FINANCIAL NOTE - anggaran.kemenkeu.go.id APBN/NK APBNP 2015... · Page iii 5.2.1.2.3 The...

FINANCIAL NOTE AND REVISED BUDGET

Fiscal Year 2015

REPUBLIC OF INDONESIA

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List Of Content ...................................................................................................................

List of Table ........................................................................................................................

List of Graphic ....................................................................................................................

List of Box ...........................................................................................................................

CHAPTER 1 INTRODUCTION

1.1 General .............................................................................................................

1.2 Changes to the basic macroeconomic assumptions in the 2015 APBN ...........

1.3 Changes in Policies in the 2015 APBNP ..........................................................

1.4 Core Changes in the 2015 APBNP Posture ......................................................

1.5 Medium Term APBN Policies ..........................................................................

CHAPTER 2 BASIC MACROECONOMIC ASSUMPTIONS AND MEDIUM-TERM PROJECTION OF APBNP

2.1 Basic Macroeconomic Assumptions ................................................................

2.1.1 Economic Growth ...............................................................................................

2.1.2 Inflation ..............................................................................................................

2.1.3 Exchange Rate ....................................................................................................

2.1.4 State Treasury Bill (SPN) 3-Month Rate ...................................................................

2.1.5 Indonesia Crude Palm Oil Price ...........................................................................

2.1.6 Oil and Natural Gas Lifting .................................................................................

2.2 Medium-Term Basic Macroeconomic Assumption Projection ..............................

CHAPTER 3 POLICIES AND TARGETS OF GOVERNMENT REVENUE IN APBNP 2015 AND MEDIUM-TERM PROJECTION

3.1 Policies and Targets of Government Revenue .................................................

3.1.1 Domestic Revenue ............................................................................................

3.1.1.1 Tax Revenue .....................................................................................................

3.1.1.2 Non-Tax Revenue (PNBP) ...............................................................................

3.1.2 Grant .................................................................................................................

3.2 Medium-Term Government Revenue Projection ............................................

List of Content

LIST OF CONTENT

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CHAPTER 4 CHANGES TO THE STATE EXPENDITURE POLICIES AND PROJECTIONS OF THE MEDIUM TERM APBN

4.1 General ..........................................................................................................

4.2 Changes in Policies and The Central Government Expenditure Budget for 2015 ...............................................................................................................

4.2.1 Changes to The Central Government Expenditure Budget by Function ..........

4.2.2 Changes to the Central Government Budget Allocation According to Organizations .................................................................................................

4.2.2.1 Budget Allocation Changes to the K/L Budget .............................................

4.2.2.2 Budget Allocation Changes to the General Teasury Fund ...............................

4.3 Policy Changes of Transfer to Region and Rural Fund in the 2015 APBNP

4.3.1 Changes in Policy and Budgeting for the Revenue Sharing Fund (DBH) ......

4.3.2 Changes in Policy and Budgeting for the Special Allocation Fund (DAK) ....

4.3.3 Changes to Policy and Budgeting of the Special Autonomy Fund .....................

4.3.4 Changes to Policy and Budgeting of the Rural Funds ..................................

4.4 Changes to Policy and Budgeting of the Education Fund ...............................

4.5 Projection of the Medium Term Government Expenditure ...............................

4.5.1 Projection of the Medium Term Central Government Expenditure .................

4.5.2 Projection of the Medium Term Transfer to Region and Rural Funds .............

CHAPTER 5 BUDGET DEFICIT, BUDGET FINANCING, MEDIUM TERM PROJECTION, AND FISCAL RISK POLICIES REVISED

5.1 General ..........................................................................................................

5.2 Deficit and Financing ....................................................................................

5.2.1 Non Loan Financing .....................................................................................

5.2.1.1 Domestic Bank ..............................................................................................

5.2.1.2 Non Domestic Bank ......................................................................................

5.2.1.2.1 Government Investment Fund .....................................................................

5.2.1.2.2 Government’s Mandatory Obligations .........................................................

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5.2.1.2.3 The Anticipation Fund of PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya ................................................................................................................

5.2.1.2.4 Funding Reserve to Social Security Agency (BPJS Kesehatan) for the Social Security Funds (DJS Kesehatan) ..................................................................

5.2.2 Debt Financing .............................................................................................

5.2.2.1 Government Bond (SBN Net) .......................................................................

5.2.2.2 Foreign Loans Net ........................................................................................

5.2.2.3 Domestic Loans Net ......................................................................................

5.2.2.4 Loan Based Financing with Standby Loans .................................................

5.3 Medium Term Budget Deficit and Financing ..............................................

5.4 Fiscal Risk .....................................................................................................

5.4.1 Basic Assumptions of Macro Economics Risk in APBNP 2015 ..............

5.4.2 Medium Term Risk of Basic Assumptions of Macro Economics ......................

5.4.3 Risk Mitigation of Basic Assumptions of Macro Economics ..........................

Annex I Law Number 3 of 2015 Concerning Amendment of The Law of the Indonesian Budget Fiscal Year 2015

Annex II Main Data of State Budget (APBN) Series in 2009-2015

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Table 1.1 Basic Macroeconomic Assumptions, 2010-2015 ...................................

Table 1.2 Summary of Budget, 2009-2015 ............................................................

Table 2.1 Global Economic Growth Projections, 2014-2015 ................................

Table 2.2 Economic Growth Projection By Use, 2014-2015 .................................

Table 2.3 Economic Growth Projection By Sectors, 2014-2015 ...............................

Table 2.4 2015 Basic Macroeconomic Assumptions ............................................

Table 2.5 Medium Term Basic Macroeconomic Assumptions ...............................

Table 3.1 Goverment Revenue, 2014−2015 ...........................................................

Table 3.2 Governments Efforts To Increase Tax Revenue In 2015 ...............................

Table 3.3 Tax Revenue, 2014-2015 ........................................................................

Table 3.4 Growth Of Nontaxable Income (PTKP) .................................................

Table 3.5 Growth Of Tax Tariff And PTKP ............................................................

Table 3.6 Land And Building Tax (PBB), 2014-2015 ............................................

Table 3.7 Excise Revenue, 2014-2015 ....................................................................

Table 3.8 Non-Tax Revenue, 2014-2015 ................................................................

Table 3.9 Non-Tax Revenue Target Of 6 K/L , 2014–2015 ...................................

Table 3.10 Revenue From Public Service Body (BLU), 2014−2015.......................

Table 3.11 Medium Term Tax Policy .......................................................................

Table 3.12 Medium Term Excise Policy ..................................................................

Table 3.13 Growth Of Tax Ratio, 2016-2018 ...........................................................

Table 4.1 Government Expenditure, 2014 - 2015 .................................................

Table 4.2 Central Government Expenditure By Function, 2014 - 2015 ......................

Table 4.3 Development ObjectIves On Economic Function .................................

Table 4.4 Line Ministries With Changing Source Of Funding And Realocation On General Treasury Account In APBNP 2015 .....................................

Table 4.5 Changes In Line Ministries Budget In APBNP 2015 ...............................

Table 4.6 Additional Allocation For Priorities Budget Ministry Of Public Works And Housing ...........................................................................................

Table 4.7 Additional Allocation For Ministry Of Transportation Priorities Budget

Table 4.8 Additional Allocation For Ministry Of Agriculture Priorities Budget ....

Table 4.9 Additional Allocation For Ministry Of Social Affairs Priorities Budget

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LIