.5,1 trillion or 3,8 percent higher than the ceiling of budget allocated for investment expenditure as specified in the APBN 2011 amounting to IDR.135,9 trillion. The higher budgetary allocation for investment expenditure in the APBN-P 2011 is especially related to the additional budget at some state Ministries / Agencies to accommodate 60 Chapter 1 The National Budget 2011, The Revise National Budget 2011

65 various priority programs or activities which must be competed in Such programs among other are (1) additional budget for the purchasing of military armament system (alutsista) at the Ministry of Defense amounting to IDR.2,0 trillion and (ii) transfer of budget from BA BUN (Budgetary Part of the State General Treasury) to marine armament system (alutsista laut) and health facility amounting to IDR.41,5 billion. If it is compared with the investment expenditure realized in 2010 amounting to IDR ,1 billion, then such allocation of investment expenditure in the APBN-P 2011 is higher, IDR.60,7 trillion or 75,6 percent. The payment of debt interest is arranged by taking into consideration the economic condition from the end of 2010 to the beginning of 2011, which is then used as the basis of stipulating the SBN counter-yield assumption to be issued in 2011, the average assumption of three-month SBI and the assumption of rupiah exchange rate against US Dollar. At the time of preparing this APBN 2011, the SBN yield issued in 2011 is assumed as at the average range of 10 percent for long-term SBI and at the average of 6% for short term SBI. Such assumption refers to the movement of yield at and from the end of 2009 to the first-half of 2010 fluctuating at the range of 5 10 percent in October 2009 then slightly increasing to 6-10 percent in December 2009, and increasing once more to 7-10 percent in March For the SBI three-month interest rate and rupiah exchange rate against US Dollar, they shall refer to the assumption specified in the APBN namely 6,5 percent and IDR per USD. Based on such matters, the payable interest of the debt in the APBN 2011 is planned to the amount of IDR.115,2 trillion consisting of the payable domestic interest amounting to IDR.79,4 trillion and payable interest of the foreign loan amounting to IDR.35,8 trillion. Meanwhile, in the APBN-P 2011, the subsidized expenditure has been provided in amount of IDR.237,2 trillion meaning an increase of IDR.49,6 trillion or 26,4 The Indonesian Budget Overview

66 percent if it is compared with its budgetary allocation ceiling specified in the APBN 2011 amounting to IDR.187,6 trillion. The significant increase in this subsidized expenditure compared with its budgetary ceiling specified in the APBN 2011, especially caused by some factors among other are : (1) as an implication of the adjustment to some subsidy parameters with the most recent development, such as the Indonesia crude oil price (ICP), volume of BBM consumption, and rupiah currency (2) anticipation to the fiscal risk for electric power subsidy; (3) to accommodate the less paid subsidy for the fertilizer in 2008 and 2009; and (4) adjustment to the outstanding change and credit ceiling program. If it is compared with the realization of the subsidized expenditure in 2010 amounting to IDR.192,7 trillion, then the subsidized budgetary allocation in APBN-P of 2011 is higher amounting to IDR.44,5 trillion or approximately 23,1 percent. Based on such changes, the allocation of some types of the subsidies are also revised in the APBN-P 2011, namely the subsidies for BBM, electric power, fertilizer, PSO, credit interest program, and tax (DTP).. In the APBN-P 2011, the budgetary allocation for grants is expected to decrease to the amount of IDR.366,4 billion or 47,5 percent of the ceiling budgeted in the APBN 2011 from IDR.771,3 billion to IDR.404,9 billion. The detail of these grant expenditures specified in the APBN-P 2011 are as follows: (1) Mass Rapid Transit (MRT) project amounting to IDR.44,2 billion ; (2) Program of Local Basic Education Capacity (L-BEC) amounting to IDR.109,3 billion; (3) Drinking Water Grant Program amounting to IDR.162,2 billion; (4) Centered Waste Water Program amounting to IDR.16,9 billion (5) Water and sanitation Program- Subprogram D (WASAP-D) amounting to IDR.18,0 billion; and (6) Infrastructure Enhancement Grant (IEG) Sanitation amounting to IDR.54,4 billion. The change in the budgetary allocation for grants in the APBN-P 2011 is primarily caused by the existence of the decreased prediction of the grant expenditure at the 62 Chapter 1 The National Budget 2011, The Revise National Budget 2011

67 MRT program amounting to IDR.547,9 billion. It is related to the construction activity having not yet conducted in 2011, since its tender managed by the Government of the Province of DKI Jakarta is estimated just completed by the end of On the other side, such change is also affected by the increase of budget caused by the launching of activities but not yet conducted in 2010 and the existence of additional grant from Australian Government through AusAid program to undertake the development of drinking water supplying system, waste water processing system and sanitation. The budgetary allocation to social aid expenditure in the APBN-P 2011 is provided in amount of IDR.81,8 trillion. This amount means IDR.18,6 trillion or 29,5 percent higher than its ceiling in the APBN 2011 amounting to IDR.63,2 trillion. The increase in this ceiling of social aid expenditure in the APBN-P 2011 is especially related to the existence of additional budgets among other are used for : (1) PNPM Mandiri program of 2011 amounting to IDR.1,8 trillion and the launching of DIPA PNPM Mandiri of 2010 amounting to IDR.370,8 billion; (2) housing construction for the people of ex Timor Timur refugees amounting to IDR.300,0 billion; (3) reallocation of the other expenditures used for the compensation of the dried up crops (fail to harvest) amounting to IDR.374,7 billion and (4) adjustment to educational fund amounting to IDR ,0 billion. If it is compared with the realization of social aid expenditures in 2010 amounting to IDR.68,6 trillion, then the budgetary allocation to social aid expenditure in APBN-P 2011 amounting to IDR.81,8 trillion has an increase of IDR.13,2 trillion or approximately 19,2 percent. Furthermore, the budgetary allocation to other expenditures in the APBN-P 2011 is provided in amount of IDR.15,6 trillion This amount means an increase of IDR.335,2 billion or 2,2 percent if it is compared with its ceiling specified in the APBN 2011 amounting to IDR.15,3 trillion. The change of the budgetary allocation to other expenditures in the APBN-P 2011 is caused by : (1) budgetary The Indonesian Budget Overview

68 reallocation from other expenditures to some posts of State Ministries / Agencies expenditures; (2) addition to the risk reserved for the change of macro assumption (3) lessening of the reserved risk of the land capping; (4) budgetary allocation for assignment to PT SMI to facilitate the preparation of the KPS Kereta Api Bandara Soekarno Hatta-Manggarai Project and KPS Sistem Penyediaan Air Minum Umbulan Project; and (5) additional budget for the hose and regulator of 3kg gas tube. Change of Transfer to Regions By keep paying attention to various rules and legislation and by stepping on the result of evaluation, during the implementation until 2010, the policy of regional transfer in 2011 has been more intensified to (1) reduce the fiscal gap between the central and local government (vertical fiscal imbalance) and inter-region (horizontal fiscal imbalance); (2) to enhance the quality of public service in the region and to reduce the gap of inter-regional public service ; (3) support fiscal sustainability in the frame of macro-economic policy; (4) increase local capability in exploring the regional economic potency; (5) increase the efficiency in making use of the national resources and (6) enhance synchronization between the national and local; development plans In order to support the policy direction of the Transfers to Regions in the APBN-P 201, the budgetary allocation for Transfers to Regions is provided in amount of IDR.412,5 trillion or 5,7 percent of the PDB. Nominally, this amount means an increase amounting to IDR.19,5 trillion or 5,0 percent of the budget ceiling of the Transfers to Regions in the APBN 2011 amounting to IDR.393,0 trillion. Similarly, if it is compared with its realization in 2010 amounting to IDR.344,7 trillion, the budgetary allocation for Transfer to Regions in the APBN-P 2011 has an increase of IDR.67,8 trillion or 19,7 percent. The said increase in the Transfer to the Region in the APBN-P 2011 if compared with its budget 64 Chapter 1 The National Budget 2011, The Revise National Budget 2011

69 ceiling in the APBN 2011 is, among others, primarily caused by the increases in the allocation of DBH and adjustment funds. The budgetary allocation for Transfer to Regions in the APBN-P 2011 consists of the Balancing Fund amounting to 84,3 percent and Special Autonomy and Adjustment Funds amounting to 15,7 percent. Furthermore, with respect to the change of allocation of the transfer component to regions in 2011 can be described as follows: In the APBN-P 2011, the budgetary allocation to the Balancing Funds is provided in amount of IDR.347,5 trillion or 4,8 percent of the PDB. This amount if compared with the allocation ceiling of the Balancing Fund in the APBN 2011 amounting to IDR.334,3 trillion means an increase amounting to IDR.13,2 trillion or 4,0 percent. Similarly, if it is compared with the realization of the Balancing Fund in 2010 amounting to IDR.316,7 trillion, the estimated realization of this Balancing Funds in the APBN-P 2011 has an increase amounting to IDR.30,8 trillion or 9,7 percent. The prediction of the realization of the Balancing Fund in the APBN-P 2011 consist of DBH, DAU and DAK amounting to 27,8 percent, 64,9 percent and 7.3 percent respectively.. The realization of Special Autonomy Fund in the APBN-P 2011 is predicted to reach IDR.10,4 trillion meaning the same as its ceiling in the APBN of If it is compared with the realization of Special Autonomy Fund in 2010 amounting to IDR.9,1 trillion, then such amount is IDR.1,3 trillion or 14,5 percent higher. The realization of adjustment fund in the APBN-P 2011 is provided in amount of IDR.54,5 trillion or increases to IDR.6,3 trillion of its ceiling in the APBN Change of Budget Financing Based on such condition, the Government has proposed APBN-P 2011 covering the changes in the amount of macro-economic assumption, state revenue and grant revenue, state expenditure and budget financing In the APBN-P The Indonesian Budget Overview

70 2011 such economic growth becomes 6,5 percent, inflation is 5,65 percent, SPN 3-month interest rate become 5,6 percent, the rupiah exchange rate strengthens from IDR per USD to IDR per USD, while the crude oil price becomes USD95,0 per barrel and crude oil lifting becomes 945,0 thousand barrel per day. By the change of this economic macro assumption, and by looking at the development of the revenue realization from taxation and NTSR until the semester I of 2011, and by taking note to the forthcoming tendency, then the state revenue and grant revenue in the APBN-P 2011 has reached IDR.1.169,9 trillion. The said sum means an increase amounting to IDR.65,0 trillion or 5,9 percent if it is compared with the target specified in the APBN Meanwhile, the state budget reaches IDR.1.320,8 trillion meaning an increase of IDR.91,2 trillion or 7,4 percent if it is compared with the budget ceiling specified in the APBN The said changes in the state revenue and grant revenue and state expenditures have finally resulted in the changes to the budget deficit namely from IDR.124,7 trillion (1,8 percent against PDB) to IDR.150,8 trillion (2,1 percent against PDB). The needs of budget financing in the APBN-P 2011 is predicted to reach IDR.150,8 trillion. Such amount means an increase of IDR.26,2 trillion (21,0 percent) if compared to the budget financing specified in the APBN amounting to IDR.124,7 trillion. The said increase in budget financing in the APBN-P 2011 is planned to be financed by the non-debt financing sources namely from SAL amounting to IDR.40,3 trillion. The bigger use of this SAL is caused by the additional SAL used not only to pay off the additional budget deficit but also to finance the additional financing expenditure. Therefore, the composition of budget financing has gone through the changes, if in the APBN 2011 the non-debt financings is in a negative amount of IDR.2,4 trillion or negative 1,9 percent and the debt financing is in amount of IDR.127,0 66 Chapter 1 The National Budget 2011, The Revise National Budget 2011

71 trillion, then in the APBN-P 2011 the non-debt financing is IDR.25,5 trillion or 16,9 percent and the debt financing is in amount of 125,3 trillion or 83,1 percent, The debt financing in the APBN-P 2011 consists of : (1) foreign financing (net) in negative amount of IDR.2,8 trillion (2) State s Commercial Paper (net) amounting to IDR.126,6 trillion and (3) Domestic Loan (net) amounting to IDR.1,5 trillion Subsequently, the non-debt financing from the domestic banks consists of the installment receipt from the repayment of loan continuation amounting to IDR.8,2 trillion,, KUN s bank accounts for the financing of Government s investment credit amounting to IDR. 853,9 billion, the surplus budget balance (SAL) amounting to IDR. 40,3 trillion, forest development account in a negative amount of IDR. 766,8 billion, and reserved account for re-greening (reboisasi) fund amounting to IDR.167,9 billion. Meanwhile, the non-debt financing from non-domestic banking consists of the receipt from privatization amounting to IDR. 425,0 billion, the result of asset management amounting to 965,7 billion, Government s investment fund in a negative amount of IDR. 1,9 trillion, state s equity participation in a negative amount of IDR. 10,5 trillion, revolving funds in a negative amount of IDR. 8,8 trillion, the national education development fund in a negative amount of IDR. 2,6 trillion and securing liability in a negative amount of IDR.904,0 billion. The Indonesian Budget Overview

72 68 Chapter II Implementation Of PBB And MTEF

73 CHAPTER II Implementation Of PBB And MTEF Implementation Of Performance-Based Budgeting (PBB) And Medium-Term Expenditure Framework (MTEF) Escorting The Change Of Budgeting System In Indonesia (PP 90 OF 2010)

74 70 Chapter II Implementation Of PBB And MTEF

75 CHAPTER 2 IMPLEMENTATION OF PBB AND MTEF IMPLEMENTATION OF PBB AND MTEF Indonesia starts the application of budgetary reformation by changing the legal basis used in the budgeting process, namely the Laws No.17 of 2003 on State Finance. Such Laws (UU) mandates the implementation of the three budgetary approaches, namely: Integrated Budgeting, Medium-Term Expenditure Framework (MTEF), and Performance-Based Budgeting (PBB). In practice, the abovementioned approaches focus on the PBB. Both of the other approaches (Integrated Budgeting and MTEF) supports the application of PPB. The integrated budgeting approach is a PBB s application requirement. While the MTEF approach is a guarantee of continuity for providing activity budget due to having been designed for three or five coming years. Information of performance in Indonesian Budgeting System is not only used as information in the report on the implementation of performance but also it is used as the basis of decision for budget allocation in the subsequent year. The information of performance required in the budget allocation shall be set forth in the budgetary document (RKA-K /L). The concrete implementation of PBB (Performance-Based Budgeting) in 2011 was the giving of rewards and sanctions in the forms of adding and deducting the budget ceiling for some Ministries / Agencies (M / A) to boost the performance of M/A. The Indonesian Budget Overview

76 Besides preparing the annual budget by using performance information (PPB), budgeting also calculates the budget implications for all programs and activities that will occur in the next years through the application of the Medium-Term Expenditure Framework (MTEF). MTEF is a comprehensive approach to facilitate calculation of budget implications for few coming years. The calculation of budget implications or forward estimate in the MTEF shall use the parameters that maintain the actuality of budget calculation so that it can be used as the basis for the preparation of the next year s budget. The implementation of MTEF brings a new terminology in the budgeting process, namely Baseline and New Initiative. Baseline is an indication to the forward estimate ceiling of the repetitive activities and / or multi-year activities based on the stipulated policy and becomes as reference to the preparation of the Indicative Ceilings of the planned budgetary fiscal year made when preparing/arranging the budget. While the New Initiative for new policy or the change in the running policy that led to any budgetary consequence, both at the baseline budget and in the future budget. The New Initiative may be in form of addition of program (focus on priority) / new outcome / new activity / new output, addition of target volume, or acceleration in the achievement of targets. Since 2005 until today, the government has gradually made improvements to the Budgetary System in the framework of implementing/applying PBB and MTEF so as to improve the budget allocation quality and financial report quality so that the accountability of state financial management can be well realized. 72 Chapter II Implementation Of PBB And MTEF

77 PERFORMANCE-BASED BUDGETING(PBB) AND ITS APPLICATION CONCEPT OF PERFORMANCE-BASED BUDGETING Performance-Based Budgeting (PPB) is an approach in the budgeting system observing the linkages between the expected performance and financing (budget), and considering the efficiency in the achievement of such performance. What is meant with performance is a working achievement that is the output of an activity or the result of a program with a measurable quantity and quality. Box-1 Conceptual Purpose and Base of PBK In order that the application of PBB can be operated, so PPB shall use the following instruments : 1. Performance indicator is an instrument set and used to measure the achieved performance; 2. Standard cost is a unit of cost defined either in form of the standard cost of input or in form of the standard cost of output as the references to the calculation of budget requirements; The Indonesian Budget Overview

78 3. Performance evaluation is assessments on the efficiency and effectiveness in the achievement of performance targets, the consistency of planning and implementation, as well as the realization of budget absorption. Determination of a performance indicator shall be clear, in line with the achieved organizational objectives, make its costs available, have an adequate argumentation or basis to be determined, its success can be monitored. The budgeting referring to the performance indicator shall be reflected in the measured unit of output. This approach emphasizes that the M/A s programs and activities shall be directed for achieving the outcomes and outputs established in accordance with the Government Work Plan (GWP). Budgeting is also based on the price per unit of output or activity in order to achieve efficiency. In the application of budgeting, the method of cost calculation for each unit of output should be determined and you shall calcúlate the common cost, namely a cost resulting from the use of facility collectively so as to produce some outputs. Evaluation on performance as a tool shall function to compare the realization of the achieved performance with the specified perfomance target. By evaluating such performances, it can be concluded that a program/activity is successful or less achieved. Based on a conceptual basis, the purpose of applying PBB (Performance-Based Budgeting), and the instruments used, it can be concluded that operationally the prime principle of applying the PBB is the existence of a distinct linkage between the policies contained in the national planning document and the budgetary allocation administered by the Ministries/Agencies (M/A) according to its rolesfunctions (as reflected in the Ministries/Agencies organizational structure. Such 74 Chapter II Implementation Of PBB And MTEF

79 planning documents include the Government Work Plan (GWP) and the M/A s Work Plan. While the budget allocation administered by the M/A is reflected in the documents of RKA-M/A and BIAL (Budgetary Implementation Activity List), which are also the annual budgeting and planning documents as well as having a close connection. The connection between such documents shall be described below. Diagram 1 Connection p between Planning and Budgeting Documents The government shall determine the priority of its developmental activities to be carried out in the GWP documents. The expected outcome is the nationally earned outcome (national outcomes) as mandated by the Constitutions. Furthermore, based on the functions carried on/by and referring to the aforesaid GWP, then referring, the M/A shall prepare: 1. Program, Key Performance Indicator (KPI) of the Program, and the results of the Unit of Echelon I 2. Activity, Activity Performance Indicator (API), and output at the expenditure unit (spending units) at the level of Work Unit or Echelon II within the area of Echelon Unit I as the program for whom are responsible. Formulation of outcomes in the program and outputs at activities in the application of PPB (Performance-Based Budgeting) is an important thing besides the formulation of performance indicator for program / activities. The formulation of this performance indicator describes the signs of the successful programs / activities that have been implemented together with the expected output / outcome. This performance indicator will be just used as a measuring tool after The Indonesian Budget Overview

80 the end of the program / activity, whether successful or not. Based on some of the things mentioned above, a fundamental understanding shall be required in the preparation of budget on the lines of thought: 1. The linkage between the activity and the protecting program. 2. The activity produces a performance, namely output in form of goods or services. 3. Performance indicator is a measuring tool for assessment of activity performance. 4. The activity is supported by the input component in its achievement. 5. The linkage of activity output with the way to achieve through the interconnected Component among the components as a stage in the framework of achieving Output, so any irrelevant stage of activity (component) is not found. IMPLEMENTATION OF PBB (PERFORMANCE - BASED BUDGETING) IN 2005 up to 2011 The limited availability of budgetary sources to fund the Governmental implementations and services to the public shall require efforts to increase the efficient use of budgetary sources. Having the experiences in applying the regular and developmental budgets, originally expected to render some developmental outcomes and services to the public, maximally apparently has resulted in inefficiency. The dichotomy in activities and projects causes duplication in funding. Likewise the budgeting system less emphasizing on the achieved outputs causes its performance difficult to be measured and unaccountable. 76 Chapter II Implementation Of PBB And MTEF

81 The performance-based budgeting requires the budget to be prepared based on the work performance to be achieved in a planned year applied to replace the line item budgeting. The Performance-Based Budgeting approach in line with the Integrated Budget, and the MTEF, three of them, seek to further improve the efficient use of budgets in order to enhance qualities of public services. By applying the three approaches, the M/A has discretion to describe the Government programs into the activities in accordance with the main duties and functions. Through this system the success of a M/A in carrying out its programs and activities is not measured by the amount of budget that has been absorbed, but rather the ability to achieve its measurable outputs efficiently, economically, effectively and accountably. In particular the development of application to the performance-based budgeting of the budgetary fiscal year of 2005 (the year when the reformatted budgeting system was firstly applied) until the budgetary fiscal year of 2010 can be described as follows: In 2005, the forms of RKA-M/A accommodating the inclusion of outputs began to be introduced. These forms of outputs were very strategic to be filled by the M/A and indicated any fundamental change in the budgeting process, namely that the budgeting was not only based on the description on the use of funds spelled out according to the input of activity / sub-activity, but it should be further based on the description on the use of funds spelled out according to the quantitative and measurable output of activity / sub-activity. In 2006, the concept of application to PBB (Performance-Based Budgeting was under development. Some improvements in 2006 in the framework of PBB, among others, started to be introduced of standard cost as a tool to enhance the efficiency of budget allocation as a part of the application to the Performance-Based Budgeting. The Indonesian Budget Overview

82 In 2007, the activities of M/A were synchronized with the programs contained in the Government Work Plan (GWP). Furthermore, the party of M/A was also asked to identify the outputs of activities and as well to fill / complete the columns associated with the outputs of activities. In 2008, some improvements in the implementation of the Performance-Based Budgeting approach in the budgetary fiscal year of 2008 were to improve the substance of RKA-M/A which focused on the linkages between GWP and the M/A s Work Plan by translating into a budget document (RKA-M/A). Such improvements were aimed at making the concept of relationship between the M/A s Work Plan and RKA-M/A operationally possible. In 2009, the application to the budgeting system focused more on the Performance-Based Budgeting approach through the consolidation of RKA PBK-M/A substance emphasizing on the formulation of outputs of activities and the indicators thereof associated with the roles and functions of each work unit. In 2009 the stabilization of Performance-Based Budgeting was made as a tool to enhance the relevance of budget allocations to the output, as well as to enhance the efficiency of budget in achieving the stipulated performance targets. In the budgetary fiscal year of 2010 some repairs and improvements were made by restructuring programs and activities at all the M/A, which was a prerequisite for the application to PBB and then the concepts of baseline and new initiative as the parts of the application to MTEF which was a continuation of PBB. To keep the applications to PBB and MTEF, monitoring to and evaluation on budgeting for which outcomes will be utilized as a consideration of the budget allocation should be conducted. The year of 2011 is the first year of which concepts of PBB (Performance-Based Budgeting) and the MTEF are applied as a whole to the Program structure and new 78 Chapter II Implementation Of PBB And MTEF

83 activities. However, in order to develop and establish a comprehensive budgeting system, improvements through the following steps shall be taken: a. Realignment of program structure and activities. This step shall be jointly carried out by and between the Ministry of Finance and Bappenas. The structuring of M/A programs and activities shall be with reference to the roles and functions of M/A and in accordance with the essence of public service. The programs and activities shall be prepared to reflect day to day operations through the existing organizational structure. Such principle is intended to prevent any overlapping of an activity and facilitate the performance measurement of each organizational unit and have no longer program that solely accommodates routine expenditure on the one hand and on the other hand accommodating a developmental expenditure only. b. Conducting performance measurement The performance measures used in the new budgeting system shall be focused on the outcomes (outcomes-focused budgeting). The performance measurement is not only in terms of effectiveness and efficiency, but the term of quality shall be also noted. The measurement of effectiveness and efficiency shall emphasize that an output produced shall function on improving people s lives at a reasonable price. Both ways of measurement are accompanied by the measurement of quality that emphasizes on how well the goods are produced or services are rendered. The steps taken to realize such matters to be done through: 1) Formulation of goals / outcomes and objectives (objective) of each program in accordance with the policy specified by the leader of M/A (policy-oriented budget). 2) Formulation of key performance indicator of the program and activities. c. Application of Budget in a medium-term perspective which is better known as The Indonesian Budget Overview

84 the Medium Term Expenditure Framework (MTEF) d. Completing the forms of RKA-KL and the ways to fill (how to fill). The changes mentioned above shall be accommodated in the forms of RKA- KL. The currently existing forms of RKA-KL will be refined/perfected in order to reflect the application of budget using the integrated budget approach, the budget in the medium-term framework, and the performance-based budget more comprehensively. APPLICATION POLICY OF PERFORMANCE-BASED BUDGETING IN 2012 Application Level of PBB (Performance-Based Budgeting) The application of PBB refers to the organizational structure of M/A. The connection between organizational structure and performance to be achieved is the framework of PBB as shown in Diagram 2. Diagram 2, Framework of PBB (Performance-Based Budgeting) Based on Diagram 2.1, the application of PBB can be seen in 2 (two) levels, namely the application of PBB at National Level and Application of PBB at the Ministry/ Agency Level. The application of PBB at the National Level shall be implemented 80 Chapter II Implementation Of PBB And MTEF

85 through the following steps: 1. The government shall define an objective (in the form of priority and focus on national development priorities and its performance target) for a period of 1 (one) coming year in the GWP document. The outcome to be expected shall be in the form of national outcome that leads to the illustration as mandated by the Constitutions; 2. Based on such objective, the Government shall formulate Priority Activities and / or Activities in the framework of the functions carried by a Ministry / Agency (M/A), API, and outputs (type, volume, and unit of measurement). Furthermore, the Government will calculate the estimation on its budgetary needs adjusted to the State financial capacity; 3. Such Government objectives will be implemented by each of the M/A (along with the organizational apparatus under its coordination) in the form of programs and activities under its functions. While the application of PBB at the Ministry/Agency (M/A) Level shall be performed through the following steps: 1. Under the M/A s Strategic Plan, Unit of Echelon IA shall formulate Program, KPI (Key Performance Indicator) of Program and outcomes; 2. Hereinafter the Program is spelled out in the Activities, API (Activity Performance Indicator), and output at the spending unit in the levels of Work Unit or Echelon II in the area of Echelon IA Unit in accordance with its roles and functions; 3. The aforesaid activities, adjusted to the supported category of Functions / Sub- Functions, National/Sector Priority / Non Priority ; 4. The results of program formulation, KPI of Program, outcomes, activities, API, and outputs are set forth in the documents of Work Plans - M/A, RKA-M/A and BIAL (Budgetary Implementation Activity List). The Indonesian Budget Overview

86 Budgetary Structure in PBB Diagram 3, Budgetary Structure in the Application of PBB BUDGETARY STRUCTURE IN THE APPLICATION OFPBB PROGRAM OUTCOME KEY PERFORMANCE INDICATOR ACTIVITIES OUTPUT ACTIVITY PERFORMANCE INDICATOR SUB OUTPUT COMPONENT SUB COMPONENT DETAILED BUDGET DETAIL OF ALLOCATED ACTIVITY IMPLEMENTATION The Budgetary Structure in the application of PBB gives more attention to the linkages clearly between planning and budgeting that reflect the harmony between policies (top down) and implementation of policy (bottom up). Image of Budgetary Structure in the framework of applying the Performance-Based Budgeting (PBB) can be described in Diagram 3. The Budgetary Structure is a description on the integrated planning and budgeting in the M/A s organizational units. The aforesaid integration is an unity in the resource need required by the Work Unit in the implementation of activities which is the responsibility as the roles of functions carried by the Work Unit (bottom up). This case should be in line with the draft of policy decided at the level of Government Organization that have been coordinated by its Organizational Units (top down) which are responsible for the Program. 82 Chapter II Implementation Of PBB And MTEF

87 resulted in changes in the Budgetary Structure. In 2011 restructuring programs and activities shall be performed in order to prevent any overlapping of programs and activities so that the responsible unit for each activity becomes clear (Box-1). Box-2 Comparison of Budgetary Structure before Restructuring after Restructuring Program Activity IKU Program Program Activity Performance Indicator (CCI) Activity Sub-Activity Group Account Sub-Output (Option) Component Sub-Component (Option) The application of PBB that is mandated by the budgeting reformation process 1. Program : resulted in changes in the Budgetary Structure. In 2011 restructuring programs a. The parts and functions of the budgetary structure are as follows: Program is what the policy spells out in accordance with the M/A s vision and and activities shall be performed in order to prevent any overlapping of programs mission whose formulation reflects the roles and functions of Echelon-1 unit or and M/A activities unit containing so that the activities responsible to achieve unit outcomes for each with activity the measu becomes urable clear performance (Box-1). The indicator. parts and functions of the budgetary structure are as follows: 1. Program : 14 a. Program is what the policy spells out in accordance with the M/A s vision and mission whose formulation reflects the roles and functions of Echelon-1 unit or M/A unit containing activities to achieve outcomes with the measurable performance indicator. b. Program formulation is the result of what is restructured in 2011 and the adjustments thereof. c. Program formulation in the document of RKA-M/A should be in accordance with the existing program formulation in the document of Work Plan-M/A. 2. Key Performance Indicator (KPI) of Program: a. KPI of Program is an instrument used to measure outcomes at the level of program. The Indonesian Budget Overview

88 b. The approach used in preparing the KPI of program is oriented to the quantity, quality, and / or price. c. In determining the KPI of Program, the M/A shall coordinate with the Ministry of Finance and Ministry of National Developmenet Planning/ National Development Planning Agency. d. The formulation for KPI of Program in the document of RKA-M/A shall be in accordance with the formulation for KPI of Program avalaible in the document of Work Plan-M/A. 3. Outcome: a. Outcome is a work performance which is everything reflecting the functioning of output of the activities in a Program. b. In general, the criteria of the outcome of a program are : 1) To reflect the Performance Target of Echelon-1 unit in accordance with its vision, mission, functions and roles; 2) To support the M/A s Strategic Objective; 3) Able to be evaluated. c. Outcome Formulation in the document of RKA-M/A should be in accordance with the outcome formulation contained in the document of Work Plan - M/A. 4. Activity : a. Activity is what the Program spells out, whose formulation reflects the roles and functions of a particular Work Unit or assignment of M/A containing the component of activities to achieve outputs in a measurable performance indicator. b. The Activity Formulation of the restructuring outcome in 2011 and the adjustments thereof. c. The Activities formulation in the document of RKA-M/A should be in 84 Chapter II Implementation Of PBB And MTEF

89 accordance with the existing activity formulation in the document of Work Plan - M/A. d. Budgetary Allocation for activities shall be further detailed in several following structures: 1) Component : a) Component is the stage of output achieving process, in the form of work packages. b) Component can directly support to output or Sub-output. c) Component is prepared based on its relevance to the achievement of outputs, both the volume and quality. d) Among the components there is a mutually supporting connection in the achievement of outputs, so the non-implementation / delay of one component may cause any non-execution / delay of the other components and can also impact on reduction of quality and quantity or failure in achieving the output. 2) Sub-Component : a) The subcomponent is the detailed budget groups, which are arranged in framework of facilitating the implementation of Component b) subcomponent is optional (may be used, should not). 3) Detailed Budget Detailed budget is the details of budget needs in each type of budget containing the expenditure items. 5. Activity Performance Indicator (API) : a. API is an instrument used to measure outputs at the level of activity. b. The approach used in preparing the API shall be oriented to quantity, quality, and / or prices. The Indonesian Budget Overview

90 c. In determining the API, the M/A shall coordinate with the Ministry of Finance and Ministry of National Developmenet Planning/National Development Planning Agency. d. The API formulation in the document of RKA-M/A shall be in accordance with the IKK formulation contained in the document of Work Plan-M/A. 6. Output a. The output is the work performance in form of goods or services produced by an activity undertaken to support the achievement of program goals and objectives and policies. b. The output formulation in the document of RKA-M/A shall be in the form of goods or services, while the output formulation in the document of Work Plan-M/A shall be in the form of output statements. c. The output formulation in the form of goods or services shall consist of: 1) Type of output, it is a description on the identity of each output reflecting the roles and functions of Work Unit specially. 2) Volume of output, it is data on the amount / quantity of output produced. 3) Unit of output, it is a description on the unit of measurement used in measuring the quantity (volume) of output in accordance with the appropriate characteristics. d. In general, the criteria of output are as follows: 1) Reflecting the Work Unit s performance goals according to the rolesfunction or assignment of national development priority; 2) Constituting the main/final product produced by the Work Unit in charge of activities; 3) Having specific and measurable characteristics ; 4) For Functional Activities, most of outputs produced are in the form of 86 Chapter II Implementation Of PBB And MTEF

91 regulations according to the roles-function of the Work Unit; 5) For assignment activities (National Development Priorities), it shall produce the output of national development priorities that have a national impact; 6) Each activity may produce output more than one type; 7) Each output shall be supported by the component of inputs in the implementation; 8) Any revised output formulation is possible in the preparation of RKA- M/A with reference to the M/A s Budget Ceiling or the M/A s Budget Allocation. e. In order to achieve outputs, it is possible to have a sub-output in the following criteria: 1) Sub-output in fact is output. 2) The outputs declared as sub-outputs are the outputs having the similarities in their types and units 3) Sub-output shall be used as the spelling-out of each goods or service in the group of goods and services having the same types, summarized in one output. 4) The amount of sub-outputs or the accumulated volume of suboutputs reflects the amount of output volume 5) The characteristic of sub-output is optional (may be used or may not be used) 6) Sub-output shall be only used at the outpour constituting the summary of goods or services having the same types. 7) Specific and independent outputs (not summary of goods or services having the same types) shall not require any sub-output. The Indonesian Budget Overview

92 MEDIUM-TERM FRAMEWORK (MTEF) AND ITS IMPLEMENTATION CONCEPT OF MTEF An approach with a medium-term perspective shall provide a framework of comprehensive budgeting plan, in optimally expected benefits as follows : Better transparency of budget resource allocation (allocative efficiency); Improving the quality of budgeting planning (to Improve quality of planning); Better focus on priority policy (best policy option); Improving fiscal discipline (fiscal dicipline) and Ensuring fiscal sustainability (fiscal sustainability). In the medium-term budgetary project, the uncertainty rate of the available budgetary allocation in the future can be reduced, both in the provision of fund needs to finance the implementation of various new priority policy initiatives and for ensuring the sustainability of ongoing policies, so that the policy maker can present the budgetary planning oriented to the achievement of targets 88 Chapter II Implementation Of PBB And MTEF

93 completelyl, comprehensively and in the right context, in accordance with the framework of policy planning already established. By focusing on the fundable priority policies, the achievement of fiscal discipline, which is the key for the effective use of public resources, hopefully the Government accountability in the implementation of fiscal policy at the macro level can be achieved. MTEF is a policy-based budgeting approach, by making decision resulting in implications of budget within a period of more than 1 (one) budgetary fiscal year. To implement the MTEF well, it is necessary to understand the conceptual framework of MTEF consisting of : 1. Application to the rolling budget system; 2. Existence of Baseline; 3. Determination of Parameters; 4. Mechanisms of adjustment and improvement of baseline, and 5. Existence of mechanisms for submission in framework of additional budget for new initiatives). Paradigm of a rolling budget system is a new paradigm of budget for improving the zero-based budgeting system that ignores the previous year s budgetary allocations (historical budgetary allocations) re-identifying the necessary costs for the implementation of programs and activities that have been approved. Applying the paradigm of rolling budget well shall require the policy as the main base (policy driven) in the budget process (budget alignment). The drawn-up policy design shall be able to furnish explicit information, especially regarding explicit policy accomplishment plan target (policy accomplishment indicators) so The Indonesian Budget Overview

94 that the impact on the budget required more than one budgetary fiscal year can be well projected. Baseline is a ceiling indication for a forward estimate from repetitive activities and / or multi-year activities based on the policy that has been established and become a reference to the preparation of Indicative Ceiling of the planned budgetary fiscal year made when the budget was made. Parameters are the values used as reference. Those values can be either statement or information that can explain the certain limits or parts of a system. In order to implement the MTEF effectively, then it is necessary to identify the parameters that affect any funding calculation project in the future, either in the form of economic parameters or non-economic parameters. Adjustment to the baseline is indispensable for the sustainable implementation of policy stipulated to be continued in the subsequent budgetary fiscal year. The mechanism of this adjustment shall be performed by using the specified parameters, either economic parameters or non-economic parameters. Any submission of the proposed budget for a new policy shall be set so as to provide procedural and mechanism certainties for the parties concerned. The proposed budget for a new policy shall be submitted after it is known that there is a residual fiscal space based on the calculation of the projected budgetary resources availability reduced by the need of baseline. In general, the preparation of a comprehensive MTEF shall require a stage of medium-term planning preparation process including: a. Project preparation / framework plan (assumptions) for medium-term macroeconomic; 90 Chapter II Implementation Of PBB And MTEF

95 b. Medium-term project preparation / plan / fiscal targets (such as tax ratio, deficit, and government debt ratio); c. Medium-term budget framework (revenue, expenditure, and financing) producing a ceiling of total government budget (resources envelope); d. distribution of total medium-term budget ceilings to each M/A (line ministries ceilings). Indication of M/A ceiling in the medium-term is an estimation on the highest limit of budget in the medium term; e. Distribution of medium-term budget (line ministries ceilings) of each M/A to the respective programs and activities based on the specified medium-term ceiling indication. Stages of project preparations / plans (a) up to (d) are top-down process while the stage (e) is a bottom-up process. Bottom-up estimation process is often split up over the projection on the cost of ongoing policy implementation and the adjustments in connection with the efforts of rationalizing programs / activities through the process of evaluating programs / activities, as well as estimates for the cost of a new policy. In the framework of preparing RKA-KL with the MTEF approach, the M/A (Ministry/Agency) needs to align the activities / programs with the National Medium Term Development Plan (National MTDP) and the M/A s Strategic Plan, which in the previous stage is also a reference in preparing the GWP and Work Plan of Ministries / Agencies (M/A). The Indonesian Budget Overview

96 IMPLEMENTATION/APPLICATION OF MTEF (MEDIUM- TERM FRAMEWORK) IN In particular the development of application to MTEF from the budgetary fiscal year of 2005 (the first year of which the reformed budgeting system was applied) to the budgetary fiscal year of 2011 can be described as follows: In 2005 MTEF concept as a whole had not been yet introduced to the M/A, but the form of RKA-KL had accommodated the information of MTEF. The application of MTEF was reflected in the forward estimate columns in : a. Forms 1.2 and 1.5 for the work unit level; b. Form 2.2 for the Echelon-I level; and c. Form 3.2 for the ministrial / institutional level. In 2006 the concept of MTEF began to be introduced in the preparation of RKA- KL for the budgetary fiscal year of The concept of MTEF which includes definitions and methods of preparation was contained in the guideline book for preparation of RKA-KL 2006 (Regulation of Minister of Finance No. 54/2005) and a more detailed form was provided so as to accommodate the MTEF. However considering that the budgetary fiscal year of 2006 was the first year of which MTEF concept was introduced and there were time constraints in preparing the RKA-M/A, it was understandable if generally the M/A had not been yet able to prepare any forward estimate. The application of MTEF started to be attempted to all M/A in 2007 and the forward estimate rates were specified in Appendix V of the Presidential Regulation on Breakdown of APBN Based on the evaluation, not all the M/A could fill the columns correctly. The application of MTEF for the budgetary fiscal year of 2008 was still focused on the appeal to the M/A to fill the forward estimate rates. The argumentation was that MTEF would describe the consequence of the amount of budget 92 Chapter II Implementation Of PBB And MTEF

97 financing required to achieve any policy target for the coming years. Therefore, the most crucial thing in the application of MTEF in budgetary planning was a clear definition about the main roles and organizational functions and national priority programs listed in the National Medium-Term Development Plan (NMTDP) and GWP, where the expected outcomes of these priority programs were the responsibility of the organization to achieve them. The application of MTEF in Indonesia till the budgetary fiscal year of 2009 was still limited to the appeal that the M/A would fill in the columns in the budgetary document (RKA-KL). If the columns associated with the MTEF had been filled, it should be still further examined whether the filling of MTEF column could be used as a reference in the preparation of the budgetary allocation in the year after the planned budgetary fiscal year. This might be understood because the Ministry of Finance had not been able to submit the Medium Term Budget Framework to the M/A as the budget constraint on each of these programs / activities to be implemented by the M/A in the coming years through forward estimate, both in terms of performance achievement and budget. In 2010, considering that the concept of MTEF in the several previous years could not be applied at a maximum because of having no Medium-Term Fiscal Framework (MTFF) and no Medium-Term Budget Framework (MTEF), then the preparations conducted in the framework of implementation were to map the activities to be carried out and to select activities. It was meant that the types of activities could be grouped based on the medium-term budget framework, such as: basic activities; activity which is a baseline, and activity that can be categorized as a new initiative activity. The budgetary fiscal year of 2011 is the momentum to apply the MTEF (Medium- Term Budget Framework) fully. The Regulation of Minister of Finance No.104/ The Indonesian Budget Overview

98 PMK.02/2010 on Guidelines to Prepare and Review RKA-M/A for the Budgetary fiscal year of 2011 explains the mechanism of preparing budget in the framework of applying MTEF. Information on forward estimate rates shall be made available on the Form 3 RKA-M/A in the scope of Echelon-1 Unit or the responsible person/ division for the program. All M/A (Ministries/Agencies) applied the MTEF approach in 2011 by filling in the forward estimate rates for 2 years after the budgetary allocation of 2011 (2012 and 2013). The filling-in of forward estimate rates was facilitated by the application program of RKA-M/A, so it made M/A easier to implement it. In the process of preparing MTEF, it had also been reminded that the forward estimate rates to be then set out were the binding budgetary rates/allocations to be determined as the baseline allocation in the planed year (2012). APPLICATION OF MTEF IN 2012 In MTEF as a budgeting approach based on the policy of which decision making is done in the perspective of more than one budgetary fiscal years has cost implications in the coming year (contained in the forward estimate). The forward estimate rates as the implementation of MTEF prepared by a State Ministry / Institution shall consider the planning documents, such as the Government Work Plan (GWP) and the National Medium Term Development Plan (NMTDP). (must be repaired so that it shoes correct numbers) Correcting Baseline For RKA-M/A in the budgetary fiscal year of 2011, the forward estimate rates have been determined for the year of The budgetary preparation in the document of RKA-M/A 2012 starts by correcting the forward estimate rate into 94 Chapter II Implementation Of PBB And MTEF

99 Baseline. The mistakes that may occur when setting the forward estimate rates / baselines shall be corrected so that they show the correct numbers. The main reasons for correcting the baseline, among others, are: 1. The M/A (Ministry/Agency) has made a mistake when it attached the volume of output in the Forward Estimate; 2. The M/A was wrong in classifying the stop or continue for output or component; 3. The M/A was wrong in classifying the primary or supporting components ; 4. The M/A was too detailed in classifying output, so that the total output of a M/A is too much; 5. The M/A has defined the output too wide, then divided into several suboutputs that should be a separate output; 6. Nomenclature output of M/A does not reflect any goods or service; 7. At the component level, M/A should bring up new components or remove the unneeded components, and / or 8. The M/A needs to sharpen the formulation components. The steps taken by the M/A (Ministry/Agency) to investigate the erroneous Baseline are: 1. Checking the programs / activities of which forward estimates in the planed year are much larger or smaller than the ceiling of the previous year (for example, in a deviation limit of 10% ). a. If the value is much larger, it may be due to an error in entering the Volume of Output; b. If the value is much lower, it may be due to the volume of output has not been yet entered into the forward estimate or the output was incorrectly The Indonesian Budget Overview

100 classified as a stop. 2. The planners review the outputs and components to check whether the nomenclature of output and components are already correct. 3. The planners check the outputs and components if they need to sharpen the nomenclature of outputs / components, or change the classification of output / component. 4. Checking which work unit causes the error. After checking and investigation so that the errors that occur in Baselines can be identified, correction of baselines can be grouped into correction at the output level and correction at the component level. Adjustment to Baselines Adjustment to baselines is the process of making the Baselines compiled in the year prior to the planed year (eg in 2011) in accordance with the assumptions or parameters that will occur in the planned year (eg 2012). The parameters that need to be adjusted are the economic parameters automatically carried out by the application system of RKA-KL dan the non-economic parameters manually adjusted by the planners. In addition to the adjustment of parameters, the adjustment of Baselines also includes the preparation of new Forward Estimate Rates (3 years from the planned year). There are three things that cause adjustment to the baselines, namely Adjustment of economic parameters, adjustment of non-economic parameters, preparation of new forward estimate. and 1. Adjustment to economic parameters The economic parameters used in the MTEF approach in preparing the budget 96 Chapter II Implementation Of PBB And MTEF

101 are the economic assumptions existing in the APBN (National Budget), but in the application of the current MTEF, the assumptions used is inflation. Every year inflation estimate differs from the previous year, therefore it is necessary to update the inflation assumption which will be used in the planned year. The inflation assumptions shall be used as an adjustment parameter in order that the planned budget in the planed year is appropriate. When adjustments are made with the (new) inflation parameter assumption, in preparing the budget in the planned year, the budget estimates can be increased or decreased according to the increase or decrease in the inflation assumption. 2. Adjustment to non-economic parameters. Economic parameters are parameters related to the government or M/A policy. The scope of economic parameters to be adjusted are as follows: a. Adjustment to the personnel s budgetary calculation shall be made by changes in personnel s databases. b. Addition or reduction of Output Volume The M/A may increase the output volume for each activity, but without adding the budget, while for reduction of the output volume targets should be only for output which is the M/A s priority. 1) Addition of Volume Output can be done by the M/A with a source of funding from the optimization outcome of the relevant M/A. 2) Reduction of Volume Output can be done if in the evaluation of the previous year, the Output Volume which becomes a target can not be achieved by the M/A. The reduction of Output Volume can only be done on the M/A priority activities. c. Reduction of Budget. Pursuant to the Regulation of Minister of Finance concerning the The Indonesian Budget Overview

102 implementation Rewards and Sanctions in 2011, it will directly affect Baselines that have been compiled based on Forward Estimate. Giving sanctions to the M/A that did not fully implement the budget in 2010 (previous budgetary fiscal year) would result in reductions of budget in 2011 (in the current year) and would give effect to the reduction in forward estimate in the planned (Baseline). Any reduction of budget due to sanctions should not reduce the planned volume output target. d. Reductions of output volume target and budget. Reduction of output volume and budget may be made if in the evaluation of the previous year, the output volume that become a target could not be achieved by the M/A. Any reduction of Output Volume and budget shall be only for the M/A s priority activities. e. Reallocation of budget and output targets as well as ceiling of the Ministries / Agencies (M/A). In implementing the MTEF, the M/A shall have flexibility to reallocate Output target in making adjustments to the extent of the fixed budget ceiling, either the budget ceiling in the framework of national/field priorities or the M/A s priority budget ceiling. Reallocation can be made by inter-programs, inter-activities, inter-outputs and inter-work units, including inter-locations. Restrictions provided is that reallocation can not be made of national priority or field priority to the M/A s priority. f. Moving the Output Volume target to the future. In making adjustment to Baseline, M/A shall have flexibility to move the Output Volume to the subsequent budgetary fiscal in accordance with the considerations of achieving those outputs. To move a output volume target to the future is not followed by its carried-over budget. 3. Creating new forward estimate. 98 Chapter II Implementation Of PBB And MTEF

103 The main basis of the implementation of MTEF is the rolling budget. As the part of preparing the annual budget, then the new forward estimate shall be added in the baseline. The Forward Estimates for the activities and programs are the accumulation of the continuous components, either main components or supporting components. New Initiatives New initiatives and Baseline is the most important part of the implementation of MTEF. The Baselines in the MTEF shall accommodate all repeated policies from year to year, while the New Initiative shall accommodate changes in policy or the emergence of new policy within a certain period of year. In the MTEF, New Initiative is defined as a new policy or policy changes that lead to any consequence of budget, both at the baseline budget and future budgets. Conceptual Foundations serving as a basis for applying New Initiative are : 1. Flexibility in planning by keeping on maintaining accountability. 2. Planning oriented to the policy directions. 3. Application of principles of good governance (transparency and accountability); and 4. Oriented to performance achievement. The Objectives of which new initiative is applied are: 1. To provides flexibility in planning and budgeting systems. The mechanism of new initiative enables the government to add or change national policy in response to the situation development by staying in the corridor of the Medium Term Fiscal Framework. At the M/A level, the mechanism of New Initiatives shall provide flexibility to manage the budget in The Indonesian Budget Overview

104 order to achieve maximum results by keeping on maintaining the principle of accountability. 2. To maintain consistency of national development goals. New initiative enables the government to make adjustments to the plan in response to changing conditions. The proposed new initiatives shall keep consistency of achievement of national development objectives in accordance with the National Medium-Term Development Plan (NMTDP). 3. To enhance transparency and accountability. New initiatives shall enhance transparency in the planning system because the process is open, from the proposal process to the determination of final result of the proposal. On the other hand, the New Initiative shall improve accountability because of the clarity of responsibility for the involved institutions. 4. To make efficiency. The mechanism of New Initiatives shall encourage budget efficiency, because in this mechanism it is possible that a budget reallocation to the M/A can occur, that can be used to fund new initiatives. The new initiatives proposed by the Ministry / Agency (M/A) can be grouped into 3 (three) following categories: 1. Program (Focus on Priority), Outcome, Activities, and New output. This new initiative is due to any new policy direction, or any change in the running policy, which bring a consequence in the form of additional budget beyond the baseline. This new initiative can form a new Program, New Outcome, New Activity and / or New Output. 2. Addition of Target Volume. 100 Chapter II Implementation Of PBB And MTEF

105 The new initiative in the form of an added output volume which causes the increase in budget in the planned budget. 3. Acceleration in Achievement of Target. This new initiative in the form of an added target volume in order to perform the acceleration that causes any additional budget but still in the budget ceiling of the initial medium-term baseline. The process of New Initiative proposal can be done by the Ministry / Agency ( M/A) at 3 (three) following occasions : 1. Before the indicative ceiling (Proposal I) 2. Before the budget ceiling (Proposal II) 3. Before the Budget Allocations (Proposal III) Each Ministry / Agency (M/A) may propose new initiatives related to Policy Direction and National Development Priority. Specification of a proposal to be approved as a New Initiative shall be conducted through a system competition by considering the available budget and shall be specified through a competition system on the feasibility of proposal. The processes of New Initiative proposal and specification shall involve multiple institutions, starting from Cabinet, M/A, the Ministry of National Developmenet Planning/National Development Planning Agency and Ministry of Finance. The roles of each institution are as follows: 1. Cabinet Cabinet acts as a determinant for a New Initiative proposal properly funded viable. The new initiative approved by the cabinet shall be initiated from the policy direction and national development priority (at the beginning of the year) determined by the president. The Indonesian Budget Overview

106 2. Ministry / Agency M / A (Ministry / Agency) has a role as a proposer for New Initiatives. The New initiatives proposed by the M/A shall be in accordance with the stipulated terms and conditions. 3. Ministry of National Developmenet Planning/National Development Planning Agency The Ministry of National Developmenet Planning/Natioanal Development Planning Agency and Ministry of Finance have a role as a Central Institution (central agency) who become appraisers to the feasibility of New Initiatives. The Ministry of National Developmenet Planning/National Development Planning Agency in the assessment process shall focus on the policy side and maintain consistency in the achievement of national Development targets. 4. Ministry of Finance The Ministry of Finance as Central Agency has a role as a new initiative appraiser who focuses its appraisal on the feasibility of budget or appropriateness of funding under the budgetary policy. 102 Chapter II Implementation Of PBB And MTEF

107 CHAPTER 2 ESCORTING THE CHANGE OF BUDGETING SYSTEM IN INDONESIA ESCORTING THE CHANGE OF BUDGETING SYSTEM IN INDONESIA (PP 90 OF 2010) As the pillar to the regulation that governs the State Finance management, the Law 17 of 2003 on the State Finance, the Government has been mandated to compile a Government Regulation that govern the Ministries/Agencies Budget Work Plan (RKA KL), on the basis of performance, integrated budgeting and in middle term perspective. A year later, the Government established an umbrella of PP (Government Regulation) No. 21 of 2004 that becomes the foundation for Ministries/Agencies to compile RKA KL. From the side of new budgeting system application, The Government Regulation No. 21 of 2004 gives more introductory aspect to Ministries/Agencies regarding principles in preparing budget with threepillar approach as mandated in the Laws of State Finance, that is the performance based budget, integrated budget and middle-term perspective budgeting. In its development, for the period of 5 years since the Government Regulation (PP) No. 21 was stipulated, it indicates that the arrangement in PP 21/2004 can no longer accommodate the dynamic demand of budgeting system application fully. Therefore, the Government shall follow it up by issuing an amendment (revision) of PP 21 of 2004, namely PP 90 of The Indonesian Budget Overview

108 Substantive Changes and Technical Changes In broad outline, the issuance of PP 90 of 2010 is much more based on the needs to immediately restructure the programs and activities that are available all this time, in order to be oriented to the improvement of accountability. The second reason, there is demand for the calculation of budget allocation in the orientation of efficiency, effectiveness, and continuously, and the last one, there is strong will from the Government to immediately apply the budgeting system application totally for all components of the state expenditures, including the Budgetary Part of State General Treasury (BP SGT). Principally, PP No. 90 of 2010 contains two amendments. Firstly, the substantive amendment, and secondly, technical amendment. Substantive amendment contains the composition of RKA-KL which initially only regulated the composition of RKA-KL for Ministries/Agencies to be expanded by adding the composition of expenditures for Non-Ministry/Agency (BP SGT) which all this time has no legal ground/foundation in the same level as the Government Regulation. The amendment further carried over is the consolidation of application to the Medium Term Expenditure Framework concept (MTEF) through the use of rolling budgeting system, and the thirdly, the strengthening of RKA-KL study process which was initially translated as an administrative activity in the form of adjustment of RKA-KL to the Temporary Plafond/Ceiling, and the cost standard was changed to become budget suitability evaluation activity (budgetary efficiency) and evaluation on the consistency of performance target with Government Work Plan (GWP). Furthermore, a provision governing the amendment of RKA-KL in the implementation of APBN (National Budget) will be regulated in more detail, and addition of provision concerning the measurement and evaluation of budget performance as an important instrument in decision making for budget allocation 104 Chapter II Implementation Of PBB And MTEF

109 (reward and punishment) shall be as well regulated. In the end of substantive arrangement, The Government Regulation No. 90 of 2010 will protect the activities which all this time have been available, namely integrated treasury information system integration and state budget. Amendment/ Improvement PP 21/2004 PP 90/ Addition to the coverage of BP SGT - 2. MTEF/rolling budget application - Article 4, par (3), Article 16, Article 17, Article 18, Article 24 Article 7, Article 9 par (5), Article 10 contains rolling budget 3. Strengthening of study process Article 10, par (4) and par (5) Article 10, par (5) 4. Amendment of RKA-KL in the implementation of APBN - Article Policy evaluation, measurement and budget performance evaluation Article 8 Article 5 par (3), Article 7, Article 9 par (1), Article 17 par (1), Article 19, Article Integrated information system - Article 21 The second amendment is the technical changes that cover, among others, nonattachment of RKA-KL format and budget classification as regulated all this time in the Government Regulation (PP) No.21/2004. As the substitution, by considering to change a more flexible format that follows up with alteration dynamics, the structure of format is regulated in a lower provision that is Presidential Regulation or Financial Minister s Regulation. Meanwhile, the second technical amendment will regulate with regard to structural adjustment of chapter and article in accordance with the specified chronology of materials. Comparison between the structure of Government Regulation (PP) No. 21 of 2004 and PP No. 90 of 2010 The Indonesian Budget Overview

110 Preamble Chapter I: General Provision Chapter II: Principles of RKA-KL Composition Part One: Basis of RKA-K/L composition Part Two: Contents and Composition of RKA- K/L Part Three: Approach of RKA-K/L Composition Chapter III: Process of RKA-K/L Composition Chapter IV: Other Provisions Chapter V: Transitional Provision Chapter VI: Closing Provision Explanation Appendix Preamble Chapter I: General Provision Chapter II: Approach and Basis of RKA-M/A Composition Chapter III: Process of RKA-K/L Composition and Its Utilization in the Process of RAPBN Composition Chapter IV: Budget Allocation and Budget Implementation Document Chapter V: Amendment of RKA-K/L In Implementation of APBN Chapter VI: Composition of RDP-BUN Chapter VII: Measurement and Evaluation of Budget Performance Chapter VIII: Program Information System, Budgeting and the State Budget Implementation Chapter IX: Closing Provision Explanation Chapter per Chapter Substantive Amendment One of the amendments which are sufficiently basic in PP 90 of 2010 is the strengthening of the function of RKA-KL document, both from the functions of planning, implementing or from the last level which is evaluation. In the planning function, RKA-KL as the planning and budgeting document which eventually will become a composition material of APBN (National Budget). The second function of RKA KL document if have been rectified by the Finance Minister will be functioning 106 Chapter II Implementation Of PBB And MTEF

111 as APBN implementation document and the last function is as an evaluating document. It is expected that Ministries/Agencies can benefit RKA KL document as a material and instrument to evaluate Ministries/Agencies performance or patron/controller/inspector Agencies (Ministry of Finance, PAN, BPKP, BPK). Although it must be recognized that RKA KL document at a glimpse still has a similarity with the available documents (Renja, DIPA, Lakip), however PP 90 of 2010 at least has given a room if the documents can be put together later on, that it becomes efficient, either in the aspects of time, energy, and fund in the process of completion. PP No. 21 0f 2004 PP No. 90 of 2010 Article 1 point 14: Article 1 point 8: RKA-KL is a planning and budgeting document RKA-KL is an annual financial containing programs and activities of M/A program document of M/A (Ministries/Agencies) that form illustration from the concerned GWP and Renstra K/L composed in accordance with M/A budget. within one budget year and the required budget to implement Furthermore, in the use of Temporary Plafond term, it is frequently perceived that the plafond in temporarily ansich, that M/A tends to focused on to implementing RKA-KL after Definitive Plafond is issued in November. This issue if left to occur will have a potential to reduce the quality of RKA-KL for there are some performance program (programs and activities) composed unexpectedly on November. Therefore, in PP 90 of 2010 it is confirmed that M/A Budget Plafond is in principle returns the function of the plafond as final plafond of the Government version, that the performance plan along with its fund must have been fixed in the The Indonesian Budget Overview

112 level of the Government before it is submitted to the House of Representative. PP No. 21 of 2004 PP No. 90 of 2010 Article 1 point 16: Article 1 point 14: Temporary plafond is budget plafond based on general policy and budget priority resulted from the Central Government Discussion and M/A Budget Plafond is the highest limit of budget allocated to M/A in composing RKA-K/L the House of Representative as a reference in composing RKA-KL. And so is in the establishment of expenditures budget plafond amendment, in this PP had been stipulated that APBN-P can be implemented if there are actually changes in macro level that result in the calculation of revenue amount and/or expenditure or budget priority to change, meanwhile if budget economization or optimizing occurs, such economization or optimizing can not be used as the consideration in implementing APBN-P. PP No. 21 of 2004 PP No. 90 of 2010 Unregulated Article 3 par (5) Amount of the state expenditure as referred to in par (2), letter b can be adjusted with the changes of fiscal capacity and/or the changes of budget funding as the result from: 1. changes of macro assumption. 2. Changes of the state revenue target. 3. Changes on the priority of the state expenditure; and/or 4. The use of excess budget balance from the previous years. Furthermore, in the strategy and basic of composing RKA KL, PP 90 of 2010 provides a confirmation that in accordance with article 9 Law No. 17 of 2003, 108 Chapter II Implementation Of PBB And MTEF

113 the composition of RKA-K/L constitutes the authority of Ministries/Chairman of Agencies as the Budget User (PA). Therefore, Budget User is in principle the official given the authority by the President to manage the state finance in Ministries/ Agencies he managed. The establishment of PA status by the President to the appointed officials, is stipulated in a separate regulation (PP, Perpres, or Keppres). Therefore, this concept will complete the mechanism of BA establishment which all this time had been conducted by DJA (which automatically makes the official who is in charge with BA as a PA). PP No. 21 of 2004 PP No. 90 of 2010 Article 2 par (1) Article 4 par (2) State Ministry/Agencies composes RKA- KL guided by the Government Work Program Ministry/Chairman of Agencies as Budget User is obligatory compose RKA-K/L over the Part of Budget of which he governs. New other issue which sufficiently basic is the existence of Finance Minister authority to compose RDP of the State General Treasury as referred to in Article 4 (3) of PP 90 of This is regulated in order to accommodate the needs of legal ground to compose BABUN by the Finance Minister. Furthermore, regarding budget classification, PP 90 of 2010 provides a firm mandate that RKA-K/L must be composed in structure and detailed in accordance with three budget classifications, that are organization classification, function classification and the last is the type of expenditure classification. Meanwhile, further arrangement shall be regulated by the Regulation of Finance Minister after coordination with Ministries/Agencies. In its connection with Agencies, particularly the House of Representatives, in PP 90 of 2010 it is provided that composing RKA-K/L which constitutes a part of composing The Indonesian Budget Overview

114 the RAPBN is the authority of executive. Therefore, there are standards given in this PP that must be fulfilled by every M/A when discussing RKA-K/L together with its colleague Commission in the House of Representatives. Although this is very hard, however from the side of the Government this issue must be regulated that in the future if there is any problem occurs, the standards have already been clearly stipulated. Then, in order to strengthen the process of discussion which was initially had the impression and practiced as a clerical adjustment activity (in Article 10 of PP 21/2004 called as conformity discussion ) becomes an activity in the form of suitability evaluation and consistency of performance program (Article 10 par (5) of PP 90/2010). In its connection with budget allocation and budget implementation document, article 12 of PP No. 90 of 2010, it confirms that no later than October, the Government and the House of Representatives must have completed the discussion of RAPBN and Draft Bill on APBN. If a budget plafond optimizing obtained, then the budget plafond optimizing will be used by the Government in accordance with the policy that had been stipulated by the President. What is meant by budget plafond optimizing is addition of the state expenditures budget plafond and/ or funding from that is stated in the RAPBN and/or budget reallocation between BP M/A and BP SGT (Budgetary Part of State General Treasury) with or without changes of plafond of spending. Regarding RKA K/L revisions in the current year, in this government regulation, Ministries/Agencies can amend RKA-K/L in the case that there is additional and/ or reduction of budget allocation as a consequence of APBN Amendment and/or expenditures reallocation from those that had been stipulated in the document of budget implementation; and/or there is an amendment to the document of budget implementation that requires approval from the House of Representatives. 110 Chapter II Implementation Of PBB And MTEF

115 Particularly for the Composition of the State General Treasury Expenditure Fund, PP 20 of 2010 provides an explanation in order to run its function as the Budget User of SGT (State General Treasury), the Finance Minister establishes Budget User Assistance of SGT (PPA-BUN). PPA-BUN is the chairman unit of echelon I in the environment of Finance Ministry and it is different from KPA. Furthermore, it is explained that PPA-BUN Concept is in principle considered as a confirmation of the mechanism that have been running all this time, in relation with the arrangement of BA through BA , and KPA function can be hold and implemented by any official outside the Finance Ministry office who has the duty to implement SGT programs and activities. Settlement of fund allocation for SGT spending can be implemented prior to the commencement of planned budget year, or can also be stipulated in the current budget year. Measurement and Evaluation of Budget Performance Other new issues stipulated in PP 90 of 2010 is that Ministries/Chairman of Agencies should measure and evaluate the performance of RKA-K/L implementation. Meanwhile, evaluation coverage consisting of implementation of RKA-K/L from the previous year and the current year RKA-K/L. Contents of performance measurement and evaluation shall at least covers the level of output, result achievement, efficiency level, consistency between the plans and implementation (the more revision and the lower consistency level), realization of budget absorption, Finance Ministry and Bappenas shall monitor the achievement of M/A performance, and the last the performance evaluation result by M/A and the monitoring result of performance achievement by Finance Ministry and Bappenas can be used as a material to consider reward and punishment application in establishing allocation for M/A budget. The Indonesian Budget Overview

116 Information System of Planning, Budgeting and Implementing of the State Budget To anticipate in the future, particularly those related with information system, PP 90 of 2010 provides a room to the Finance Minister to implement planning information system, budgeting, and implementing of the integrated state budget, which currently has been implemented through SPAN activities. In the future, this integrated information system needs to be continuously developed and improved that it can be optimal in supporting the management of the State Finance. Closing In the end part of PP No. 90 of 2010, a provision concerning implementation regulation of PP No. 21 of 2004 (various PMK) still remain valid as long as it is not violate the provision of PP 90/2010 or has not yet been substituted with the new provision in accordance with the mandate in PP 90/2010, secondly PP 21/2004 shall be revoked and declared invalid, and the last the provision regarding BUN shall be implemented no later than 2 (two) years after PP 90/2010 is promulgated (no later than 27 December 2012). 112 Chapter II Implementation Of PBB And MTEF

117 CHAPTER III Current Issue State Ministries /Agencies Budget Economization Policy In The Budget Year Of 2011 Sharpening the Accuracy of Budget Plan in The State Ministries/Agencies Through Budget Revision Displacement Of Budget From The Budgetary Part Of State General Treasury (BP SGT ) To The Budgetary Part Of State Ministry/Agency (BP M/A) Implementation of Reward and Punishment In the Budgetary Fiscal Year of 2011

118 114 The Indonesian Budget Overview 2011

119 CHAPTER 3 AGENCIES BUDGET ECONOMIZATION POLICY IN THE BUDGET YEAR OF 2011 STATE MINISTRIES /AGENCIES BUDGET ECONOMIZATION POLICY IN THE BUDGET YEAR OF 2011 Introduction The State Finance is managed professionally, openly, and accountably as confirmed in the 1945 Constitution, and furthermore explained in the general principles of the State Finance management, which regulates that the State Finance management must have the principles of, among other, accountability oriented to the result, professionalism, proportionality and openness, as well as financial audit by an independent audit agency. Therefore, the National Budget (APBN) of 2011 that has been stipulated in supporting the achievement of the Government Work Program (RKP) of 2011, it must be managed with a principle of fair and prudent state budget management, so that it can be confirmed that the budget management can be implemented efficiently and effectively. A precise budget management policy is expected besides to maintain the stability of economy, also to support the economic growth. An efficient and effective management of the state budget, as confirmed by the President of the Republic of Indonesia upon the Submission of Budget Implementation Activity List (BIAL) of 2011, is the utilization of budget supported with a creativity, innovation, and a good initiative, so that it will be able to achieve the specified performance target The Indonesian Budget Overview

120 by using the fund which must be managed as economically as possible. Besides, the President of the Republic of Indonesia also stated that the economical efforts in implementing activities can be in the form of cost saving for official travels, meetings, and implementation of operational activities or non-operational activities of which economization efforts are still possibly implemented. In this writing, the economization policy in the State Ministries/Agencies budget will be further covered, which is conveyed through the issuance of the Presidential Instruction No. 7 of 2011 concerning State Ministries/Agencies Budget Economization in the Budget Year of Background Increasing of expenditures budget for the Central Government for the last six years (2005 through 2010), turns out to have not been well implemented. One of the most visible parameters is the low capacity of absorption of the State Ministries/ Agencies over the allocated budget. The increasing of budget from year to year fails to be supported with a significant absorption capacity of budget. In Table 1, it shows the information that with the average raise of Budget of State Ministries/Agencies per year during 2005 through 2010 is 18,63%, not yet supported by maximum absorption ability, considering average absorption of expenditures budget of State Ministries/Agencies per year is still in the range of 89,13%. The State Ministries/Agencies expenditure allocation from 2005 to 2010 increased from IDR , 2 billion in 2005 became IDR ,6 billion per 2010, or increased 18,30% averagely per year. Meanwhile, realization State Ministries/Agencies expenditures which increased from IDR ,0 billion in 116 Chapter III Current Issue

121 2005 became IDR ,2 billion in 2010, has not yet been supported with a better expenditure absorption of State Ministries/Agencies. It is shown that the comparison of the realization of State Ministries/Agencies expenditures per year tends to be low, particularly in 2010 if it is compared to the realization in 2009, although in 2010 the realization of State Ministries/Agencies reached to 90,9% from the allocated plafond/ceiling. It indicates that the increasing of State Ministries/Agencies expenditure has not been supported with improvement in the performance in State Ministries/Agencies which among others indicates with the increase of absorption capacity of the State Ministries/Agencies expenditure per year. Table 1 Absorption of the State Ministry/Agency s Expenditure In the Budget Year of (Billion Rupiah) YEAR APBN-P Realization % , , , , , , , , , , , , Source: Pocket Book of APBN and Economy Indicator, July and September edition, 2011 Furthermore, one of the efforts to improve absorption ability of State Ministries/ Agencies budget/expenditure, particularly in 2011, and also to improve the quality of State Ministries/Agencies budget and to protect APBN (National Budget) of 2011, the Government deems necessary that a re-exacerbation for The Indonesian Budget Overview

122 the programs or activities allocated in Therefore, the increase in the central government s budgetary allocation which all this time tends to escalate is expected to be balanced with the realization of budget absorption as illustrated in Figure ,000.0 Figure 1 tion The Central Government s Budget Absorption In The Budget Year of , , , , , ,406.3 milyar Rp 600, , , , , , , , , , ,812.5 APBN P Realisasi 200, , Source: Pocket Book of APBN and Economy Indicator, July and September edition, 2011 As it is stipulated in the 1945 Constitution, the National budgets is the form of the state finance management stipulated every year and implemented openly and accountably for as many as possible used for the wealthy budgets of the is people. the form Therefore of APBN (national Budget) is drawn up in accordance with lemented the needs openly of and the state governance management in efficient, justly, and sustainable he people. principles Therefore with the guidance to the Government Work Plan. This issue is also regulated in the Law No. he needs of the state 17 of 2003 concerning the State Finance, that the State Finance shall be managed principles with the in orderly, obediently to the legislation, efficiently, economically, effectively, ulated in the Law No. transparently, and accountably in observance to the justice and fairness. e shall be managed in Chapter III Current Issue omically, effectively, airness.

123 As the follow up of direction conveyed by the President of the Republic of Indonesia upon the submission of BIAL (Budgetary Implementation Activity List) for the Budget Year of 2011, as well as the form of the Government seriousness to review APBN of 2011, the State Ministries/Agencies are instructed to be able implement expenditure economization efforts. The economization efforts shall be implemented in improving the expenditure quality and protection of APBN All this time, expenditures of State Ministries/Agencies particularly for overhead costs is considered to be high, therefore an exacerbation effort needs to be implemented towards the implementation of programs/activities (focusing), that it is expected to be able to improve the quality of State Ministries/Agencies expenditure. Other than the high supporting costs, in the case of the budget absorption by State Ministries/Agencies it has not indicated any optimal efforts, considering the State Ministries/Agencies in the current year has frequently proposed an additional budget through APBN mechanism which eventually will cause a burden to APBN (National Budget) with the increase of budget deficit, consequently it requires an additional funding to protect the APBN. Direction from the President of the Republic of Indonesia with economization effort implemented by State Ministries/Agencies, among others will be benefited as a pilot project cluster IV plus 3 additional programs which are implemented in 2011 using the result of economization. The utilization of economization result used to fund activities included in Cluster IV plus 3 additional programs covers very cheap housing program, cheap public transportation vehicles program, clean water program for the people, cheap and economized electricity program, fishermen life improvement program, suburban people life improvement, food sustainability program, Jakarta transportation program, and working opportunity program. The Indonesian Budget Overview

124 Strategy and Direction of Economization In accordance with the President Instruction No. 7 of 2011 concerning Expenditures Economization of State Ministries/Agencies of 2011, it is stipulated that all State Ministries/Agencies are instructed to take required measures in accordance with the respective duties, functions and authorities in order to improve spending quality of State Ministries/Agencies, and an effort to protect the National budget in the Budget Year of The Measures taken in relation to the economization efforts is that State Ministries/Agencies shall take economization efforts to the budget in the minimum of 10% (ten percent) from the State Ministries/Agencies plafond that had been stipulated, however after calculating the needs for employees spending and office operational, as well as budget allocation for activities which are in the base from Non-Taxable State Revenue (NTSR), Overseas Loan and Grant (OLG), Supporting Pure Rupiah (SPR), and Domestic Loan (DL). Economization measures are implemented through discussions on activities of official trips, except for very important ones and urgent; limitation in the case of meeting organizations, workshops, seminars, and confinements outside the office; limitation on operational spending, except for defense and order operational; and other economization efforts related to the non-operational spending. Furthermore, the said economization efforts are implemented by keep maintaining budget allocation fulfillment for education of 20% (twenty percent) in the minimum from the State Expenditure of 2011; national development priority achievement as stated in the Government Work Plan of 2011; salary payment fulfillment, allowance attached to salary, fixed honorarium, overtime and vacation; operational and minimum office maintenance cost fulfillment; fulfillment of activities of which 120 Chapter III Current Issue

125 implementation is more the one budget year (multi years project); and supporting fund fulfillment for activities originally from Overseas Loan and Grant (OLG) and Domestic Loan (DL). Mechanism for submission of economization result shall be conducted by the State Ministries/Agencies by submitting economization proposal and reporting the amount of the budget allocation saved by each Ministry/Institution to the President, with copies submitted to the Minister of Finance and the Minister of National Development Planning /National Development Planning Board. The saved budget allocation can be re-benefitted where the utilization of the economization result is stipulated through Cabinet Meeting, and shall be used to fund activities among other things are categorized as National Development Priority target achievement acceleration, such as infrastructure construction and security of food and energy supply; new policy which has not been stated in the Government Work Plan (GWP) of 2011; or for urgent programs/activities. Including re-utilization of economization result used to fund additional program of activities included in Cluster IV plus 3, covering very cheap housing program, cheap public transportation vehicle program, clean water program for the people, cheap and economized electricity program, fishermen life improvement program, suburban people life improvement program, food endurance program, Jakarta transportation program, and employment opportunity program. Economization Step and Its Utilization Plan Policy of this budget economization requires total commitments and supports from all State Ministries/Agencies as the units organizing the programs, activities and the central government budget in achieving state target that annually is stated in the programs and activities funded from the APBN (National Budget). The State The Indonesian Budget Overview

126 Ministries/Agencies involvement in the policy should be conducted by evaluating and reviewing all programs/activities budget allocation that have been stipulated in RKAKL and BIAL of 2011, particularly activities which materially are not priority, not urgent, nor has an implication fast/directly to service improvement for the community to furthermore implement a re-allocation focused on the programs/ activities as stated in the Presidential Instruction concerning economization (Refocusing). In the stage of policy application, budget saving can not be conducted by all State Ministries/Agencies with various considerations. Out of 79 (seventy nine) State Ministries/Agencies, there are 75 (seventy five) SM/A (State Ministries/Agencies) that implement saving policy, meanwhile 3 (three) M/A fail to carry out saving effort, that are the House of Representatives of the Republic of Indonesia (BP 002), General Election Commission (BA 076) and Indonesian Workers Placement and Protection Agency/BNP2TKI (BA 104), meanwhile the Ministry of National Education (BA 023) is exempted from this saving policy. The Indonesian Legislative Assembly (DPR-RI) can implement saving delivered through the Letter of the Secretary General of DPR-RI to the Minister of Finance of the Republic of Indonesia, for the attention of the Directorate General of Budget No. PR.00/9279/DPR RI/XII/2010 dated 8 December 2010 concerning that the Memorandum which confirms that the Indonesian Legislative Assembly can not yet conduct saving effort of 10% (ten percent) from the Expenditure in the Budget Year of 2011 due to still awaiting for a discussion process together with the State Domestic Affairs Agency (SDAA) of DPR-RI. The General Election Commission and the Indonesian Workers Placement and Protection Agency/BNP2TKI fail to conduct saving with the consideration that the activity allocated in RKAKL of 2011 should be the national priority activity as stated in the GWP (Government Work 122 Chapter III Current Issue

127 Plan) of 2011 and RPJMN. Other than the three SM/A (State Ministries/Agencies), the Ministry of National Education constitutes the ministries that is admitted to exceptions from this saving policy bearing in mind that all budget in the Ministry of National Education is the budget allocation for education function, then saving effort can be conducted directly in the re-allocation place for prioritized activities in order to keep the proportion of education budget fixed 20% from APBN. In accordance with the Presidential Instruction No. 7 of 2011, budget allocation saved can be reused by State Ministries/Agencies for the funding of activities that satisfy the following criteria: 1. The Acceleration of National Development Priority Target Achievement (infrastructure construction and food and energy supply safety). 2. New Policy that has not be stated in the RKP of Programs/Policies which are urgent. Furthermore, for State Ministries/Agencies having duties and functions in creating field works, the utilization of such saving result can be used in creating field works in order to for the application of the Government policy in relation with Indonesian Workers moratorium, meanwhile SM/A (State Ministries/Agencies) who will refocusing the qualification of survey result can be conducted by re-submitting the utilization proposal exacerbation to the Finance Minister, in this case, Directorate General of Budget. The amount of budget allocation that can be saved for 75 (seventy five) State Ministries/Agencies is in amount of IDR , 7 billion, amount of utilization plan proposal from the saving result is IDR ,6 billion, meanwhile the rest of IDR 336,1 billion is not reused. The utilization of saving result as stated in Table 2 will be explained in detail as follows : The Indonesian Budget Overview

128 Table 2 UTILIZATION PROPOSAL OF SAVING RESULT BASED ON THE CRITERIA OF THE PRESIDENTIAL INSTRUCTION NO. 7 OF 2011 No. Criteria Number of M/A Amount of Budget Allocation Percentage (%) 1. National Priority 49 8, Achievement Acceleration 2. New Policy had not been stated in GWP 17 1, Urgent Program/Activity 37 4, Fail to fulfill criteria/need Classification **) Total 15, *) Some M/A Organize more than one criteria. **) Still in evaluation process In its application, the utilization plan of the saving result by State Ministries/ Agencies is allocated in several development targets. The highest percentage of the utilization plan is to fund activities in order to support organization of activities and function of M/A, particularly in providing public service to society, and for infrastructure construction. Detail of utilization is as stated in table 3 below: NO. Table 3 UTILIZATION OF ECONOMIZATION RESULT BASED ON TARGET TARGET Billion Rupiah AMOUNT OF BUD- GET ALLOCATION PERCENTAGE (%) 1. Infrastructure 1) 4, Food Resilience 1, Energy Resilience 1, Cluster 4 (Pro People Program) 2) Cluster 1 (Poverty countermeasures) 3) Educational Budget 4) 1, Law Enforcement National Security Building Capacity Chapter III Current Issue

129 10. Indonesian Labor Protection Bureaucracy Reformation Overseas Affairs 5) Others 6) 4, Total 15, Construction of Infrastructure for Natural Disaster Emergency Response; Construction of Rusunawa and its Supporting Infrastructure; Construction of Infrastructure Fast Track Along the Economy Corridor in 33 Provinces; Including Merauke integrated Food and Energy Estate (MIFEE) and Preparation of Road Infrastructure Development Acceleration Along the Economy Corridor. 2. Very Cheap Housing Program and Self-Supporting Housing Construction; Fishermen Life Improvement and CTI Summit; Infrastructure Improvement in Slump Areas and Provision of Basic Infrastructure in RSH Area; Clean Water Supply and Soil Water Conversion Monitoring Improvement. 3. Improvement on Infrastructure and Facilities in UPT Vertical Hospital and SKPD Hospital; Supply of Supplement Food for Pregnant Mothers, Malnutrition Babies and Children; Supply and Distribution of Medicines that Fulfills the Standard and Affordable by the People; Social Rehabilitation Assistance for Unsuitable for Dwelling in rural areas and Cities. 4. Lack of Allowances for Civil Servant Teachers, Construction of Madrasah Students dormitory in Islamic Boarding School and Classrooms Upgrade. 5. Deployment of Peace Troops to Sudan and Implementation of ASEAN Fair of Tusi supporting Activity of M/A, Construction of Building for Public Service, Construction of Office Buildings. Plafond adjustment of State Ministries/Agencies after saving efforts is reported to the President along with the budget utilization plan after saving result, furthermore The Indonesian Budget Overview

130 be stipulated in the cabinet session. Utilization completion process from saving result is conducted with a budget revision mechanism in accordance with the prevailing regulation. Based on Law No. 10 of 2010 concerning the National budget of 2011, it is stipulated that the definition of authority of the Government (Finance Minister) in making revision shall cover expenditure budget shift from Budget Division (Other Expenditures) to the Budgetary Part of State Ministries/ Agencies; among activities within one program as long as the shift constitutes the optimal result and not reducing output volume that have bee planned, and/or among types of spending in one activity; the changes of spending originally from the excessive realization above the target of the Non-Taxable State Revenue; the changes of project loan plafond and overseas grant (OLG) and domestic loan and grant (DLG) as a consequence of the continuation and acceleration of OLG and DLG withdrawals, including overseas grant/domestic grant after a Law concerning APBN is stipulated, and the changes of overseas project loan plafond as a consequence of the reducing of overseas loan allocation. Other than the provision, it must be first obtain approval from the House of Representatives of the Republic of Indonesia. In several State Ministries/Agencies, utilization proposal of saving result to State Ministries/Agencies spending also result in displacement of budget allocation among activities which not resulted from optimal result and among programs that it needs to first obtain approval from the House of Representatives. Detail of the utilization settlement from the saving effort as stated in table Chapter III Current Issue

131 Table 4 UTILIZATION PROPOSAL SETTLEMENT OF SAVING RESULT ACCORDING TO THE AUTHORITY Billion Rupiah No. Description Amount Percentage 1. The Government authority 6, DPR authority 9, ,5 Total 15,26l Saving in the Ministry of National Education Although the Ministry of National Education (Kemdiknas) fails to be the target of State Ministries/Agencies that must implement saving as confirmed in the Presidential Instruction No. 7 of 2011, however the Ministry of National Education remains has a commitment to implement Presidential Instruction by conducting review over the budget allocation and activities that have been stipulated in the RKAKL and BIAL of Several steps to be implemented by the Ministry of National Education is by performing efficiency to official trips and coordination meetings activities, and the considering activities organized outside office to be furthermore transferred to the prioritized activities which directly touch the society in supporting the programs and activities in educational field, among others to Expand Scholarship coverage in the levels of Basic Education, Middle Education and Higher Education; Addition of target to build New Classes, New School Unit; Piloting of Teachers Profession Education; Education Quality Guarantor; and Observation Activity in the Level of Higher Education. The Indonesian Budget Overview

132 The amount of budget allocation that can be obtained through efficiency by the Ministry of National Education is in amount of IDR billion with the details of spending on the prioritized activities as shown in Table 4 as follows: Closing Budget saving policy in 2011 issued through the Presidential Instruction No. 7 of 2011 is considered to be an effort to improve quality of State Ministries/Agencies expenditures and also to secure the National Budget in the Budget Year of 2011, as a form of the Government s responsibility and commitment in implementing development programs. In its implementation, it is expected to be able followed up by State Ministries/Agencies in accordance with their respective duties and functions. However, the implementation was not conducted as it should be, since the steps taken by the State Ministries/Agencies were less accurate and failed to expressly pay attention to the instructions, them resulting in difficulties in the implementation. For an example, an instruction that the saving result utilization proposal must consider the mechanism and procedure of budget revision, that the utilization proposal for the budget allocation saved should be as maximal as possible in the framework of the Government authority. In its practice, there are many utilization proposals for the saved budget in the framework of the Indonesian Legislative Assembly s authority, either in the form of inter-program or inter-activity displacement which are not from any optimal outcome, so to implement it, an approval of DPR-RI shall be first obtained. Saving policy which is based on the wishes of the Government to improve expenditures quality and to secure APBN of 2011, in the stage of implementation becomes less optimal when in the implementation stage, a more technical policy has not yet totally guided the steps of implementation that has been regulated in 128 Chapter III Current Issue

133 Table 4 FOCUS ON UTILIZATION OF EFFICIENT RESULT IN THE MINISTRY OF NATIONAL EDUCATION Billion Rupiah No. Description Saving (IDR) Spending (IDR) 1. Saved activities a. Official Trips b. Non-official Trips 2. Utilization on activities of: a. 10 Integrated Pilot Projects, 10 Pilot Projects for Elementary School and Junior High School, 10 Pilot Projects for Vocational School in Fishermen Area (Cluster 4) b. National Campaign: National Educational Operational Aid Movement, Strategic Activities of Basic Education, Middle Education, Human Resources Development Program for Education and Education Quality Guarantee, Balitbang Activity, Language Development and Secretarial Activities. c. Educational Operational Aids d. Scholarships for the Poor in Basic and Middle Educations e. Scholarships for Master level, and observation for Higher Education f. Building of new classes, New School Units and Upgrade in Basic and Middle Education g. Observation to Support P3EI of Higher Education h. Piloting for Teacher Profession Education i. Implementation of Society Higher Education and Student. j. Character Education of PAUD level, Basic Education, and Middle Education k. Evaluation of PTK Post Certification l. School Master Reinforcement and Controller as Assessor m. Revitalization of Education Quality Guarantor Agency n. Curriculum Evaluation o. Accreditation Acceleration p. Language Culture Development q. Reinforcement of E-Administration and Service r. Bureaucracy Reformation s. Superior scholarship for Human Resources t. Additional of School Zone Node u. Reinforcement of Data System v. Capacity Building w. Construction of New Unit Building x. Reinforcement of Controlling System y. Supporting Activities Total The Indonesian Budget Overview

134 the Presidential Instruction, besides the less consistency of saving programs along with the proposal of re-utilization of saving result that have been agreed by the Government in the Cabinet Session. One of the possibilities to the cause is the lack of technical instructions in the implementation level, that each State Ministry/Agency defines its respective instructions which are well received in the Cabinet Session or in the Coordination Meetings. 130 Chapter III Current Issue

135 CHAPTER 3 AGENCIES THROUGH BUDGET REVISION Sharpening the Accuracy of Budget Plan in The State Ministries/Agencies Through Budget Revision TheNational Budget (APBN) as regulated in the explanation of article 3 (paragraph 4) of the Law No 17 of 2003 concerning State Finance has a very strategic function. The function covers : 1) Authorization function, where the state budget as the base to implement revenues and expenditures of the relevant year; 2) Planning function, where the state budget as a guideline for the management in making plans of activities for the relevant year; 3) Controlling Function, where the state budget becomes a guideline to evaluate whether the activity of the state governing implementation is in accordance with the stipulated provision; 4) Allocation Function, where the state budget must be directed to reduce unemployment and resources redundancy, and to improve economy efficiency and effectiveness; 5) Distribution Function, where the state budget policy must give senses of justice and fairness; and 6) Stabilization Function, where the Government budget becomes an instrument to keep and maintain fundamental balance in economy. The Indonesian Budget Overview

136 General Description As an instrument of planning, the National Budget (NATIONAL BUDGET) is structured using assumptions which certainly do not escape from various internal or external factors. Should any change occur towards the basically natured assumption, such as changes in economic growth target, inflation, oil price or exchange rate which significantly will have an effect to the National Budget (APBN), the Government may submit a proposal on the amendment to the National Budget (APBN-P) to the Indonesian Legislative Assembly. Other than through APBN-P mechanism, the Government can also obtain an approval from the Indonesian Legislative Assembly on some changes, such as among others: displacement of programs/activities, shift of inter-province/ regency/city budget and the use of other budgets (Budgetary Part 999), particularly in respect of budget in State Ministries/Agencies. This mechanism is principally known as a budget revision, which on this writing is limited to the budget revision related to the State Ministries/Agencies. As an instrument in implementing the National Budget, a budget revision has a strategic position in national economy. This position is at least visible from the function of the budget revision itself that can be as an instrument to administer the major or minor level of the state expenditures on a certain momentum. When inflation is high or when deflation occurs, it is ideal that an arrangement towards the State Expenditure need to be implemented in achieving balance level. One of the instruments to control the State Expenditures is through a budget revision. Concretely, through the budget revision, tightening on the State expenditures can be sought, such as through reduction of State expenditure (in this case, State Ministries/Agencies expenditures). A sharpening towards the State Ministries/ Agencies expenditures for their not-urgent time schedule of expenditures Activities can also be implemented to reduce inflation. On the other hand, in 132 Chapter III Current Issue

137 certain conditions, the budget revision concentrated for urgent needs is also required, such as labor incentive, cash for work, emergency response and other urgent expenditures. Allocation exacerbation (sharpening) on activities having effect on long-term investment that is then expected to give a strategic impact on economy in the future such as constructions of harbors, new roads, airports and others can also be prioritized through budget revision. Such situations are of course demand a conducive arrangement of budget revision that can encourage improvement of quality achievement in national economy. In such a way that budget revision can be positioned as a policy contributable to the national economy, particularly to direct the government expenses / expenditures on the achievement of pro poor, pro growth, pro job and pro environment. In such context, budget revision is not only an administrative measure, but also a policy having a wide impact on the national economy. In reference to that, flexibility and rigidity in budget revision form something which in a certain situation becomes a natural issue. It is perceivable in accordance with dynamics condition of national economy growth. Therefore, regulation concerning budget revision should have a spirit in line with the available economy dynamics, which can provide facilitation to solution on the available economy problem and give encouragement to achieve quality in national economy. Definition of Budget Revision The accurate plan contained in a Budgeting document should be an ideal condition. In an implementation level, such plan will be influenced by some unidentified factors upon the planning, such as the existence of new policy issued by the Government. The existence of new law mandating certain budgeting shall also form one of causal factors for the needs of adjustment to the drafted plan. This condition is caused The Indonesian Budget Overview

138 by any Activity which was not initially planned to be allocated into the budgetary document. Those factors require flexibility on allocation changes in the current budgetary document. To overcome such situation, in several countries we know what is called Virement, a term in France, which is meant as the agreed transfer of money from the budget heading to which it has been allocated to another budget heading. It is an approval on money transfer from a budget post (expenditures group) that has been allocated into other expenditures groups. Meanwhile, ADB countries define it as The (simultaneous) transfer of expenditure provision from one line item (object; sub-program) to another during the budget year. In Indonesia, budget revision constitutes a mechanism that had been implemented prior to the enforcement of the Law No. 17/2003 concerning State Finance, and the mechanism is still recognized until now. Legal foundation for revision authority can be seen in article 22 of the Law No. 10 of 2010 concerning the National Budget (APBN) of 2011, in such Law, the Government is authorized to make further detailed changes of the Central Government budget. Henceforth, some authorities of the Government has been made in detail in some authorities covering : a) displacement of budget from The Budgetary Part (Other Expenditures) to the Budgetary Part of State Ministries/Agency (M/A); b) inter-activities within a program so far as such displacement comes from the optimal outcome and shall not reduce the planned output volume; c) inter-types of expenditures in an activity, changes of expenditures deriving from excessive realization above PNBP target; d) changes in plafond of Overseas Grant and Loan (OGL) as the consequence of continuation and acceleration of withdrawal for Overseas Grant and Loan (OGR), and DGL (Domestic Grant and Loan) ; e) including overseas grant/domestic grant after the Law concerning the National Budget (APBN) is stipulated; f) changes in overseas loan plafond as the consequence of overseas loan allocation reduction; g) the use of budget from PNBP above the National Budget plafond for state 134 Chapter III Current Issue

139 universities and BLU. As the follow-up from the mandate of the law, Regulation of Minister of Finance Number 49/PMK.02/2011 concerning Procedure to Revise the Budget of 2011 was issued. In the Financial Minister s Regulation above, Budget Revision is defined as the amendment to the Central Government Expenditures Detail that had been stipulated based on APBN (National Budget) of 2011, The Decree on Work Plan of State Ministries/Agencies (SP RKA-KL) of 2011, and/or Budgetary Implementation Activity List (BIAL) in the Budget Year of Further Arrangement for Budget Revision Philosophically, the provision in the budget revision as set forth in the PMK is put in the framework of the Performance-Based Budget approach having the specifications as follows: a) output and outcome are oriented to the budget allocation. b) Program/Activity budget allocation is based on the roles and function of Work Unit attached to the organizational structure (money follow function), and c) there is flexibility on budget management by keeping on maintaining accountability principle (let the manager manages). In this context, budget revision authority is more flexibly regulated and gives more authority to the Budget User (BU)/Proxy of Budget User (PBU) in making revision in accordance with the specified authority. Flexibility in the revision should of course not mitigate the accountability of State Ministries/Agencies in justifying the budget. Such flexibility is reflected from the arrangement of authority to Revision by BU/ The Indonesian Budget Overview

140 PBU as set forth in the Financial Minister s Decree Number 49/PMK.02/2011 which covers : a) output volume addition in one output and/or inter-output within an Activity and one work unit; b) displacement of inter-components to fulfill Operational Cost need; c) displacement of inter-components in one output as long as it does not create any new kind of honorarium nor the amount of the current honorarium, and d) displacement of inter-components and inter-outputs in an Activity. On the other side, accountability in the implementation of revision by BU (Budget User)/PBU(Proxy of Budget User) can be seen from the existence of the provision of obligation to submit the revised Computer Data Archives performed by BU/ PBU to the Ministry of Finance (Directorate General of Treasury). Furthermore, special limitations, which may not be violated in the revision performed by the BU/PBU, shall be also specified, such as: a) not reducing budget allocation for the needs of operational cost of work unit, allocation for the subsidies of teachers/ lecturers and honorary allowance, the needs for food supplies for detainees/ prisoners, payment of various arrears, multi-years work packages, contracted work packages and/or fund of which has been put into realization that it becomes minus; b) not change any performance target in the form of not reducing output volume of the national prioritized Activity and/or field priority and not reducing any output specification; c) In the case that the budget revision brings changes to BIAL (Budgetary Implementation Activity List), then changes in ODA (Operational Directive for Activity) can be just stipulated by the PBU (Proxy of Budget User) after the changes of BIAL are rectified. Such provision is intended that the spirit of implementing budget shall maintain check and balances between the concerned working unit in the environment of State Ministries/Agencies (SM/A) and the Ministry of Finance, without reducing flexibility in implementing the budget. 136 Chapter III Current Issue

141 In practice, the implementation of this authority still convokes various interpretations, that there are still revisions which are actually under the authority of BU/PBU, but submitted to the Directorate General of Budget, for the example as written in the reply letter from the Director General of Budget dated 20 th June 2011 No. S-1365/2011 to one of the Ministries for the submitted revision constitutes the authority of BU/PBU (Budget User / Proxy of Budget User). Besides the budget revision made by PBU, there is also a revision authority implemented at the Central Office/Regional Office of the Directorate General of Treasury. Revision authorities by the Regional Office of the Directorate General of Treasury is of course for the interest of Work Units in the regions so that in making revision on certain budget, it shall not be made in the central office (DJA/ Directorate General of Treasury), so it will make it easier for completion. For more detail, authority for revision in the Central Office/Regional Office of the Directorate General of Treasury covers: a) receiving Overseas Grant/Domestic Grant after the Law concerning APBN (National Budget) of 2011 has been stipulated, received in the form of money and directly implemented by the State Ministry/Agency; b) the use of budget originally from PNBP above APBN s plafond for BLU work unit; c) displacement of inter-programs in one part of Budget to fulfill the needs of Operational Cost; d) displacement of inter-types of expenditures in one Activity; e) displacement of inter-provinces/regencies/cities for Activity in the framework of Assisting Duty and Collective Affairs, or in one province for an Activity in the framework of De-concentration; f) displacement of inter- provinces/regencies/cities to fulfill Operational Cost car- The Indonesian Budget Overview

142 ried out by the organizational unit in central level or its vertical institution in regions; g) changes of expenditure specification as a consequence of settlement of last year s arrears to the extent of the same program, the fund is still available and shall not reduce any performance target; h) displacement of budget detail for BLU work unit whose source of fund is originally from PNBP; and/or i) amendment/correction due to administrative mistake, such as correction to account code in accordance with the accountant principle to the extent of the same allotment and target, including resulting in changes to the types of expenditures and having been put into realization, correction to KPPN code, changes in nomenclature of budgetary division and/or work unit as long as the code remain the same, correction to OGL (Overseas Grand and Loan/DGL (Domestic Grant and Loan) registration code number, correction to authority code, correction to allocation code, changes of treasury officials, correction to the method of OGL/DGL withdrawal. Furthermore in certain cases, budget revision constitutes the authority of the Directorate General of Budget which covers the changes in addition and/or changes or displacement of budget breakdown as a consequence of : a) any excess of PNBP realization, continuation to the implementation of Activity which of fund is originally from OGL (Overseas Grant and Loan) and/or DGL (Domestic Grant and Loan; b) continuation to the implementation of Activity which of fund is originally from OGL and/or DGL, c) acceleration of OGL and/or DGL withdrawal; d) revenues from Overseas Grant/Domestic Grant including grants which will 138 Chapter III Current Issue

143 be granted continuously after the Law concerning APBN (National Budget) of 2011 is stipulated and received by the Government, in this case,. Ministry of Finance, and implemented by the State Ministry/Agency/Regional Government/State-Owned Corporation/Regional-Owned Corporation; e) reduction of OGL and/or DGL allocation; f) the use of expenditures originally from PNBP above the National Budget plafond for State University not BLU work unit; g) changes of parameter in subsidy calculation; h) displacement of budget from BP SGT (Budgetary Part of State General Treasury) of other Expenditure Management (BP ) to the Budgetary Agency for State Ministries/Agencies; i) changes of Output Volume in the form of reduction of Output volume in one Activity and one work unit; j) changes of Output Volume in the form of addition or reduction of Output volume among Work Units as long as it is in the same Activity and used for the same Output; k) changes in exchange rate, as long as the changes occurs after the contract has been handled; l) displacement in order to complete Activities for the construction of infrastructure and rehabilitation and reconstruction by the Directorate General of Budget, and/or; n) changes/correction due to administrative error in the form of correction to fund source, correction to the attachment of volume, type and unit of Output at RKA-KL and BIAL in accordance with the Government Work Plan (GWP) document or result of DPR-RI (Indonesian Legislative Assembly) agreement, correction to the code and nomenclature of work unit, correction to the out- The Indonesian Budget Overview

144 put formulation, and correction to formulation other than output formulation. In some cases, budget revision shall first subject to approval from the Minister of Finance, namely in the case of: a) displacement of inter-activities in one Program as long as such displacement constitutes an Optimal Result; and/or b) budget reallocation in the framework of emergency response. On the other side, some revision substances shall be first subject to approval from the Indonesian Legislative Assembly after the Law concerning National Budget of 2011 has been stipulated: a) new addition to Overseas Project Loan/Domestic Loan after the Law concerning APBN (National Budget) of 2011 has been stipulated; b) displacement of inter-programs budget other than to fulfill operational needs; c) displacement of inter-activities budget which is not originally from any Optimal outcome; d) displacement of budget breakdown which results in changes of program outcome; e) the use of budget that must first obtain approval from the Indonesian Legislative Assembly; f) liquidation of freeze/asterisk (*) attached by DPR-RI including liquidation of freezes which are not in accordance with allotment/utilization plan, and/or g) displacement of budget breakdown used for Programs/Activities which are not in accordance with the outcome of agreement between the Government and the Indonesian Legislative Assembly (conclusion from the meeting in framework of National Budget). As an addition to the illustration on submission of Indonesian Legislative Assembly s approval, it can be illustrated from the sample in the Ministry of Public 140 Chapter III Current Issue

145 Work that had submitted a revision proposal to the Directorate General of Budget, dated 8 th February 2011 Number KU DC/53 related to the displacement of Activity which are exclusive of operational Activity at the inter-province work units. Upon such proposal, a letter had been submitted by the Minister of Finance to the Chairman of DPR (Indonesian Legislative Assembly) dated 7 March 2011 under No. S-107/MK.02/2011, and upon such letter the Chairman of DPR-RI gave His approval on 28 th September Issues in the Implementation of Budget Revision For the year of 2011 there are some specifications on the existing budget revision which is regularly performed, submitted by the Ministry/Agency as required, such as liquidation of freeze, displacement of inter-activities from the optimal result (remainder of auction) and budget revision as a consequence of policy on economization and utilization of economization as well as budget revision as a consequence of APBN-P. The budget revision submitted by the Ministry/Agency to the Directorate General of Budget amounts sufficiently significant. In the budget year of 2009, the number of revision submitted was 1248, in the budget year of 2010 was and in the budget year of 2011 was 1228 proposals. For more detail, frequency of budget revision from 2009 at the Directorate General of Budget can be illustrated as follows: The Indonesian Budget Overview

146 Year Directorate of Budget I Directorate of Budget II Directorate of Budget III Average = = 3,02 = (APBN-P) 52 (APBN-P) Average = Average = = (APBN-P) (APBN-P) (APBN-P) Average= = 2,74=3 Average= =1,6= Average= =0,9= (APBN-P) (APBN-P) 278 (APBN-P) Average= 607 = 2,1=2 Average= 343 =1,5=2 Average=278 =0,8= Average revision completed in a day Based on the above data, it shows that the volume of the budget revision (RKAKL) conducted by the Directorate General of Budget during tends to be stable and there is no volume reduction shown. This indicates that improvement is required in the process of planning conducted by each Ministry/Agency. Some materials of revisions submitted by the State Ministries/Agencies to the Directorate General of Budget, among others, cover: 1. Launching and acceleration of OGL (Overseas Grant and Loan); 2. Deficiency of employees expenditure; 3. Revision on non-operational inter-provinces expenditures; 4. Revision of Inter-Activities from an optimal result; 142 Chapter III Current Issue

147 5. Opening of freeze sign; 6. Correction to output in Activity; 7. Correction to the funding source; 8. Revision from BP SGT (Budgetary Part of State General Treasury) to the Budgetary Part of State Ministries/Agencies; and other revisions. In the case, substantially the revision proposal of the Ministry/Agency is related to the authority of DPR RI, then such proposal shall be asked for approval by the Directorate General of Budget to the DPR RI. In broad outline, there are still some obstacles in the implementation of budget revision completion, among others: 1. Submission of revision by the State Ministries/Agencies shall not be all at once accompanied by the supporting data of revision. There are some possibilities to such issue, namely uncertainties of M/A (Ministry/Agency) in its proposal, however on the other side due to the existence of provision concerning less standardized supporting data in the revision, that the new supporting data shall be provided by M/A in the course of study. 2. Any supporting document requiring an approval from the related institution has frequently delayed in its submission, so that the completion of revision proposal takes a long time. 3. Budget revision is frequently faced on the needs that have not been planned in advance, so in some cases, problems frequently occur towards the urgency level of the revision materials, both from the sides of legality and its expediency. 5. Provision of the Secretary General/Prime Secretary / Secretary /Officials of Echelon I of the State Ministry/Agency as PBU (Proxy of Budget User) in sub- The Indonesian Budget Overview

148 mitting any budget revision proposal, in its implementation for State Ministries/Agencies with Work Units in multitude amount and spread in the regions face a time-consuming process in order to obtain approval of revision from Echelon-I official in the relevant State Ministries/Agencies. Conclusion As an instrument in national economy development, budget revision indeed holds a strategic role, consequently it is expected that the parties associated with budget revision shall have the same perception, particularly in maximizing the function of budget revision as an instrument to improve the quality of spending which eventually leads up to the national economy quality improvement. Therefore, revision is not only meant to achieve the interest of State Ministries/Agencies, but also to encourage the national priority achievement. There are some issues which are urged to implement in relation with budget revision: 1) The need to continuously complete the method/mechanism and business process of budget revision that leads to the improvement of State expenditure quality; 2) The need to improve the quality of proposal and readiness of State Ministries/Agencies in relation with legal foundation and the supporting data towards a budget revision submitted; 3) budget revision completion service shall continuously need to be improved in accordance with the prevailing provision. With such efforts, budget revision can be actually an effective instrument in supporting The National Budget function in the future, by sharpening the accuracy of budget planning of State Ministries/Agencies and in a wider range, it becomes the booster to improve the quality and growth of national economy. 144 Chapter III Current Issue

149 CHAPTER 3 DISPLACEMENT OF BUDGET DISPLACEMENT OF BUDGET FROM THE BUDGETARY PART OF STATE GENERAL TREASURY (BP SGT ) TO THE BUDGETARY PART OF STATE MINISTRY/ AGENCY (BP M/A) In the framework of transparency and accountability of budget, in the budget year of 2011 a new policy has been issued in connection with budget revision, namely the displacement of budget from the Budgetary Part of State General Treasury (BP SGT ) to the Budgetary Part of State Ministry/Agency (BP M/A). Such Authority for revision shall be delegated by the Indonesian Legislative Assembly (DPR RI) to the Government. Upon the stipulation of APBN-P 2011, the Indonesian Legislative Assembly and the Government have agreed with the allocation of BP SGT to BP M/A in the amount of IDR billion. The displacement of budget from BP SGT to BP M/A was also recommended by the Inspectorate General of Financial Ministry under a letter No. S-222/IJ/2011 dated 6 th July This recommendation was formed from the result of audit taken in 2011, since in the said audit, the Inspectorate General still found any budgetary allocation in BP , which did not conform with its classification / nature of account. This said matter takes place in every year and always becomes the findings of the Audit Controlling Agency (Badan Pemeriksa Keuangan) The Indonesian Budget Overview

150 influencing the audit report opinion. To anticipate any potential problems that can influence the opinion of LK BA for the budget year of 2011, the Inspectorate General proposed that any budget displacement can be considered to be implemented from BP SGT to BP M/AL or any displacement among the types of expenditures in APBN-P of Several important things to be considered in performing any displacement of budget from BP SGT to BP M/A are as follows: a. The budget displaced constitutes the additional budget in the current budget year, however it is not considered as the baseline in the subsequent budget year. b. The budget that had been displaced can not be re-revised without approval from the Minister of Finance. c. The budget that had been displaced shall be classified into a separate output and coded with budget item which has conformed with the standard account chart. d. Revision shall be conducted by the Director General of Budget through a stipulation of Allocation Letter of Budgetary Part (SABA ). The legal foundations for the revision of budget displacement from BP SGT to BP M/A are as follows: a. Article 22, par (1) letter a, point 1 of the Law No. 10 of 2010 concerning National Budget for the Budget Year of 2011 ; b. Article 10, par (1) letter a of The Law No. 2 of 2010 concerning the Amendment to the Law No. 47 of 2009 concerning National Budget of 2010 (the Law on APBNP 2010). Furthermore its implementation regulations are as follows: c. The Financial Minister s Regulation No. 49/PMK.02/2011 concerning Proce- 146 Chapter III Current Issue

151 dure of Budget Revision in the Budget Year of 2010; d. The Financial Minister s Regulation No. 187/PMK.02/2010 concerning Procedure for Displacement of Budget from BP SGT (Budgetary Part of State General Treasury) of other Expenditure Organizer to the Budgetary Part of State Minister/Agency in the Budget Year of 2010; e. Decree of the Directorate General of Budget No. PER-04/AG/2010 concerning Technical Guidance for Procedure to Displace Budget from BP SGT of Other Expenditure Organizers to the Budgetary Part of State Minister/Agency in the Budget Year of The Indonesian Budget Overview

152 148 Chapter III Current Issue

153 CHAPTER 3 IMPLEMENTATION OF REWARD AND PUNISHMENT Implementation of Reward and Punishment In the Budgetary Fiscal Year of 2011 As we all know that the Minister of Finance has issued the Regulation of the Minister of Finance (RMF) Number 38/PMK.02/2011 on Procedure of Using the Results of the State Ministries / Agencies Optimized Budget for the Budgetary Fiscal Year of 2010 in the Fiscal Year of 2011 and Deduction of the State Ministries / Agencies Expenditure Ceiling of the Fiscal Year of 2011 Not Fully Implementing in the Budget of 2011, in the first quarter of 2011, exactly on 2 nd March At a glance, it has reminded us that the implementation of the granting of rewards in 2011 was initiated by the provisions of Article 16A of the Law No. 2 of 2010 on the Revised National State (APBN-P) of Meanwhile, the implementation of inflicting any punishments in 2011 is the elaboration of the provisions of Article 20 of the Law Number 10 of 2010 on National Budget (APBN) of the Fiscal Year of 2011, in which such article declares the existence of the mechanism of deduction for the expenditures ceiling of the Ministries / Agencies in the Budgetary Fiscal Year of 2011 not fully implementing the budget of 2010 regulated by the Government. As the follow-up of the issuance of such Ministerial Regulation, then it has come into force the Regulation of the Director General of Budgeting Number The Indonesian Budget Overview

154 PER-2/AG/2011 on Technical Guidance on Appraisal for Granting of Reward and Inflicting of Punishment for the Budgetary Fiscal Year of 2011 dated 28 th March This Regulation consists of 8 articles describing in more detail in respect of some substances as contained in RMF (Regulation of Minister of Finance) Number 38/PMK.02/2011 among other those relating to the definition of the Direktorat Jenderal Anggaran K/L Direktorat Anggaran 1, 2, dan 3 Direktorat Sistem Penganggaran Direktur Jenderal Anggaran Laporan Realisasi Anggaran Belanja Per Eselon I Per Program beserta Data Pendukung a Mengecek dan memvalidasi data b Database DJA m Ke MK Konfirmasi ke K/L h g Mengecek dan meneliti kesesuaian antara penjelasan yg disampaikan dengan dokumen pendukung Reward/ punishment c daftar rekapitulasi K/L per Eselon I per Program f d 1. Hasil Optimalisasi 2. SAYDD 3. SAYTDD e Penghitungan HO SAYTD i l Menyusun Draft KMK beserta Lampiran k Daftar K/L yang mendapat reward/ Punishment Memparaf draft KMK beserta Lampirannya j Menetapkan K/L yg mendapatkan reward/ punishment result of optimized budget for the Fiscal Year of 2010, used for the calculation, including the unused budget criteria of the Fiscal Year of 2010 not representing the result of optimized budget. Besides, in this Regulation of Director General, the provision concerning the maximum limit of the deduction of the budget limit of the National Budget of 2011 namely an unabsorbed amount as resulted from the implementation of activity package not complying with the criteria which can be financed by the budget of 2010; the process of procurement was conducted not complying with the provisions of the government to provide the goods and service, delay of appointment to the head of work unit and / or 150 Chapter III Current Issue

155 activity performer; budget allocation being blocked by the Directorate General of Budgeting as the result of failure to provide TOR/RAB and other related and supporting documents or due to the negligence of the Proxy of Budget User/ Activity Performer in the implementation of budget for the Fiscal Year of The deduction of the budget ceiling for the Fiscal Year of 2011 as mentioned above is not inclusive of the unused and unabsorbed budget until the end of fiscal year 2010 originating from the implementation of operational activity namely ex-activity 0001 and 0002 activities and the implementation of activity packages of which fund is sourced from Overseas Loan/Grant, Domestic Loan/ Grant; Non-Taxable State Revenue, and Accompanying Pure Rupiah, selfmanaging activity; budgetary allocation of which use shall be subject to DPR-RI approval; budgetary allocation being blocked by DPR-RI (Indonesian Legislative Assembly) and/or blocked by the Directorate General of Budget, other than due to the reason of unfulfilling the TOR/RAB documents and the related supporting documents; the events of force majeure such as Natural Disaster (the Act of God), unrest condition leading toward social conflict and the weather. With respect to the mechanism of report preparation; the implementation of appraisal on the realization report on the implementation of budget in the fiscal year of 2010 conducted by the Directorate of Budget I, the Directorate of Budget II and the Directorate of Budget III up to the recapitulation of the result of evaluation to be stipulated under the Decision of the Minister of Finance can be illustrated at the following chart : The Indonesian Budget Overview

156 After being conducted for data collecting and validation process and calculation of the result of optimization, from all 77 Ministries/Agencies there are 61 Ministries/ Agencies getting the rewards that they are able to use the optimization result of the budget of 2010 in the Fiscal Year of 2011 and only 3 Ministries/Agencies getting punishment that they are liable to the deduction of their budget ceiling in the Fiscal Year of NO CODE AND STATE MINISTRIES/AGENCIES AMOUNT OF USABLE OPTIMIZATION RESULT PEOPLE'S CONSULTATIVE ASSEMBLY 1,801, INDONESIAN PARLIAMENT 1,170, FINANCIAL AUDITING AGENCY 13,394, SUPREME COURT 1,063, ATTORNEY GENERAL 1,163, STATE SECRETARIAT 1,796, MINISTRY OF HOME AFFAIRS 1,258, MINISTRY OF FOREIGN AFFAIRS 261, MINISTRY OF FINANCE 19,458, MINISTRY OF AGRICULTURE 269, MINISTRY OF INDUSTRY 5,450, MINISTRY OF ENERGY AND MINERAL RESOURCES 24,422, MINISTRY OF TRANSPORTATION 42,313, MINISTRY OF NATIONAL EDUCATION 867, MINISTRY OF HEALTH 20,825, MINISTRY OF RELIGIOUS AFFAIRS 3,808, MINISTRY OF MANPOWER AND TRANSMIGRATION 7,549, MINISTRY OF SOCIAL AFFAIRS 990, MINISTRY OF FORESTRY 1,553, MINISTRY OF MARINE AND FISHERIES 782, MINISTRY OF PUBLIC WORKS 93,157, COORDINATING MINISTRY FOR PEOPLE WELFARE 1,325, MINISTRY OF CULTURE AND TOURISM 4,746, MINISTRY OF STATE OWNED ENTERPRISES 3,554, MINISTRY OF COOPERATIVE, MEDIUM AND SMALL ENTREPRENEURS 2,011, MINISTRY OF PAN AND BUREAUCRACY REFORMATION 470, STATE INTELLIGENCE AGENCY 59, PASSWORD STATE AGENCY 583, NATIONAL SECURITY COUNCIL 41, CENTRAL BUREAU OF STATISTICS 2,662, MINISTRY OF NATIONAL DEVELOPMENT PLANNING 3,068, Chapter III Current Issue

157 In determining the Ministries/Agencies who are able to use the optimization result (reward) or those being charged or liable to the deduction of their budget ceiling of the Fiscal Year (punishment) in accordance with the provisions of the law number 10 of 2010 on APBN (National Budget) of Fiscal Year 2011 then the Decision of the Minister of Finance (KMK) on Stipulation of the Ministries/ Institution that are Unable to Use the Optimization Result of the Budget of 2010 in the Fiscal Year of 2011 and those being liable to the deduction of their budget ceiling of 2010 in the Fiscal Year of 2011 has been prepared. The drafting of such Decision of the Minister of Finance has been conducted through an intensive discussion by involving the related units within the circle of the Directorate General of Budget and the Legal Bureau of the Secretariat General of the Ministry of Finance. Principally, the matters regulated in this KMK are as follows; a. Stipulation of the Ministries/Agencies which can use the optimization result (Reward) of Fiscal Year 2010 in the Fiscal year of 2011 ; b. Stipulation of the Ministries / Agencies being liable to (or charged by) the deduction of their expenditure ceiling in the Fiscal Year of 2011; c. The form of reward awarded is the supplementary budget allocation in the Fiscal Year of 2011; d. The mechanism of adjusting the Work and Budget Plan (WBP) of the Work Unit and DIPA of the Work Unit getting the rewards or being liable to punishment. Some considerations that must be paid into attention are that the granting of reward to any Ministries / Agencies represents a signal from the Government to their performance as having used their budget more efficiently. The condition of National Budget in the Fiscal year of 2011 at this time still has a quite limited moving room, where if the rewards given to the number of the Ministries/ Agencies are equal to the result of the appraisal [100% of the total rewards] The Indonesian Budget Overview

158 then an additional budget must be provided in this National Budget of 2011 amounting to IDR.2,995T. Realization of the budget absorbed by the Ministries/ Agencies for the Fiscal Year of 2010 is 90.5% in average, thus the additional budget given must be assured to be able to be well absorbed. And of course by following the applicable provisions that in granting such rewards to any Ministries/Agencies and by consistently paying attention to the capability of the State finance. By referring to some considerations as mentioned above, relating to the amount of reward which will be given to some Ministries / Agencies then an option was proposed namely to the amount of 10% of the total optimization budget and the supplementary or additional budget required amounted to IDR. 295,5 billion. The followings is the list of the Ministries/Agencies which can use the result of optimized budget of 2010 in the Fiscal Year of NO CODE AND STATE MINISTRIES /AGENCIES AMOUNT OF USABLE OBTIMIZATION RESULT NATIONAL LAND AGENCY 303, MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY 116, STATE POLICE OF THE REPUBLIC OF INDONESIA 11,009, NATIONAL SECURITY AGENCY 26, INVESTMENT COORDINATING BOARD 108, NATIONAL NARCOTIC AGENCY 206, MINISTRY OF BACKWARD 3,864, NATIONAL COMMISSION ON HUMAN RIGHTS 217, METEOROLOGICAL, CLIMATOLOGICAL AND GEOPHYSICAL AGENCY 5, CONSTITUTIONAL COURT OF THE REPUBLIC OF INDONESIA 296, INTRAC 385, INDONESIAN INSTITUTE OF SCIENCES 66, BPPT 463, NATIONAL MAPPING & SURVEYS COORDINATING BOARD 241, NATIONAL STANDARDIZATION AGENCY 192, STATE ADMINISTRATIVE AGENCY 466, NATIONAL ARCHIVES OF THE REPUBLIC OF INDONESIA 133, STATE PERSONNEL AGENCY 242, FINANCIAL CONTROL AND DEVELOPMENT AGENCY 99, Chapter III Current Issue

159 NATIONAL MAPPING & SURVEYS COORDINATING BOARD 241, NATIONAL STANDARDIZATION AGENCY 192, STATE ADMINISTRATIVE AGENCY 466, NATIONAL ARCHIVES OF THE REPUBLIC OF INDONESIA 133, STATE PERSONNEL AGENCY 242, FINANCIAL CONTROL AND DEVELOPMENT AGENCY 99, MINISTRY OF TRADE 556, MINISTRY OF COMMUNAL HOUSING 4,353, CORRUPTION ERADICATION COMMISSION 893, REGIONAL REPRESENTATIVES COUNCIL (DPD) 2,801, JUDICIAL COMMISSION OF RI 19, NATIONAL DISASTER MANAGEMENT AGENCY 1,140, NATIONAL AGENCY FOR PLACEMENT AND PROTECTION OF INDONESIA LABORS 2,877, SIDOARJO MUD HANDLING AGENCY (BPLS) 47, LKPP 1,805, NATIONAL SAR AGENCY 399, BUSINESS COMPETITION CONTROLLING COMMISSION 300,344 TOTAL 295,525,269 The Fiscal Year of 2011 represents the first fiscal applying the reward and The Fiscal Year of 2011 represents the first fiscal applying the reward and punishment system to all expenditure budgets as a new procedure for the punishment system to all expenditure budgets as a new procedure for the Ministries/Agencies and it is more than as the learning methods The budget Ministries/Agencies and it is more than as the learning methods The budget limit/ceiling in the Fiscal Year of 2011 is bound by the national development performance target that by the deduction of the expenditure ceiling/ limit will not spoil the achievement of the planned targets. By referring to such considerations in connection with the deduction of the expenditure limit of the Ministries/ Institution in 2011 (Punishment) then it is chosen an option of 10% of the total inefficiency amount of the deducted expenditure limit amounting to IDR.34 billion applied in the Fiscal Year of The State Ministries/Agencies being exposed to the deduction of expenditure limit in the Fiscal Year are as follows: The Indonesian Budget Overview

160 NO STATE MINISTRIES / AGENCIES AMOUNT OF DEDUCTION OF BUDGET CEILING MINISTRY OF JUSTICE AND HUMAN RIGHTS 897, THE COORDINATING MINISTRY OF POLITICAL AFFAIRS 159, NATIONAL LIBRARY OF THE REPUBLIC OF INDONESIA 584,028 TOTAL 1,641,170 Subject to the provisions of Article 16A of Law No. 2 of 2010 on State Budget Revision of 2010 Fiscal Year, the granting of reward is financed by the last remaining (unused) budget of the Fiscal Year of 2010 originating from unused optimization results the By the implementation of this reward and punishment system, it is expected to be capable of realizing the spirit of the Government to connect between the achievement result of budgeting implementation and the budget amount allocated in the subsequent year, thus later, the Ministries/Agencies can enhance their performance better and better both from the achievement quantity and quality point of view. Monitoring and Evaluation of Budgeting is badly required to enhance the budgeting plan quality (to improve the quality of planning) leading to the credible, transparent and accountable budgeting, the Directorate General of Budget is preparing the mechanism of evaluation of the performance based on Article 19 and Article 20 of the Government Regulation Number 90 of 2010 on Preparation of Budgeting Plan of the Ministries /Institution. It is greatly hoped that later the result of this budget monitoring and evaluation can be used as the reference or consideration in formulating the Government policy in increasing the expenditure efficiency (operational efficiency) and stipulating the budget limit allocation of the Ministries/Agencies for the following year. 156 Chapter III Current Issue

161 CHAPTER IV Management Of Non Taxable State Revenue The Indonesian Budget Overview

162 158 The Indonesian Budget Overview 2011

163 CHAPTER 4 MANAGEMENT OF NON TAXABLE STATE REVENUE REVISION OF LAW NUMBER 20 OF 1997: ROAD TO AN ACCOUNTABLE AND CREDIBLE MANAGEMENT OF NON TAXABLE STATE REVENUE (NTSR) The development in the legal, social, economic and political fields during the last fourteen years after 1998 reformation has forced the management of the Non Taxable State Revenue (NTSR) to have itself renovated and adjusted to various communal dynamics. The Law number 20 of 1007 on Non-Taxable State Revenue as the spirit in its management seems to have been criticized from the philosophical, juridical and sociological aspects by the stakeholders of this NTSR. The revision of Law Number 20 on NTSR represents an entry gate and all at once as a constitutional instrument to answer all these challenges. Looking at the past, the Law Number 20 of 1997 on NTSR was enacted at the condition of Indonesian economic requiring other financing source other than any taxation revenue. At that time, the potency of the revenue other than taxation which was the most promising and possessing a sufficiently high potency was the revenue from non taxable items. The existing problem at that time was inexistence of regulations as the basis for organizing and collecting these non-taxable state revenue. This vacuum condition of regulations has resulted in a moral hazard at the government s authorities (State Ministries / Agencies) performing the The Indonesian Budget Overview

164 collection of these non-taxable revenues. Its forms among other are unreported and unpaid non-taxable state revenue to the State Treasury The issuance of Law Number 20 of 1997 on NTSR has become a tool for orderliness and law enforcement in the management of NTSR. This Law Number 20 of 1997 on NTSR regulates the concept of inflicting a firm punishment against the breaches conducted by any tax payers and the manager of NTSR itself at any State Ministry/ Institution. The punishment provided for in the Law Number 20 of 1877 on NTSR consists of administrative and criminal punishments in the form of fine and imprisonment. The concept of punishment applied to this management of NTSR has been obviously giving a significant effect to the orderliness and obedience of the Ministries/Agencies concerned in the management of NTSR (Non-Taxable State Revenue). The law enforcement in the management of NTSR as supported by the Law Number 20 of 1977 on NTSR at that time has caused a resistance from the Ministries / Agencies attempting to defense the old pattern in which there was moral hazard. The compromise model offered by the Law No. 20 of 1077 on NTSR to reduce this resistance from the Ministries/Agencies uses the earmarked concept where any Ministries / Agencies may use a part of his NTSR s funds collected from tax payers. This earmarked concept has been well accepted by the Ministries/Agencies, which is indicated by their report on various kinds of levies on the NTSR available at the Ministries / Agencies concerned. The establishment of the Law No. 20 of 1977 on NTSR regulating the punishment and earmarked concept has been apparently capable of increasing significantly the realization of NTSR. It can be seen from the data of NTSR realization in the Fiscal Year of 1886/1997 from IDR Trillion increasing to IDR Trillion in the Fiscal Year of 1997/1998. The increase in NTSR has kept continuing that in 160 Chapter IV Management Of Non Taxable State Revenue

165 the Fiscal Year of 1988/1989, the non-taxable state revenue reached to IDR Trillion and in the Fiscal Year of 1999/2000 it was capable to reach to IDR Trillion. However, the condition encircling the birth of this Law No. 20 of 1977 on NTSR (Non-Taxable State Revenue), fourteen years ago, has been far different from the current condition, particularly after reformation of In the field of state finance, the wave of reformation was marked by the Indische Compabiliteitswet (ICW) superseded by the Law Number 17 of 2003 on State Finance. Then it was followed by the birth of Law No. 1 of 2004 on State Treasury and Law No. 15 of 2004 on Examination of the Management and Accountability of the State Finance. The package of Laws of the field of such State Finance has caused a fundamental change in the state finance management system. This fundamental changes provided for in the Law Number 17 of 2003 on State Finance, among others, are the scope of state finance including the source and scope of the state revenue; verification of power and authority of the Ministry/Head of Agencies emphasizing the concept of depositing, recording, management, reporting and accountability which must be managed professionally, accountably, credibly and transparently. The changes of this fundamental concept in the field of state finance management represents one of the messages of law that must be also performed in the management of non-taxable state revenues in the future. Meanwhile, if seen from the year of its approval, the Law No. 20 of 1977 on NTSR represents a sufficiently-aged law compared to the other laws in the field of state revenue. As an example, law on customs is regulated by the Law Number 17 of 2006 and law on general provisions and taxation procedure is regulated by the Law Number 28 of It indicates that the two younger laws are faster in responding the development of the community by making correction to the The Indonesian Budget Overview

166 older and obsolete concept and replaced by more adaptive concept to adhere to the development and dynamics of the community. In the management of NTSR at this time, there are some principal substances to be adjusted and adapted into the revision concept of the Law Number 20 of 1977 on NTSR. Such substances among other are the adjustment and confirmation of the concepts respecting the scope of NTSR including definition and groups of NTSR, the authorities of the Minister of Finance and State Ministries / Heads of Agencies; concept of stipulation on the type and tariff, concepts of depositing, collecting and billing, examination, drawing back, objection and relief in tax payment, usage (earmarked) ; fostering and supervising, reporting and accountability and imposing administrative and criminal punishment. Such principal substances must be jointly reviewed namely between the minister of finance and NTSR stakeholders in order to find the form of the best concept for the forthcoming management of NTSR. As an example, in the Law Number 20 of 1977, NTSR is defined residually as the basket of garbage and very flexible namely that NTSR is all revenues of the Central Government not deriving from the taxation revenues. This definition of NTSR can be revised by entering the group of NTSR into it, namely all revenues coming from the use of natural resources (SDA), management of the state properties or assets, and those from the services carried out by the state. The authority of the Minister of Finance and State Ministers / Head of Agencies in the field of NTSR management also becomes a principal issue in the revision of Law Number 20 of In this Law Number 20 of 1977, the Minister of Finance is provided by a delegating authority to appoint any governmental institutions to collect and or pick up any payable NTSR. Meanwhile, in Law Number 17 of 2003, the State Ministers/ Heads of Agencies shall preserve attributive authorities 162 Chapter IV Management Of Non Taxable State Revenue

167 namely to perform the collection of NTSR and to deposit it to the state treasury. We can see that the current management of NTSR needs a broader and firm authority of the Minister of Finance or State Ministers / Heads of Agencies to resolve various existing problems compared to those currently possessed. Any conflict arising between the Minister of Finance and any Ministers / Heads of Agencies or inter Ministers/Heads of Agencies in connection with the management of this NTSR, such stipulation on the type and tariff of NTSR and the use of NTSR also represent a principal issue that must be contained into the revision of the Law Number 20 of Some lawyers give recommendation that the conflict of authority can be settled by returning it to the authority of the President or to give an attributive authority to the Minister or those of the same level to settle such authority conflict. Another problem often argued in reviewing the revision of the Law Number 20 of 1997 on NTSR is the usage of NTSR (earmarked). A number of financial experts regard that the earmarked concept is inefficient and administratively complicated, while the other ones say that such concept is the answer for the weaknesses of the general budgeting which is not focus in allocating funds especially to the units performing public services. This time, the revision of Law Number 20 of 1997 on NTSR has entered the National Legislation Program (Prolegnas) of DPR RI (Indonesian Legislative Assembly) of where the Government (the Ministry of Finance) acting as the initiator. The existing problems in the management of NTSR become the subject matters to be reviewed in the Ministry of Finance (Directorate General of Budget) acting as the unit coordinating the drafting of the academic concept and the draft of RUU (Law Plan) of the revision of Law No. 20 of 1977 on NTSR. The Ministry of Finance at this time is making a review using various The Indonesian Budget Overview

168 initial approaches. The initial approaches currently made among others are : 1. To identify the provisions in the Laws of NTSR required to be revised. 2. To identify the provisions in the Laws of NTSR connected to the Laws Package of State Finance; 3. To identify the provisions in the relevant Laws of Taxation and Customs & Excises as the comparison for the Law of NTSR; 4. To identify the provisions of NTSR in the Regional Laws; 5. To perform a study on literatures between the related benchmarking managements of NTSR in other countries ; 6. To distribute questioners to collect the inputs from the stakeholders in connection with the undertaking and management of NTSR at any State Ministries / Agencies; 7. To conduct focus group discussions. Basically, the major challenge, in the field of State Finance, especially management of NTSR, represents the challenge to the Ministry of Finance (the Directorate General of Budget) to be able to realize the good governance. Therefore, the revision of Law Number 20 of 1977 on NTSR represents an entry gate well as a constitutional instrument to answer such challenge *** and as 164 Chapter IV Management Of Non Taxable State Revenue

169 Attachment The Indonesian Budget Overview

170

171 BREAKDOWN OF THE BUDGET OF MINISTRIES AND AGENCIES IN 2011 ACCORDING TO THE FUNCTION, SUB-FUNCTION AND TYPE OF FUNCTION AND SUB-FUNCTION PERSONNEL GOODS CAPITAL SOCIAL AIDS EXPENDI- TURE (in thousand rupiah) 01 PUBLIC SERVICE 48,008,874,107 45,397,525,621 17,353,566, ,859,397,571 TOTAL EXECUTIVE AND LEGISLATIVE AGENCY, FINANCIAL AND FISCAL MATTERS, AND FOREIGN AFFAIRS 41,957,801,053 34,028,351,255 12,586,537, ,301,072 89,432,990, PUBLIC SERVICE 4,534,234,371 5,656,838,535 2,019,535,055 59,012,100 12,269,620, PRIMARY RESEARCH AND DEVELOPMENT ON TECH- NOLOGY AND SCIENCE 581,615,923 1,367,303, ,877,650-2,888,796, GOVERNMENT LOAN 19,701,481 57,723,333 8,003,175-85,427, REGIONAL DEVELOPMENT 67,898,112 1,275,253,109 67,584, ,133,536 2,195,869, RESEARCH AND DEVELOPMENT ON PUBLIC SERVICE 12,899, ,539,346 13,331, ,770, OTHER PUBLIC SERVICES 834,724,063 2,821,517,004 1,718,697, ,984,626 5,769,923, DEFENSE 22,589,762,973 10,186,986,340 14,641,943,087-47,418,692, NATIONAL DEFENSE 22,566,680,207 8,457,131,927 12,081,397,125-43,105,209, DEFENSE SUPORTS 22,911,766 1,624,825,647 2,556,850,402-4,204,587, RESEARCH AND DEVELOPMENT ON DEFENSE 171, ,028,766 3,695, ,895, ORDERLINESS AND SECURITY 4,081,343,975 9,850,593,848 8,094,680,609 40,000,000 22,066,618, POLICE - 6,056,790,122 4,469,571,841-10,526,361, DISASTER HANDLING (COPING WITH DISASTER) 18,289, ,106, ,313,546 40,000, ,710,000 The Indonesian Budget Overview

172 FUNCTION AND SUB-FUNCTION PERSONNEL GOODS CAPITAL SOCIAL AIDS EXPENDI- TURE TOTAL LEGAL GUIDING 2,167,200 1,124,437,081 1,326,485,188-2,453,089, JUDICIARY 3,935,453, ,251,397 1,286,595,235-6,110,300, RESEARCH AND DEVELOPMENT ON ORDERLINESS AND SECURITY - 10,029,225 13,014,158-23,043, OTHER ORDERLINESS AND SECURITY 125,433,635 1,157,979, ,700,641-2,141,113, ECONOMICS 2,688,704,600 24,541,544,762 67,530,990, ,754,129, TRADING, BUSINESS DEVELOPMENT, COOPERATIVES AND SMALL & MIDDLE-SCALE BUSINSSES 123,841,169 1,475,192, ,554, ,382,187 2,406,970, MANPOWER 123,133,483 1,262,652, ,959,668 18,388,525 1,610,134, AGRICULTURAL, FORESTRY, FISHERY AND MARINE SEC- TORS 460,000,514 7,396,521,074 1,232,056,301 15,920,644, IRRIGATION 196,878,473 1,703,993,707 10,240,063,718-12,140,935, FUEL AND ENERGY 46,963, ,564,892 9,931,987,121-10,866,515, MINING 79,238, ,299, ,128,618-1,303,666, INDUSTRY AND CONSTRUCTION 230,510,442 1,847,434, ,587,143-2,561,532, TRANSPORTATION 349,106,222 4,197,314,581 42,432,703,100-46,979,123, TELECOMMUNICATION - 1,850, ,850, RESEARCH AND DEVELOPMENT ON ECONOMICS 705,754,880 1,015,841, ,722,929 29,992,829 2,232,312, OTHER ECONOMY 373,277,515 3,919,879,433 1,437,226,662 59,000 5,730,442, ENVIRONMENT 557,366,125 5,911,985,731 4,599,228, ,100 11,069,557, Attachment

173 FUNCTION AND SUB-FUNCTION PERSONNEL GOODS CAPITAL SOCIAL AIDS EXPENDI- TURE WASTE MANAGEMENT 15,240, ,360,584 2,735,919,967-3,016,521, POLUTION HANDLING 4,162, ,724,533 42,423, ,309, NATURAL RESOURCE CONVERSION 480,814,968 2,631,591,258 1,415,410, ,100 4,528,793, LAYOUT AND LAND AFFAIRS 47,649,669 2,471,233, ,389,384-2,891,272, OTHER ENVIRONMENT 9,498, ,075,990 33,084, ,659, HOUSING AND PUBLIC FACILITIES 127,216,986 4,608,907,920 7,597,822,232 23,594,330, HOUSING DEVELOPMENT - 156,441,185 1,231,155, ,500,000 1,625,096, SETTLEMENT COMMUNITY ENFORCEMENT 15,119, ,631,985 1,495,389,698 3,379,793, PROVISION OF DRINKING WATER 19,244, ,423,114 2,399,563, ,569,500 3,092,800, HOUSING AND OTHER PUBLIC FACILITIES 92,853,033 3,325,411,636 2,471,714,187 15,496,640, HEALTH 457,469,569 5,340,520,943 1,553,866,938 13,649,389, MEDICINE AND MEDICAL SUPPLIES 160,833,472 1,321,777, ,219,552-1,786,830, INDIVIDUAL MEDICAL SERVICE 22,367, ,264, ,121,180 7,698,349, PUBLIC MEDICAL SERVICE - 661,716,136 95,040,857 98,936, ,693, POPULATION AND FAMILY PLANNING 183,183,435 2,133,918,613 96,047,952-2,413,150, MEDICAL RESEARCH AND DEVELOPMENT 41,799, ,623,241 35,620, ,043, OTHER MEDICAL MATTERS 49,284, ,221,184 40,817, ,323, TOURISM AND CULTURE 244,150,471 2,252,718, ,317,033 43,190,000 2,901,376, TOURISM AMD CULTURAL DEVELOPMENT 136,276, ,276, ,356,178 43,190,000 1,422,099,485 TOTAL The Indonesian Budget Overview

174 08.03 PUBLICATION AND BROADCASTING ESTABLISHMENT - 8,363,118 42,982-8,406, FUNCTION AND SUB-FUNCTION RESEARCH AND DEVELOPMENT ON TOURISM AND CUL- TURE PERSONNEL GOODS CAPITAL SOCIAL AIDS EXPENDI- TURE 17,115,783 50,130,485 3,703,732-70,950, BUILDING OF GOOD PERFORMANCE SPORTS - 965,470, ,470, OTHER TOURISM AND CULTURE 90,757, ,478,580 23,214, ,450, RELIGIOUS AFFAIRS 4,974, ,850, ,386, ,107,028 1,397,317, RELIGIOUS LIFE ENHANCEMENT 2,321, ,437,898 43,348, ,433, ,542, RELIGIOUS LIFE HARMONY - 38,315,310 8,793,345 18,175,465 65,284, RELIGIOUS RESEARCH AND DEVELOPMENT 2,652,654 70,670,948 4,080, ,000 78,104, OTHER RELIGIOUS SERVICES - 324,426, ,162,847 67,797, ,386, EDUCATION 21,024,285,540 27,542,701,145 13,636,849,528 91,483,006, EARLY-AGED CHILDREN EDUCATION - 103,334, ,466, ,800, PRIMARY EDUCATION 74,412,635 2,317,557, ,474,110 10,348,770, SECONDARY EDUCATION 67,921, ,928, ,970,465 3,928,971, NON-FORMAL AND INFORMAL EDUCATION 86,563,837 1,626,677, ,583,555 4,279,921, SERVICE EDUCATION 119,503, ,856,648 91,196, , ,478, HIGHER EDUCATION 7,001,080,364 15,359,307,867 10,973,529,876 35,211,511, AID SERVICES FOR EDUCATION 460,321,205 3,114,273, ,694,977 16,651,746, RELIGIOUS EDUCATION 592,430, ,809, ,875,262 3,183,880, EDUCATIONAL RESEARCH AND DEVELOPMENT 22,522, ,047,195 4,385, ,281,225 1,259,235,900 TOTAL 170 Attachment

175 FUNCTION AND SUB-FUNCTION PERSONNEL GOODS CAPITAL SOCIAL AIDS EXPENDI- TURE YOUTH AND SPORTS ESTABLISHMENT - 1,241,840, ,350,000-1,742,190, OTHER EDUCATION 12,599,530,029 1,215,068, ,789,344 32,112,863 13,988,500, SOCIAL PROTECTION 107,758,232 1,392,378, ,563,070 4,585,495,524 TOTAL SOCIAL SERVICE AND PROTECTION FOR PEOPLE WHO ARE ILL AND HAVING PHYSICAL DEFECT 53,501, ,545,446 8,820,711 88,908, ,776, SOCIAL SERVICE AND PROTECTION FOR OLD PEOPLE 3,222,471 33,304,859 1,441,500 63,145, ,114, SOCIAL SERVICE AND PROTECTION FOR CHILDREN AND FAMILY 16,502, ,003,217 3,652, ,695, ,853, WOMEN EMPOWERMENT 12,462, ,784,689 1,239, ,487, SOCIAL AID AND INSURANCE - 33,196,000-47,492,108 80,688, RESEARCH AND DEVELOPMENT ON SOCIAL PROTEC- TION 12,940, ,728, ,452, , ,241, OTHER SOCIAL PROTECTION 9,128, ,815, ,955,498 3,330,334,160 TOTAL 99,891,906, ,849,713, ,854,213, ,779,310,644 The Indonesian Budget Overview

176 BREAKDOWN OF THE BUDGET OF MINISTRIES / AGENCIES IN 2011 ACCORDING TO THE MINISTRIES / AGENCIES & TYPES OF BUDGET (in thousand rupiah) MINISTRIES / AGENCIES PERSONNEL GOODS CAPITAL SOCIAL AIDS TOTAL 001 PEOPLE S CONSULTATIVE COUNCIL 20,836, ,506,182 23,457, ,800, INDONESIAN LEGISLATIVE ASSEMBLY 612,535,894 1,547,625, ,436,607-3,025,597, FINANCIAL AUDITING BOARD 844,221,250 1,285,485, ,835,404-2,806,541, SUMPREME COURT 3,935,453, ,251,397 1,286,595,235-6,055,300, ATTORNEY GENERAL OF THE REPUBLIC OF INDONESIA 946,544,105 1,160,571, ,643,981-2,844,760, MINISTRY OF STATE SECRETARIAT 413,643,369 1,467,942, ,375,289 1,462,475 2,138,423, MINISTRIES OF INTRENAL AFFAIRS 302,184,885 4,432,955,046 1,765,093,485 8,254,561,864 14,754,795, MINISTRY OF FOREIGN AFFIARS 2,606,836,328 2,655,057, ,850,290-5,633,743, MINISTRY OF DEFENSE N 22,583,831,003 10,193,791,034 14,720,877,963-47,498,500, MINISTRY OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA 1,886,852,098 2,404,281, ,801,586-4,931,934, MINISTRY OF FINANCE 7,992,828,537 6,323,346,446 3,254,565,127-17,570,740, MINISTRY OF AGRICULTURE 1,028,887,843 6,690,521,799 1,422,774,954 7,582,217,104 16,724,401, MINISTRY OF INDUSTRY 305,840,007 1,755,947, ,325,965-2,240,113, MINISTRY OF ENERGY AND MINERAL RESOURCE 374,090,138 3,742,778,227 11,181,718,405-15,298,586, MINISTRY OF COMMUNICATION 1,377,453,699 3,925,977,376 16,808,286,048-22,111,717, Attachment

177 MINISTRIES / AGENCIES PERSONNEL GOODS CAPITAL SOCIAL AIDS TOTAL 023 MINISTRY OF NATIONAL EDUCATION 7,262,136,194 18,856,234,645 7,987,246,677 21,517,495,048 55,623,112, MINISTRY OF HEALTH 3,929,386,614 11,911,553,485 5,417,190,509 6,398,931,639 27,657,062, MINISTRY OF RELIGIOUS AFFAIRS 15,532,302,126 5,835,469,207 2,575,548,555 8,166,076,809 32,109,396, MINISTRY OF MANPOWER AND TRANSMIGRATION 273,198,006 2,941,644, ,255,226 32,188,525 4,128,286, MINISTRY OF SOCIAL AFFAIRS 197,842,360 1,450,757, ,656,645 2,284,320,640 4,100,577, MINISTRY OF FORESTRY 795,415,773 3,568,546,454 1,631,061,383 5,000,000 6,000,023, MINISTRY OF MARINE AND FISHERY AFFAIRS 445,140,778 2,991,698,096 1,076,204, ,207,100 4,911,250, MINISTRY OF PUBLIC WORK 1,245,545,890 8,536,212,994 45,304,623,424 2,874,321,348 57,960,703, THE COORDINATING MINISTRY OF POLITICS, LAW AND SECURITY 55,278, ,704, ,203, ,187, THE COORDINATING MINISTRY OF ECONOMIC AFFAIRS 43,104, ,740,794 36,554, ,400, THE COORDINATING MINISTRY OF PUBLIC WELFARE 16,571, ,388, ,290, ,250, MINISTRY OF CULTURE AND TOURISM 293,966,422 1,394,311, ,039,853 43,190,000 2,154,508, MINISTRY OF STATE-OWNED ENTERPRISES 20,209, ,402,792 7,174, ,787, MINISTRY OF RESEARCH AND TECHNOLOGY 27,394, ,403, ,950, ,749, MINISTRY OF ENVIRONMENTAL AFFAIRS 51,440, ,781,915 81,096, ,319, MINISTRY OF COOPERATIVES, AND SMALE AND MIDDLE-SCALE ENTREPRENEURS MINISTRY OF WOMEN EMPOWERMENT AND CHILDREN PRO- TECTION 54,411, ,437, ,425, ,382,187 1,013,657,773 12,462, ,180,489 1,451, ,094,160 The Indonesian Budget Overview

178 MINISTRIES / AGENCIES PERSONNEL GOODS CAPITAL SOCIAL AIDS TOTAL 048 MINISTYRY FOR MAKING EFFICIENT USE OF STATE APPARATUS AND BUREAUCRATIC REFORMATION 21,027, ,886,196 8,985, ,900, NATIONAL INTELLIGENCE AGENCY 70,154, ,832, ,062,358-1,133,050, STATE CODE AGENCY 42,325, ,806, ,867, ,000, NATIONAL DEFENSE ASSEMBLY 6,259,570 27,005,306 4,065,124-37,330, CENTRAL BUREAU OF STATISTICS 604,105,265 1,325,387, ,000,000-2,284,492, MINISTRY OF NATIONAL DEVELOMENT PLANNING 43,632, ,849,601 41,934, ,417, NATIONAL DEFENSE AGENCY 1,020,243,688 2,246,311, ,544,146-3,695,099, NATIONAL LIBRARY OF THE REPUBLIC OF INDONESIA 36,712, ,656,656 68,124, ,493, MINISTRY OF COMMUNICATION AND INFORMATI ON SYSTEMS 191,472,836 2,944,497, ,164,827 30,136,829 3,450,272, INDONESIAN NATIONAL POLICE 19,119,564,251 6,563,315,649 4,098,898,913-29,781,778, FOOD AND MEDICINE CONTROLLING AGENCY 157,608, ,950, ,240, ,800, NATIONAL DEFENSE INSTITUTION 23,341,562 93,361,845 71,001,593 2,645, ,350, INVESTMENT COORDINATING BOARD 37,719, ,973,744 19,091, ,784, NATIONAL NARCOTIC AGENCY 13,456, ,118, ,035, ,610, MINISTRY FOR BACKWARD DISTRICTS DEVELOPMENT 14,000, ,901,612 3,457, ,133,536 1,184,493, NATIONAL FAMILY PLANNING AND POPULATION AGENCY 183,183,435 2,133,918,613 96,047,952-2,413,150, NATIONAL COMMISSION FOR BASIC HUMAN RIGHTS 20,000,731 35,619,152 1,580,117-57,200, METEOROLOGICAL, CLIMATOLOGIC AND GEOPHYSICAL AGENCY 203,541, ,183, ,616,138-1,317,341, Attachment

179 MINISTRIES / AGENCIES PERSONNEL GOODS CAPITAL SOCIAL AIDS TOTAL 076 GENERAL ELECTION COMMISSION 338,945, ,405, ,519, ,870, CONSTITUTIONAL COURT OF THE REPUBLIC OF INDONESIA 12,107, ,290,076 73,302, ,700, FINANCIAL TRANSACTION ANALYSIS AND REPORTING CENTRE 27,276,000 54,617,241 16,006,759-97,900, INDONESIAN SCIENCE AGENCY 234,277, ,351,952 83,386, ,016, NATIONAL NUCLEAR POWER AGENCY 206,286, ,277, ,003, ,567, TECHNOLOGICAL APPLICATION AND STUDY AGENCY 159,364, ,558, ,380, ,303, NATIONAL INTERPLANETARY AND FLIGHT AGENCY 62,799, ,468, ,233, ,501, NATIONAL MAPPING AND SURVEY COORDINATING BOARD 33,644, ,014, ,541, ,200, NATIONAL STANDARDIZATION AGENCY 9,576,721 71,904,464 1,140,180-82,621, NUCLEAR POWER CONTROLLING AGENCY 22,148,909 46,539,783 8,079,769-76,768, STATE ADMINISTRATION INSTITUTION 39,382, ,126,323 61,620, ,128, INDONESIAN NATIONAL ARCHIVES 25,435,979 84,199,994 39,415, ,051, CIVIL SERVANT AGENCY 155,398, ,063, ,858, ,320, DEVELOPMENTAL AND FINANCIAL CONTROLLING BOARD 290,503, ,014,057 17,496, ,014, MINISTRY OF TRADE 231,150,644 1,251,210, ,462,390 2,180,600 2,136,004, MINISTRY OF PUBLIC HOUSING 27,118, ,427,380 2,105,443, ,500,000 2,759,490, MINISTRY OF YOUTH AND SPORTS 27,948,915 2,389,530, ,610,800-3,004,090,000 The Indonesian Budget Overview

180 MINISTRIES / AGENCIES PERSONNEL GOODS CAPITAL SOCIAL AIDS TOTAL 093 CORRUPTION ELIMINATING COMMISSION 251,842, ,119, ,732, ,695, REGIONAL / MUNICIPAL / PROVINCIAL LEGISLATIVE ASSEMBLY 168,293, ,914, ,991,860-1,154,200, JUDICIAL COMMISSION OF THE REPUBLIC OF INDONESIA I 7,461,758 68,232,418 4,005,824-79,700, NATIONAL AGENCY FOR COPING WITH DISASTERS 18,289, ,106, ,313,546 40,000, ,710, NATIONAL AGENCY FOR PLACING AND PROTECTING INDONE- SIAN LABORS / MANPOWER 30,158, ,687,761 19,023,701 4,130, ,000, NATIONAL AGENCY FOR COPING WITH SIDOARJO MUD (BPLS) 14,382,400 91,172, ,091, ,396,553 1,286,043, POLICY AGENCY FOR SUPPLYING GOVERNMENT SERVICES AND GOODS 10,991, ,435,486 86,170, ,597, NATIONAL SAR AGENCY 133,384, ,211, ,204,137-1,163,800, BUSINESS COMPETITION CONTROLLING COMMISSION 32,812,018 46,699, ,808, ,320, SURAMADU AREA DEVELOPING AGENCY 7,720,550 86,927, ,852, ,500, OMBUDSMAN OF THE REPUBLIC OF INDONESIA 7,038,229 8,754, ,615-16,312, NATIONAL AGENCY FOR BORDER MANAGEMENT 9,967, ,364, ,667, ,000,000 TOTAL 99,891,906, ,849,713, ,854,213,402 59,183,477, ,779,310, Attachment

181 BREAKDOWN OF THE BUDGET OF MINISTRIES /AGENCIES IN 2011 ACCORDING TO THE MINISTRIES / AGENCIES, PROGRAM & TYPE OF (in thousands rupiah) MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS EXPENDI- TURE TOTAL 001 PEOPLE S CONSULTATIVE COUNCIL (MPR) 20,836, ,506,182 23,457, ,800, The Supporting Program for Management and Implementation of Other Technical Duties of the People s Consultative Council 13,000,000 Infrastructure and Facility Improvement Program On Apparatus of The People s Consultative Council Implementation Program of MPR s Constitutional Roles and Its Auxiliary Apparatus 32,189,365 3,627,426-48,816,791-18,637,392 19,830,186-38,467,578 7,836, ,679, ,515, INDONESIAN LEGISLATIVE ASSEMBLY (DPR-RI) 612,535,894 1,547,625, ,436,607-3,025,597, The Supporting Program for Management and Implementation of Other Technical Duties of the Indonesian Legislative Assembly Infrastructure and Facility Improvement Program On Apparatus of The Indonesian Legislative Assembly - 115,584,129 4,444, ,029,000 77,039, ,350, ,991,736-1,273,382, Implementation Program on The Legislative Function of DPR-RI - 301,749, ,749, Implementation Program on The Budget Function of DPR-RI - 32,027, ,027, Implementation Program on The Controlling Function of DPR- RI - 195,071, ,071,817 The Indonesian Budget Overview

182 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Institutional Strengthening Program of DPR-RI 535,496, ,841, ,103,337, FINANCIAL AUDIT ING AGENCY (BPK) 844,221,250 1,285,485, ,835,404-2,806,541, The Supporting Program for Management and Implementation of BPK s other technical duties Infrastructure and Facility Improvement Program On Apparatus of The Financial Auditing Agency (BPK) Accountability Improvement and Surveillance Program On Apparatus of the Financial Auditing Agency Registration Program On National/District Losses, Legal Development and Services in the Field of State Financial Audit Improvement Program On Quality of Institution, Apparatus and State Financial Auditing 844,221, ,614,681 1,345,185-1,129,181, ,517, ,282, ,800,000-16,297, ,297,536-16,894,339 39,000-16,933,339-66,161, ,640-66,329, State Financial Auditing Program - 670,000, ,000, SUPREME COURT 3,935,453, ,251,397 1,286,595,235-6,055,300, The Supporting Program for Management and Implementation of Other Technical Duties of the Supreme Court Infrastructure and Facility Improvement Program on Apparatus of The Supreme Court 3,865,375, ,549, ,354,924, ,272,230,200-1,272,230, Case Settlement Program of the Supreme Court 38,814,391 50,030,809 1,203,400-90,048, Management Improvement Program On General Court 10,901, ,274,335 2,305, ,481, Attachment

183 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Management Improvement Program On Religious Courts 6,149,782 55,477,043 3,321,975-64,948, Management Improvement Program On Military Court 5,154,549 14,352, ,060-19,766, Education and Training Program On Apparatus of the Supreme Court 7,282,155 Accountability Surveillance and Improvement Program on Apparatus of The Supreme Court 1,775,433 65,282,345 6,035,500-78,600,000 22,284,567 1,240,000-25,300, ATTORNEY GENERAL OF THE REPUBLIC OF INDONESIA 946,544,105 1,160,571, ,643,981-2,844,760, The Supporting Program for Management and Implementation of Other Technical Duties of the Indonesian Attorney General Infrastructure and Facility Improvement Program On Apparatus of The Indonesian Attorney General Accountability Surveillance and Improvement Program On Apparatus of The Indonesian Attorney General 946,544, ,396,795 1,704,820-1,480,645,720-54, ,576, ,631,091-18,912, ,912, Investigations / Security / Support Program On Intelligence Case - 41,428, ,500-41,790, Settlement and Handling Program On General Criminal Case - 363,145, ,145, Settlement and Handling Program On Special Criminal Case, Severe Violation of Human Rights and Corruption Case Settlement and Handling Program On Civil Cases and State Administrative Cases - 177,153, ,153,625-27,481, ,481, MINISTRY OF STATE SECRETARIAT 413,643,369 1,467,942, ,375,289 1,462,475 2,138,423,857 The Indonesian Budget Overview

184 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL The Supporting Program for Management and Implementation of Other Technical Duties of the State Secretariat Infrastructure and Facility Improvement Program On Apparatus of The State Secretariat The Supporting Service Organizing Program On Policy To The President and Vice President The Supporting Program for Management and Implementation of Other Technical Duties of the State Secretariat 4,814,400 The Supporting Service Organizing Program On Policy To The President and Vice President The Supporting Program for Management and Implementation of Other Technical Duties of the State Secretariat 65,262,969 Infrastructure and Facility Improvement Program On Apparatus of The State Secretariat The Supporting Program for Management and Implementation of Other Technical Duties of the State Secretariat 3,133,729 Infrastructure and Facility Improvement Program On Apparatus of The State Secretariat The Supporting Service Organizing Program On Policy To The President and Vice President The Supporting Program for Management and Implementation of Other Technical Duties of the State Secretariat 742,312 The Supporting Service Organizing Program On Policy To The President and Vice President The Supporting Program for Management and Implementation of Other Technical Duties of the State Secretariat 302,683, ,588,754 42,331,026 1,462, ,066, ,080, ,659, ,739,620-19,063,378 2,588,436-21,651,814 33,680,940 24,635,519-63,130,859-33,931, ,931, ,153,673 21,422, ,839,000-46,753,302 11,835,698-58,589, ,957,652 2,524, ,615,812-32,747,408 8,252,592-41,000,000-10,022, ,022,270 36,418, ,160,413-16,514, ,514,496-31,647, ,647, Attachment

185 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Infrastructure and Facility Improvement Program On Apparatus of The State Secretariat The Supporting Program for Management and Implementation of Other Technical Duties of the State Secretariat The Supporting Program for Management and Implementation of Other Technical Duties of the State Secretariat Managerial Supporting Program and Implementation of State Secretariat s Other Technical Duties ,650,000-18,650,000 4,174,974 41,513,892 3,516,628-49,205,494 26,883,988 40,933,311 11,842,701-79,660,000 5,947,140 50,936,205 3,116,655-60,000, MINISTRY OF INTERNAL AFFAIRS 302,184,885 4,432,955,046 1,765,093,485 8,254,561,864 14,754,795, The Supporting Program for Management and Implementation of Other Technical Duties of the Ministry of Internal Affairs Infrastructure and Facility Improvement Program On Apparatus of The Ministry of Internal Affairs 79,227, ,021,174 12,815, ,065,000-3,000, ,482, ,482, Educational Program on Civil Services 56,616, ,668,547 72,181, ,465, Accountability Surveillance and Improvement Program On Apparatus of The Ministry of Internal Affairs 11,762,000 31,455, ,743-43,835, Development Program on National Unity and Politics 10,773, ,634,634 1,595, ,004, Public Governance Strengthening Program 15,678, ,429,956 38,456, ,565, Rural Government and Community Empowerment Program 21,819,000 1,717,434,262 39,584,874 8,254,561,864 10,033,400, Regional Development Program 18,895, ,172,522 47,764, ,832,200 The Indonesian Budget Overview

186 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Decentralization and Regional Autonomy Management Program 15,146, ,077,271 3,580, ,804, Administrative Setup Program on Population 24,405,162 1,555,400, ,606,609-2,578,412, Capacity Increasing Program On The Regional Government s Finance Research and Development Program On the Ministry of the Internal Affairs Education and Training Program On Apparatus of The Ministry of Internal Affairs 11,625,000 47,526,708 1,948,292-61,100,000 8,775,960 24,572,900 1,752,940-35,101,800 27,458,814 96,561,786 29,706, ,727, MINISTRY OF FOREIGN AFFAIRS 2,606,836,328 2,655,057, ,850,290-5,633,743, The Supporting Program for Management and Implementation of Other Technical Duties of the Ministry of Foreign Affairs Infrastructure and Facility Improvement Program On Apparatus of The Ministry of Foreign Affairs Stabilization Program on Foreign Relations and Politics and Optimization of Diplomacy in the Asia Pacific and Africa Areas Stabilization Program on Foreign Relations and Politics and Optimization if Diplomacy in the United State of America and Europe Areas Improvement Program on Foreign Relations and Politics through the ASEAN Cooperation Improvement Program on the Indonesia Role and Diplomacy in Multilateral Sector 2,540,702,741 2,018,698, ,500-4,559,665, ,585, ,585,790 8,704,990 33,375, ,080,000 8,206,671 27,943, ,150,000 7,595,907 45,314, ,910,000 7,343, ,926, ,270, Attachment

187 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Optimization Program on Public Information and Diplomacy 10,000,000 55,090, ,090, Optimization Program on Diplomacy Related to Legal Management and International Treaties 5,480,836 29,879, ,360,000 Quality Improvement Program on Protocol and Consular Services 9,403,691 36,636, ,040,000 Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Foreign Affairs 4,791,838 17,633, ,425, Assessment and Development Program on Foreign Policy 4,606,646 17,560, ,166, MINISTRY OF DEFENCE 22,583,831,003 10,193,791,034 14,720,877,963-47,498,500, The Supporting Program for Management and Implementation of Other Technical Duties of the Ministry of Defense Infrastructure and Facility Improvement Program On Apparatus of The Ministry of Defense Accountability Surveillance and Improvement Program On Apparatus of The Ministry of Defense 264,159, ,566, ,904, ,630, ,456 26,160, ,801, ,243, ,000 18,005,101 1,640,030-19,834, Research and Development Program On The Ministry of Defense 171,000 76,828,766 1,395,560-78,395, Education and Training Program On The Ministry of Defense and Indonesian Armed Force 481,800 81,357,029 84,644, ,482, Defense Strategy Program 508,200 51,227,690 9,143,000-60,878, General Planning and Budgeting Program on National Defense 171, ,594,337 13,238, ,003,489 The Indonesian Budget Overview

188 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Defense Industry and Technology Development Program - - 1,500,000,000-1,500,000, Potential Defense Program 187,800 46,306,351 22,823,638-69,317, Defense Strength Program 171,000 35,829,058 92,513, ,513, Integrative Use of Defense Force Program - 1,561,424, ,561,424, Alutsista (Main Equipment for Defense System ) Modernization / Non-Alutsista / Sarpras Integrative Program - - 1,329,589,000-1,329,589, Integrative Soldier Professionalism Program - 205,140,000 26,880, ,020, Integrative Operational and Management Organizing Program 718,191,383 1,851,324, ,569,516, Matra Army Readiness Support Program 14,988, ,002,402 15,100, ,091, Modernization Program on Aluusista and Non Alutsista / Land Dimension Facility and Infrastructure - - 2,521,250,000-2,521,250, Professional Enhancement Program on Land Dimension Personnel 17,651, ,184, ,835, Land Dimension Operational and Management Organizing Program - 16,324,715,177 1,559,048,454-17,883,763, Marine Dimension Readiness Support Program - 313,060, ,160, ,220, Attachment

189 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Modernization Program on Alutsista (Main Equipment for Defense System ) and Non Alutsista And Marine Dimension Facilities and Infrastructure Development Enhancement Program on Marine Dimension Personnel Professionalism Marine Dimension Management and Operational Organizing Program - - 3,552,370,000-3,552,370, ,500,000 76,390, ,890,000 3,517,968,154 1,053,035,610 12,366,236-4,583,370, Air Dimension Readiness Support Program - 392,288,159 34,021, ,310, Modernization Program on Alutsista And Non Alutsista And Facility Development And Air Dimension Sarpras Enhancement Program on Air Dimension Personnel Professionalism - - 4,211,939,055-4,211,939, ,200,000 84,120, ,320, Air Dimension Management and Operational Organizing Program 1,723,995, ,707,915 19,586,912-2,534,290, MINISTRY OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA 1,886,852,098 2,404,281, ,801,586-4,931,934, The Supporting Program for Management and Implementation of Other Technical Duties of the Ministry of Law and Human Rights Infrastructure and Facility Improvement Program on Apparatus of The Ministry of Law and Human Rights Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Law and Human Rights 1,727,234,979 1,702,915,522 92,428,626-3,522,579, ,557, ,557,334 9,389,159 17,400,641 2,010,200-28,800, General Law Administration Program 17,180,221 52,628, ,809,000 The Indonesian Budget Overview

190 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Public Development and Organization Program 22,158,775 20,637, ,810-43,492, Service Improvement and Immigration Supervisory Program 24,571, ,111,839 38,864, ,547, Indonesian Law Development / Implementation Program 24,594,094 88,982, ,623, ,199, Law Establishing Program 9,101,867 43,347, ,449, Human Rights Protection and Fulfillment Program 9,669,733 17,505,267 1,625,000-28,800, National Law Development Program 13,539,989 32,260, ,800, Research and Development Program of the Ministry of Law and Human Rights 7,004,863 14,409,137 2,386,000-23,800,000 Education and Training Program on Apparatus of the Ministry of Law and Human Rights 22,407,015 52,082,093 3,610,892-78,100, MINISTRY OF FINANCE 7,992,828,537 6,323,346,446 3,254,565,127-17,570,740, The Supporting Program for Management and Implementation of Other Technical Duties of the Ministry of Finance Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Finance 5,381,887, ,618, ,839,374-6,942,344,742 26,500,000 61,060,000 9,500,000-97,060, National Budget Management Program 35,481,846 68,093,482 18,113, ,689, Tax Revenue Security and Improvement Program 1,295,290,000 2,715,596,000 1,186,226,000-5,197,112, Attachment

191 MINISTRIES / AGENCIES, PROGRAM Surveillance, Service and Revenue Program in the Field of Customs and Excise Management Improvement Program on Fiscal Balance between Central Government and Local Government PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL 467,553,737 1,157,932, ,415,760-2,067,901,797 20,969, ,637,379 6,343, ,950, Debt Management and Financing Program 14,607,482 58,364,518 43,928, ,900, State Treasury Management Program 464,246, ,501, ,283,955-1,448,032, State Asset Management and State Receivable Settlement Arrangement and Auction Service Program Capital Market and Non-Bank Financial Institution Supervision, Development and Management Program Education and Training Program on Apparatus of The Ministry of Finance 166,823, ,897, ,426, ,148,000 45,943, ,530,248 21,876, ,350,000 51,200, ,608, ,674, ,483, Fiscal Policy Formulation Program 22,324, ,507,161 8,937, ,769, MINISTRY OF AGRICULTURE 1,028,887,843 6,690,521,799 1,422,774,954 7,582,217,104 16,724,401, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Agriculture Accountability Surveillance and Improvement Program on Apparatus of the Ministry of Agriculture Food Crop Production, Productivity and Quality Improvement Program To Achieve Self-Sufficiency and Sustainable Self-Sufficiency Horticultural Crop Production, Productivity and Quality Improvement Program 60,745, ,044, ,142,991 87,923,626 1,380,856,882 15,900,499 49,786,406 1,823,095-67,510,000 49,937, ,297,977 22,754,155 1,860,720,899 2,258,710,384 20,285, ,772,095 10,919, ,333, ,310,000 The Indonesian Budget Overview

192 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Sustainable Plantation Crop Production, Productivity and Quality Improvement Program Program for Achieving Self-Sufficient Cow Meat and Increasing Provision of Safe, Healthy, Complete and Halal Animal Food Programs for Added Value Improvement, Competitiveness Ability, Downstream Industry, Marketing and Export of Agricultural Products Agricultural Infrastructure and Facility Development and Supplying Program Program for Creation of Technology and Superior Variety of Competitive Ability Farmer Institution and Agricultural Human Resources Development Program Diversification Improvement and Communal Food Tenacity Program Biological Safety Supervision and Agricultural Quarantine Quality Improvement Program 68,346,515 1,563,117,738 20,368, ,185,375 1,981,018, ,862, ,193, ,254,000 1,095,093,023 2,244,403,240 19,290, ,127,728 30,462, ,518, ,400,000 15,705, ,105,302 12,381,949 3,648,503,967 4,354,696, ,357, ,625,388 86,637,455-1,027,620, ,717,529 1,065,488,304 64,318, ,831,261 1,348,355,680 16,254, ,801,785 11,806, ,107, ,970, ,484, ,161,377 85,905, ,550, MINISTRY OF INDUSTRY 305,840,007 1,755,947, ,325,965-2,240,113, The Supporting Program for Management and Implementation of Other Technical Duties of the Ministry of Industry Infrastructure and Facility Improvement Program on Apparatus of the Ministry of Industry 99,915, ,840,231 57,173, ,928,905-5,778,786 14,223,049-20,001, Agro-Industry Growth and Revitalization Program 14,633, ,351,832 12,590, ,575, Attachment

193 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Revitalization and Growth Program of Manufacturing Industry Base 12,560, ,619,193 8,319, ,500, High Technology-Based Superior Industry Growth Program 12,188,256 81,674,234 14,586, ,449, IKM Revitalization and Growth Program 11,874, ,938,765 13,186, ,000, Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Industry 5,612,537 36,701,642 3,185,821-45,500, Industrial Quality, Climate and Policy Study Program 130,298, ,048,176 47,253, ,600, Industrial Zoning Development Program 10,690,272 40,199,493 4,110,235-55,000, International Industrial Cooperation Program 8,065,731 36,794,866 3,696,800-48,557, MINISTRY OF ENERGY AND MINERAL RESOURCES 374,090,138 3,742,778,227 11,181,718,405-15,298,586, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Energy and Mineral Resource Infrastructure and Facility Improvement Program on Apparatus of The Ministry of Energy and Mineral Resources Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Energy and Mineral Resource 24,644, ,734,684 5,590, ,969, ,136, ,136,030 9,780,326 93,670,674 18,990, ,441, Natural Gas and Oil Management and Supply Program 24,246, ,925, ,009, ,181,700 The Indonesian Budget Overview

194 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Electricity Management Program 19,701, ,475,670 9,256,382,725-9,432,559, Mineral and Coal Development and Exploitation Program 28,074, ,753,472 17,196, The Supporting Program for Management and Implementation of Other Technical Duties of The National Energy Board Research and Development Program of The Ministry of Energy and Mineral Resource Education and Training Program of The Ministry of Energy and Mineral Resource - 416,024,140 6,517,037 47,297,663 2,450,000-56,264,700 78,903, ,746, ,722, ,373,000 59,772, ,435, ,782, ,990, Geological Research, Mitigation and Service Program 82,003, ,077, ,401, ,482, Regulation and Supervision Program on Provision and Distribution of Oil Fuel and Transportation of Natural Gas Through Pipelines Renewable Energy Management And Energy Conservation Program 27,775, ,814,943 10,323, ,913,473 12,671, ,845, ,734, ,250, MINISTRY OF COMMUNICATION 1,377,453,699 3,925,977,376 16,808,286,048-22,111,717, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Communication Infrastructure and Facility Improvement Program on Apparatus of The Ministry of Transportation Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Communication 48,859, ,277,103 24,389, ,526, ,000 38,170,700-38,510,700 14,619,822 57,677,851 3,220,127-75,517, Attachment

195 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Land Transportation Management and Operation Program 37,513, ,536,819 1,690,094,684-2,093,144, Marine Transportation Management and Operation Program 792,192,316 1,262,903,293 4,950,109,144-7,005,204, Air Transportation Management and Operation Program 266,982, ,254,042 3,792,841,962-4,994,078, Railway Transportation Management and Operation Program 20,024,252 64,524,924 4,562,966,224-4,647,515, Research and Development Program of The Ministry of Communication 17,422,417 81,174,084 37,572, ,168, Human Resource Development Program of Transportation 179,839, ,289,260 1,708,921,346-2,723,050, MINISTRY OF NATIONAL EDUCATION 7,262,136,194 18,856,234,645 7,987,246,677 21,517,495,048 55,623,112, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of National Education Accountability Surveillance and Improvement Program on Apparatus of The Ministry of National Education 141,540, ,108,101 95,173, ,932,460 1,226,753,855 26,628, ,616,684 3,655, ,900, Primary Education Program 41,483,435 1,464,113, ,070,102 4,977,312,500 6,674,979, Secondary Education Program 18,579, ,178,224 3,266,998 2,636,725,250 3,189,750, Higher Education Program 6,676,948,165 12,959,264,514 7,294,028,228 1,704,381,762 28,634,622, Early-Aged Children Education, Non-formal and Informal Education Program 42,281, ,756,763 39,174,247 2,107,297,210 2,884,509,400 The Indonesian Budget Overview

196 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Education Personnel and Teachers Quality and Welfare Improvement Program Research and Development Program of The Ministry of National Education 292,152,879 1,627,149, ,493,719 9,247,564,641 11,522,360,900 22,522, ,047,195 4,385, ,281,225 1,259,235, MINISTRY OF HEALTH 3,929,386,614 11,911,553,485 5,417,190,509 6,398,931,639 27,657,062, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Health Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Health 1,518,112,365 1,120,975, ,218,451 2,250,000 2,815,556,116 16,412,485 69,957,756 1,982,400-88,352, Nutrition and Maternal & Children Health Development Program 28,162,091 1,563,943, ,097, ,086,600 1,872,289, Health Efforts Development Program 1,642,828,680 5,069,075,044 3,566,480,821 6,198,595,942 16,476,980, Program for Disease Control and Environmental Health 196,109, ,618, ,951,314 81,675,000 1,625,354, Pharmaceutical and Medical Devices Program 13,325,604 1,426,941,942 10,619,035-1,450,886, Health Research and Development Program 56,085, ,190,935 63,132, ,408, Development and Empowerment Program on Human Resource (Ppsdmk) of Health 458,350,904 1,578,850, ,708,408 3,324,097 2,787,234, MINISTRY OF RELIGIOUS AFFAIRS 15,532,302,126 5,835,469,207 2,575,548,555 8,166,076,809 32,109,396, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Religious Affairs 589,905, ,809,823 43,146,043 26,540,965 1,307,401, Attachment

197 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Infrastructure and Facility Improvement Program on Apparatus of The Ministry of Religious Affairs Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Religious Affairs - 143, ,300,637 50,000, ,444,028 16,191,337 74,914,175 17,815, ,921, Islamic Community Guidance Program 1,095,177, ,981, ,273, ,255,559 2,017,688, Islamic Education Program 12,557,273,040 3,629,064,368 2,047,813,804 7,536,158,126 25,770,309, Christian Community Guidance Program 514,196, ,158,703 63,558,407 89,880, ,793, Catholic Community Guidance Program 296,207,295 78,457,221 1,965,788 84,781, ,411, Hindu Community Guidance Program 215,683,439 70,565,789 25,374,553 59,156, ,780, Buddhist Community Guidance Program 52,250,913 51,805,445 6,913,968 35,392, ,362, Haji and Umrah Management and Guidance Organizing Program ,212,823 Developmental Research and Training Education Program of the Ministry of Religious Affairs 64,203, ,837,565 36,708, , ,970, ,730,783 40,678, , ,312, MINISTRY OF MANPOWER AND TRANSMIGRATION The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Manpower and Transmigration 273,198,006 2,941,644, ,255,226 32,188,525 4,128,286,700 60,859, ,768,035 71,342, ,970,000 The Indonesian Budget Overview

198 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Accountability Surveillance and Improvement Program on Apparatus of the Ministry of Manpower and Transmigration Programs for Placement and Expansion of Employment Opportunities Programs for Development of Industrial Relations and Improvement of Workers Social Security 10,316,585 30,448, ,000-41,200,000 22,752, ,069,011 22,129,882 11,788, ,740,000 13,411, ,255,271 9,412,967 6,600, ,680, Transmigration Area Development Program 24,716, ,858, ,677, ,253, Transmigration Community and Area Development Program 25,340, ,806, ,987, ,133, Program for Labor Protection and Development of Labour Supervision System Research and Development Program of the Ministry of Manpower and Transmigration 10,804, ,008,833 66,387, ,200,000 16,692,070 53,644,631 2,763,299-73,100, Manpower and Productivity Competency Improvement Program 88,304, ,785, ,119,809 13,800,000 1,232,010, MINISTRY OF SOCIAL AFFAIRS 197,842,360 1,450,757, ,656,645 2,284,320,640 4,100,577, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Social Affairs Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Social Affairs 24,640, ,747,853 45,711, ,100,398 5,597,770 19,352, ,600-25,311, Social Empowerment Program 12,609, ,907,417 12,082, ,429, ,029, Social Rehabilitation Program 96,320, ,107,132 22,956, ,065, ,450, Attachment

199 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Social Insurance and Protection Program 11,728, ,525,636 65,717, Social Welfare Education, Training, Research, and Development Program 1,538,783,975 2,168,756,446 46,944, ,117,034 20,826,070 1,041, ,928, MINISTRY OF FORESTRY 795,415,773 3,568,546,454 1,631,061,383 5,000,000 6,000,023, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Forestry Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Forestry 48,704, ,166,729 18,657,752 5,000, ,528,578 13,093,034 39,719,016 1,427,950-54,240, Production Forest Utilization Improvement Program 46,846, ,552,457 19,377, ,776, Program for Improvement of Functions and Support Capability on People Empowerment Basis 130,299,759 1,604,387,047 1,282,801,745-3,017,488, Biodiversity Conservation and Forest Protection Program 362,608, ,280, ,326,301-1,288,214, Macro Planning Program in The Field of Forestry and Forest Area Consolidation 65,336, ,946,303 32,326, ,608, Research and Development Program of The Ministry of Forestry 82,783, ,321,239 31,478, ,584, Counseling and Development Program On Human Resources of Forestry 45,744, ,173,516 21,664, ,582, MINISTRY OF MARINE AFFAIRS AND FISHERIES 445,140,778 2,991,698,096 1,076,204, ,207,100 4,911,250,643 The Indonesian Budget Overview

200 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Marine Affairs and Fishery 23,621, ,847,578 68,541, ,010, Accountability Surveillance and Improvement Program Accountability Program on Apparatus of the Ministry of Marine Affairs and Fishery 9,125,995 48,438,905 3,574,100-61,139, Program for Development and Management of Catch Fishery 70,845, ,921, ,798, ,000,000 1,138,565, Cultivation Fishery Production Improvement Program 65,019, ,003, ,520, ,000, ,543, Marine and Fishery Resource Supervision Program 35,142, ,625,999 60,935, ,704, Competitive Ability Improvement Program on Fishery Products 18,652, ,117,127 38,281,682 20,400, ,451, Sea, Coastal and Small Islands Resources Management Program 21,992, ,440,041 51,933,043 77,807, ,173, Research and Development Program on Marine and Fishery Science and Technology Human Resource Development Program of Marine Affairs and Fisheries Fish Quarantine Development, Quality Control and Fishery Product Safety Program (11) 60,953, ,653, ,345, ,952,400 81,837, ,608,700 63,572, ,018,400 57,949, ,041,451 35,701, ,692, MINISTRY OF PUBLIC WORKS 1,245,545,890 8,536,212,994 45,304,623,424 2,874,321,348 57,960,703, Attachment

201 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Public Works Infrastructure and Facility Improvement Program on Apparatus of the Ministry of Public Works Accountability Surveillance and Improvement Program on Apparatus of the Ministry of Public Works 63,749, ,801,427 21,889, ,440,850 18,928, ,969, ,902, ,800,615 14,000, ,613,414 2,250, ,863, Spatial Implementation Program 33,652, ,781,305 25,566, ,000, Roads Implementation Program 417,671,095 2,906,535,561 26,504,589,744-29,828,796, Settlement Infrastructure Development Program 154,714,946 2,146,156,814 7,946,930,491 2,874,321,348 13,122,123, Water Resource Management Program 454,852,901 1,867,368,684 10,325,740,465-12,647,962, Research and Development Program of the Ministry of Public Works 63,390, ,325, ,284, ,000, Construction Development Program 24,585, ,660,980 35,469, ,716, THE COORDINATING MINISTRY FOR POLITICAL, LEGAL AND SECURITY AFFAIRS 55,278, ,704, ,203, ,187, The Supporting Program for Management and Implementation of Other Technical Duties of The Coordinating Ministry for Political, Legal and Security Affairs Infrastructure and Facility Improvement Program On Apparatus of the Coordinating Ministry for Political, Legal and Security Affairs 47,683,506 32,083, ,767, ,367,000-3,367,000 The Indonesian Budget Overview

202 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Coordination Improvement Program for Political, Legal and Security Affairs Coordination Improvement Program for Security and Safety At Sea - 140,651,555 5,571, ,223,000 7,595,460 90,969, ,264, ,830, THE COORDINATING MINISTRY FOR ECONOMIC AFFAIRS 43,104, ,740,794 36,554, The Supporting Program for Management and Implementation of Other Technical Duties of The Coordinating Ministry for Economic Affairs Infrastructure and Facility Improvement Program on Apparatus of the Coordinating Ministry for Economic Affairs 236,400,000 42,290,325 27,796, ,086, ,433,071-23,433, Policy Coordination Program for Economic Affairs 813, ,944,190 13,121, ,880, THE COORDINATING MINISTRY FOR PEOPLE WELFARE 16,571, ,388, ,290, ,250, The Supporting Program for Management and Implementation of Other Technical Duties of The Coordinating Ministry for People Welfare 16,571,483 33,148, ,720, Coordination Program for Development of People Welfare Policy - 82,239, ,290, ,530, MINISTRY OF CULTURE AND TOURISM 293,966,422 1,394,311, ,039,853 43,190,000 2,154,508, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Culture and Tourism 24,810, ,740, , ,050,949 Infrastructure and Facility Improvement Program On Apparatus of the Ministry of Culture and Tourism - 50,400 15,098,651-15,149, Attachment

203 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Culture and Tourism 3,959,102 31,740, ,000-35,900, Cultural, Artistic and Film Values Development Program 41,468, ,278,490 12,753, ,500, Historical, Archeological, and Museum Program 125,662, ,477, ,360, ,500, Tourism Destination Development Program 8,997, ,752,103 78,060,272 43,190, ,000, Marketing Development Program 14,500, ,498,657 2,101, ,100, Resource Development Program of Culture and Tourism 74,569, ,773,087 65,965, ,308, MINISTRY OF STATE-OWNED ENTERPRISES 20,209, ,402,792 7,174, ,787, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of State-Owned Enterprises 20,209,894 51,527,792 3,135,314-74,873, State-Owned Enterprises Development Program - 61,875,000 4,039,000-65,914, MINISTRY OF RESEARCH AND TECHNOLOGY 27,394, ,403, ,950, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Research and Technology Infrastructure and Facility Improvement Program on Apparatus of the Ministry of Research and Technology 27,394,284 60,595, , ,536, ,749,063 88,597,942 4,536,450 The Indonesian Budget Overview

204 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Science and Technology Upgrading Program for Strengthening the National Innovation System - 236,807, ,806, ,614, MINISTRY OF ENVIRONMENT 51,440, ,781,915 81,096, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Environment Infrastructure and Facility Improvement Program on State Apparatus of the State Ministry of Environment - 879,319,067 35,671, ,529,984 3,166, ,367,406-1,080,540 17,919,460-19,000, Natural Resources and Environment Management Program 15,769, ,171,391 60,010, ,951, MINISTRY OF COOPERATIVE AND SMALL & MEDIUM-SCALE ENTREPRENEURS 54,411, ,437, ,425, ,382,187 1,013,657, The Supporting Program For Management and Implementation of Other Technical Duties of The Ministry of Cooperative and Small & Medium-Scale Entrepreneurs Infrastructure and Facility Improvement Program on Apparatus of the State Ministry of Cooperatives and Small & Medium-Scale Entrepreneurs Empowerment Program for Cooperatives and Small & Medium- Scale Entrepreneurs 54,411, ,384,804 13,014,336-14,067,364 21,444, ,811,000 35,512, ,985,824 74,966, ,382, ,334, MINISTRY OF WOMEN EMPOWERMENT AND CHILDREN PROTECTION 12,462, ,180,489 1,451, ,094, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Women Empowerment and Children Protection 12,462,651 40,915, ,460-54,280, Gender Equality and Women Empowerment Program - 65,869, ,360-66,207, Attachment

205 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Children Protection Program - 39,395, ,200-39,607, MINISTRY FOR MAKING EFFICIENT USE OF STATE APPARATUS AND BUREAUCRAT- IC REFORMATION The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry for Making Efficient Use of State Apparatus and Bureaucratic Reformation Infrastructure and Facility Improvement Program on Apparatus of The Ministry for Making Efficient Use of State Apparatus and Bureaucratic Reformation Program for Making Efficient Use of State Apparatus and Bureaucratic Reformation 21,027, ,886,196 8,985, ,900,000 21,027,888 39,287, ,246-61,112, ,850 6,692,650-7,287,500-84,003,980 1,496,020-85,500, STATE INTELLIGENCE AGENCY 70,154, ,832, ,062,358-1,133,050, The Supporting Program for Management and Implementation of Other Technical Duties of The State Intelligence Agency Accountability Surveillance and Improvement Program on Apparatus of The State Intelligence Agency State Security Rallying, Safety and Investigation Development Program 70,154,669 86,016, ,062, ,234,000-2,500, ,316, ,500, ,316, STATE PASSWORD/CODE AGENCY 42,325, ,806, ,867, ,000, The Supporting Program for Management and Implementation of Other Technical Duties of The State Code Agency 42,325,623 42,335,961 20,418, ,080, National Coding Development Program - 90,470, ,449, ,920,000 The Indonesian Budget Overview

206 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL 052 NATIONAL SECURITY COUNCIL 6,259,570 27,005,306 4,065,124-37,330, The Supporting Program For Management and Implementation of Other Technical Duties of The National Defense Council 6,259,570 5,805,306 1,765,124-13,830, National Security Policy Development Program - 21,200,000 2,300,000-23,500, CENTRAL BUREAU OF STATISTICS 604,105,265 1,325,387, ,000,000-2,284,492, The Supporting Program For Management and Implementation of Other Technical Duties of The Central Bureau of Statistics Infrastructure and Facility Improvement Program on Apparatus of the Central Bureau of Statistics Accountability Surveillance and Improvement Program on Apparatus of the Central Bureau of Statistics. 604,105, ,434, ,500, ,539, ,000, ,000, ,500, Statistical Information Service and Provision Program - 1,042,453, ,042,453, MINISTRY OF NATIONAL DEVELOPMENT PLANNING 43,632, ,849,601 41,934, ,417, The Supporting Program For Management and Implementation of Other Technical Duties of The National Development Planning Agency Infrastructure and Facility Improvement Program on Apparatus of The National Development Planning Agency Accountability Surveillance and Improvement Program on Apparatus of the National Development Planning Agency 43,632, ,084, ,717,000-18,590,408 41,409,592-60,000,000-3,700, ,700, Attachment

207 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL National Development Planning Program - 218,474, , ,000, NATIONAL LAND AGENCY 1,020,243,688 2,246,311, ,544,146-3,695,099, The Supporting Program for Management and Implementation of Other Technical Duties of The National Land Agency Infrastructure and Facility Improvement Program on Apparatus of the National Land Agency Accountability Surveillance and Improvement Program on Apparatus of the National Land Agency 1,020,243, ,545,094 29,547,764-1,528,336,546-3,292, ,511, ,803,398-8,060, ,060, National Land Management Program - 1,756,414,484 80,485,330-1,836,899, NATIONAL LIBRARY OF THE REPUBLIC OF INDONESIA 36,712, ,656,656 68,124, ,493, The Supporting Program for Management and Implementation of Other Technical Duties of The National Library of The Republic of Indonesia Infrastructure and Facility Improvement Program on Apparatus of the National Library of the Republic of Indonesia 33,488,796 57,514, , ,700, ,743,000 1,700, Library Development Program 3,223, ,142,368 65,684, ,050, MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY 191,472,836 2,944,497, ,164,827 30,136,829 3,450,272, The Supporting Program for Management and Implementation of Other Technical Duties of The Ministry of Communications and Information Technology 41,735, ,274,655 10,041, ,052,397 The Indonesian Budget Overview

208 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Infrastructure and Facility Improvement Program On Apparatus of The Ministry of Communications and Information Technology Accountability Surveillance and Improvement Program on Apparatus of the Ministry of Communications and Information Technology Resources, Post Equipment and Informatics Management Program - - 8,000,000 5,619,024 13,989, , ,000,000 19,833,500 66,604, ,397, ,004, , ,150, Information Technology Application Development Program 10,500, ,287,159 17,951, ,738, Post and Information Technology Organizing Program 16,552,358 1,875,790,057 25,828, Research and Development Program on Human Resources of Communication and Information Technology - 1,918,171,233 34,570,857 89,589,626 4,427,188 29,992, ,580, Public Communication and Information Development Program 15,890, ,168,990 7,686, ,745, NATIONAL POLICE OF THE REPUBLIC OF INDONESIA 19,119,564,251 6,563,315,649 4,098,898, The Supporting Program for Management and Implementation of Other Technical Duties of The National Police of The Republic of Indonesia Infrastructure and Facility Improvement Program on Apparatus of the National Police of the Republic of Indonesia Accountability Surveillance and Improvement Program on Apparatus of The National Police of The Republic of Indonesia Research and Development Program on the National Police of The Republic of Indonesia 19,119,564, ,460, ,074,557-12,608, ,781,778,813 19,879,025,231 4,065,398,913-4,065,398, ,074,557-12,608, Attachment

209 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Education and Training Program on Apparatus of The National Police of The Republic of Indonesia Human Resource Empowerment Program On The National Police of the Republic of Indonesia - 171,798,603 1,500, ,298, ,072, ,072, Orderliness and Security Strategy Development Program - 111,430, ,430, Orderliness and Security Cooperation Program - 32,091, ,091, Potential Security Empowerment Program - 172,495, ,495, Public Orderliness and Security Maintenance Program - 4,401,334,777 32,000,000-4,433,334, Criminal Acts Investigation and Research Program - 631,723, ,723, Program For Coping With High-Risked Domestic Nuisances - 54,839, ,839, Police Law Development Program - 19,385, ,385, FOOD AND MEDICINE CONTROLLING BOARD 157,608, ,950, ,240, ,800, The Supporting Program For Management and Implementation of Other Technical Duties of The Food and Medicine Controlling Board Infrastructure and Facility Improvement Program on Apparatus of the Food and Medicine Controlling Board 38,108, ,941,332 50,931, ,981,400-20,789,479 40,210,521-61,000,000 The Indonesian Budget Overview

210 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Food and Medicine Controlling Board 119,500, ,220, ,098, ,818, NATIONAL SECURITY AGENCY 23,341,562 93,361,845 71,001,593 2,645, ,350, The Supporting Program for Management and Implementation of Other Technical Duties of The National Defense Agency Accountability Surveillance and Improvement Program on Apparatus of The National Defense Agency 23,341,562 39,086,845 71,001,593 2,645, ,075,000-2,300, ,300, National Defense Development Program - 51,975, ,975, INVESTMENT COORDINATING BOARD 37,719, ,973,744 19,091, ,784, The Supporting Program For Management and Implementation of Other Technical Duties of The Investment Coordinating Board Infrastructure and Facility Improvement Program on Apparatus of The Investment Coordinating Board 37,719, ,625,675 12,297, ,642,219-5,192,251 4,959,334-10,151, Investment Competitiveness Improvement Program - 267,155,818 1,834, ,990, NATIONAL NARCOTICS AGENCY 13,456, ,118, ,035, ,610, The Supporting Program For Management and Implementation of Other Technical Duties of The National Narcotics Agency 13,456, ,661, ,649, ,767,744 Prevention and Eradication Program On Abuse And Illicit Trade In Narcotics (P4GN) - 184,456,756 72,385, ,842, MINISTRY OF BACKWARD DISTRICT DEVELOPMENT 14,000, ,901,612 3,457, ,133,536 1,184,493, Attachment

211 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL The Supporting Program For Management and Implementation of Other Technical Duties of The Ministry of Backward District Development Program to Accelerate the Development of Backward Regions/ Districts 14,000, ,119,977 2,556, ,676, ,781, , ,133,536 1,057,816, NATIONAL FAMILY PLANNING AND POPULATION BOARD 183,183,435 2,133,918,613 96,047,952-2,413,150, The Supporting Program For Management and Implementation of Other Technical Duties of The National Family Planning And Population Board Accountability Surveillance and Improvement Program On Apparatus of the National Family Planning and Population Board Training and Development Program of The National Family Planning and Population Board 36,383,733 64,337,966 21,917, ,639,301-5,500, ,500,000-51,625,462 18,000-51,643, Population and Family Planning Program 146,799,702 2,012,455,185 74,112,350-2,233,367, NATIONAL COMMISSION FOR HUMAN RIGHTS 20,000,731 35,619,152 1,580,117-57,200, The Supporting Program For Management and Implementation of Other Technical Duties of The National Commission For Human Rights 20,000,731 35,619,152 1,580,117-57,200, METEOROLOGICAL, CLIMATOLOGIC AND GEOPHYSICAL AGECNY 203,541, ,183, ,616,138-1,317,341, The Supporting Program For Management and Implementation of Other Technical Duties of The Meteorological, Climatologic and Geophysical Agency 55,402, ,010,278 74,265, ,677,975 The Indonesian Budget Overview

212 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Meteorological, Climatologic and Geophysical Guidance and Development Program 148,139, ,172, ,350,800-1,060,663, GENERAL ELECTION COMMISSION 338,945, ,405, ,519, ,870, The Supporting Program For Management and Implementation of Other Technical Duties of The General Election Commission Infrastructure and Facility Improvement Program on Apparatus of the General Election Commission Program For Strengthening Democratic Institution and Improving Political Process 338,945, ,585,730 16,262, ,793,435-1,340, ,159, ,500,000-68,479,268 1,097,297-69,576, THE CONSTITUTIONAL COURT OF THE REPUBLIC OF INDONESIA 12,107, ,290,076 73,302, ,700, The Supporting Program For Management and Implementation of Other Technical Duties of The Constitutional Court of the Republic of Indonesia Infrastructure and Facility Improvement Program on Apparatus of The Constitutional Court of the Republic of Indonesia 12,107, ,190,076 3,302, ,600, ,000,000-70,000, Constitutional Case Handling Program - 55,000, ,000, Constitutional Awareness Program - 47,100, ,100, FINANCIAL TRANSACTION ANALYSIS AND REPORTING CENTER 27,276,000 54,617,241 16,006,759-97,900, The Supporting Program For Management and Implementation of Other Technical Duties of The Financial Transaction Analysis And Reporting Center 27,276,000 29,468, ,000-56,900, Attachment

213 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Infrastructure and Facility Improvement Program On Apparatus of The Financial Transaction Analysis and Reporting Center Prevention and Eradication Program on Criminal Acts of Money Laundering and Terrorism Financing - - 7,500,000-7,500,000-25,149,241 8,350,759-33,500, INDONESIAN INSTITUTE OF SCIENCES 234,277, ,351,952 83,386, ,016, The Supporting Program for Management and Implementation of Other Technical Duties of The Indonesian Institute of Sciences Infrastructure and Facility Improvement Program On Apparatus of The Indonesian Institute of Sciences Research, Control, and Utilization Program On Science and Technology 7,551,391 94,572,754 1,581, ,705,700 19,879,833 14,364,597 8,849,870-43,094, ,846, ,414,601 72,955, ,216, NATIONAL NUCLEAR ENERGY AGENCY 206,286, ,277, ,003, ,567, The Supporting Program for Management and Implementation of Other Technical Duties of The National Nuclear Energy Agency Nuclear Energy, Isotopes and Radiation Application and Development Research Program 34,189,553 44,270,225 16,205,516-94,665, ,096, ,007, ,798, ,902, TECHNOLOGICAL ASSESSMENT AND APPLICATION BOARD 159,364, ,558, ,380, ,303, The Supporting Program For Management And Implementation of Other Technical Duties of The Technological Assessment and Application Board Infrastructure and Facility Improvement Program On Apparatus of The Technological Assessment And Application Board 159,364, ,749,993 14,344, ,458,845-2,054,000 78,046,000-80,100,000 The Indonesian Budget Overview

214 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Technological Assessment and Application Program - 320,754, ,989, ,744, NATIONAL AVIATION AND INTERPLANETARY AGENCY 62,799, ,468, ,233, ,501, The Supporting Program For Management and Implementation of Other Technical Duties of The National Aviation and Interplanetary Agency 11,230,047 61,213,598 20,757,509-93,201, Aviation and Interplanetary Technology Development Program 51,569, ,254, ,475, ,300, NATIONAL MAPPING AND SURVEYING COORDINATING BOARD 33,644, ,014, ,541, ,200, The Supporting Program For Management And Implementation of Other Technical Duties of The National Mapping and Surveying Coordinating Board 33,644,624 44,163,760 4,607,516-82,415, National Survey and Mapping Program - 89,850, ,933, ,784, NATIONAL STANDARDIZATION AGENCY 9,576,721 71,904,464 1,140,180-82,621, The Supporting Program For Management and Implementation of Other Technical Duties of The National Standardization Agency Infrastructure and Facility Improvement Program on Apparatus of The National Standardization Agency 9,576,721 19,444,099 79,180-29,100, , , National Standardization Development Program - 52,460, ,000-52,621, NUCLEAR ENERGY SUPERVISORY AGENCY 22,148,909 46,539,783 8,079,769-76,768, Attachment

215 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL The Supporting Program for Management And Implementation of Other Technical Duties of The Nuclear Energy Supervisory Agency Infrastructure and Facility Improvement Program on Apparatus of the Nuclear Energy Supervisory Agency 22,148,909 27,051,058 2,800,733-52,000, ,632,000-2,632, Nuclear Power Utilization Monitoring Program - 19,488,725 2,647,036-22,135, STATE ADMINISTRATIVE AGENCY 39,382, ,126,323 61,620, ,128, The Supporting Program For Management and Implementation of Other Technical Duties of The State Administrative Agency Infrastructure and Facility Improvement Program On Apparatus of The State Administrative Agency State Administrative Study and State Apparatus Education and Training Program. 39,382,096 55,666, ,497-95,411,763-6,820 60,793,180-60,800,000-87,453, ,728-87,917, NATIONAL ARCHIVES OF THE REPUBLIC OF INDONESIA 25,435,979 84,199,994 39,415, ,051, The Supporting Program For Management and Implementation of Other Technical Duties of The National Archives of the Republic of Indonesia Infrastructure and Facility Improvement Program On Apparatus of the National Archives of the Republic of Indonesia 25,435,979 30,842, ,352-56,800, ,900,000-27,900, National Archives Organizing Program - 53,357,325 10,994,454-64,351, STATE PERSONNEL AGENCY 155,398, ,063, ,858, ,320,000 The Indonesian Budget Overview

216 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL The Supporting Program For Management and Implementation of Other Technical Duties of The State Personnel Agency Infrastructure and Facility Improvement Program On Apparatus of the State Personnel Agency 155,398,368 93,211,814 4,749, ,360,000-1, ,678, ,680, State Personnel Management Organizing Program - 80,850,000 33,430, ,280, FINANCIAL AND DEVELOPMENT CONTROLLING AGENCY 290,503, ,014,057 17,496, ,014, The Supporting Program For Management and Implementation of Other Technical Duties of The Financial And Development Controlling Agency Infrastructure and Facility Improvement Program On Apparatus of the Financial And Development Controlling Agency Program for Controlling Internal Accountability of State Finance and Development of Government Internal Control System Implementation 290,503, ,214, , ,848, ,800,000-17,365,500-17,365, ,800, MINISTRY OF TRADE 231,150,644 1,251,210, ,462,390 2,180,600 2,136,004, The Supporting Program For Management and Implementation of Other Technical Duties of The Ministry of Trade Infrastructure and Facility Improvement Program On Apparatus of The Ministry of Trade 71,644, ,477,817 16,583,851-38,390,968 57,968, ,706,049 96,359, Domestic Trading Development Program 15,489, ,642, ,612,358 2,180, ,924, Foreign Trading Enhancement Program 17,511,736 99,216,676 2,223, ,952, Attachment

217 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL International Trading Cooperation Enhancement Program 13,464,004 97,274, , ,727, Accountability Surveillance and Improvement Program on Apparatus of The Ministry of Trade 5,822,893 22,159,739 2,038,856-30,021, Export Development Program 66,605, ,489,796 4,107, ,202, Commodity Market Efficiency Improvement Program 8,500,000 72,060,075 3,278,375-83,838, Assessment and Development Program On Trading Policy 8,703,811 42,573,566 11,835,100-63,112, Consumer Protection Enhancement Program 23,409, ,925,521 44,824, ,159, MINISTRY OF PUBLIC HOUSING 27,118, ,427,380 2,105,443, ,500,000 2,759,490, The Supporting Program For Management and Implementation of Other Technical Duties of The Ministry of Public Housing 27,118, ,431,195 1,250, ,800, Housing and Settlement Area Development Program - 148,966,185 2,102,223, ,500,000 2,488,690, Housing and Settlement Area Financing Development Program - 55,030,000 1,970,000-57,000, MINISTRY OF YOUTH AND SPORTS 27,948,915 2,389,530, ,610,800-3,004,090, The Supporting Program For Management and Implementation of Other Technical Duties of The Ministry of Youth and Sports 27,948, ,820, , ,100,000 The Indonesian Budget Overview

218 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL Infrastructure and Facility Improvement Program On Apparatus of the Ministry of Youth and Sports - 4,400,000 85,930,000-90,330, Youth Service Program - 442,110, , ,460, Sport Coaching and Development Program - 799,730, ,000,000-1,299,730, Good Performance Sports Coaching Program - 965,470, ,470, CORRUPTION ERADICATION COMMISSION 251,842, ,119, ,732, ,695, The Supporting Program For Management and Implementation of Other Technical Duties of The Corruption Eradication Commission 251,842,849 59,666, ,492, ,002, Corruption Eradication Program - 104,452,867 54,239, ,692, REGIONAL REPRESENTATIVE ASSEMBLY (DPD) 168,293, ,914, ,991,860-1,154,200, The Supporting Program For Management and Implementation of Other Technical Duties of The Regional Representative Assembly of The Republic of Indonesia Infrastructure and Facility Improvement Program On Apparatus of The Regional Representative Assembly of the Republic of Indonesia Institutional Strengthening Program On The Regional Representatives Assembly In the Democratic System 168,293, ,173,480 7,131, ,598,000-48,501, ,860, ,362, ,240, ,240, INDONESIAN JUDICIAL COMMISSION 7,461,758 68,232,418 4,005,824-79,700, Attachment

219 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL The Supporting Program For Management and Implementation of Other Technical Duties of The Indonesian Judicial Commission Infrastructure and Facility Improvement Program on Apparatus of The Indonesian Judicial Commission Performance Improvement Program On Selection of the Justice of Supreme Court and Surveillance of Judges Conduct 7,461,758 49,995,418 2,755,824-60,213,000-2,108,000 1,250,000-3,358,000-16,129, ,129, NATIONAL DISASTER HANDLING AGENCY 18,289, ,106, ,313,546 40,000, ,710, The Supporting Program For Management and Implementation of Other Technical Duties of The National Disaster Handling Agency Infrastructure and Facility Improvement Program On Apparatus of The National Disaster Handling Agency Accountability Surveillance and Improvement Program On Apparatus of The National Disaster Handling Agency 18,289,772 27,903, ,500-23,217, ,146,046-3,360, ,650, ,363,355 3,360, Program For Coping With Disasters - 558,625, ,000 40,000, ,335, NATIONAL AGENCY FOR PLACEMENT AND PROTECTION OF INDONESIA MAN- POWER The Supporting Program For Management and Implementation of Other Technical Duties of The National Agency For Placement and Protection of Indonesian Manpower - BNP2TKI Facility Improvement Program on Indonesian Manpower Placement and Protection 30,158, ,687,761 19,023,701 4,130, ,000,000 30,158, ,723,346 14,488,116 4,130, ,500,000-74,964,415 4,535,585-79,500, SIDOARJO MUDFLOW HANDLING AGENCY (BPLS) 14,382,400 91,172, ,091, ,396,553 1,286,043,205 The Indonesian Budget Overview

220 MINISTRIES / AGENCIES, PROGRAM The Supporting Program For Management and Implementation of Other Technical Duties of The Sidosrjo Mudflow Handling Agency PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL 14,382,400 7,800, ,430-22,752, Program for Coping With Sidoarjo Mudflow Disaster - 83,371, ,522, ,396,553 1,263,290, GOVERNMENT GOODS / SERVICES SUPPLY POLICY INSTITUTION 10,991, ,435,486 86,170, ,597, The Supporting Program For Management and Implementation of Other Technical Duties of The Government Goods / Services Supply Policy Institution Infrastructure and Facility Improvement Program on Apparatus of The Government Goods / Service Supply Policy Institution Government Goods / Services Supply System Development Program 10,991,443 35,912,147 1,098,410-48,002, ,460 79,481,540-79,700,000-75,304,879 5,590,121-80,895, NATIONAL SAR AGENCY 133,384, ,211, ,204,137-1,163,800, The Supporting Program For Management and Implementation of Other Technical Duties of The National SAR Agency Infrastructure and Facility Improvement Program On Apparatus of The National SAR Agency 133,384,745 85,545,018 62,238, ,168, , ,694, ,904, Search, Aid, and Rescue Management Program - 180,455, ,271, ,727, BUSINESS COMPETITION SUPERVISION COMMISSION 32,812,018 46,699, ,808, ,320, Business Competition Supervision Program 32,812,018 46,699, ,808, ,320, Attachment

221 MINISTRIES / AGENCIES, PROGRAM PERSONNEL EXPENDITUR GOODS CAPITAL SOCIAL AIDS TOTAL 109 SURAMADU AREA DEVELOPMENT AGENCY 7,720,550 86,927, ,852, ,500, The Supporting Program For Management and Implementation of Other Technical Duties of The Suramadu Area Development Agency 7,720,550 32,317, ,050-40,500, Suramadu Area Development Acceleration Program - 54,610, ,390, ,000, OMBUDSMAN OF THE REPUBLIC OF INDONESIA 7,038,229 8,754, ,615-16,312, The Supporting Program For Management and Implementation of Other Technical Duties of The Ombudsman of the Republic of Indonesia 7,038,229 8,754, ,615-16,312, NATIONAL AGENCY FOR BORDER MANAGEMENT The Supporting Program For Management and Implementation of Other Technical Duties of The National Agency For Border Management 9,967, ,364, ,667, ,000,000 9,967, ,206, ,753, ,928, Management Program On Country Border and Frontier Regions - 164,158,123 15,913, ,071,921 TOTAL 99,891,906, ,849,713, ,854,213,402 59,183,477, ,779,310,642 The Indonesian Budget Overview

222 Attachment

223 As an effort to consistently establish good governance, this book provides a brief picture and information on the tasks and functions of Directorate General of Budget and the Ministry of Finance, especially in relation to state finance management processes, which are strongly reflected in the process of Indonesian Budget 2011 s formulation and discussions. Contributors for each topic are Directorate General of Budget staffs with hands-on experience in the Indonesian Budget Formulation. It is our hope that this book will enrich our stakeholders knowledge and understanding on the Indonesian Budget Contributor Agung Widiadi Achmad Zunaidi Mujibudda wah Sunawan Agung S. Hendra Kurniawan Eristianingsih M. Indra Z. Tarigan Dendy Koska Puji Wibowo David Nalendra Wawan Sunarjo Agus Kuswantoro Editor Purwiyanto Meriyam Megia Shahab Rini Ariviani Eko Widyasmoro Mujono Basuki Graphic Design and Photographer Dana Hadi Directorate General Of Budget Gedung Sutikno Slamet, Lantai 4 Jl. Dr. Wahidin No. I Jakarta Pusat Telp Faks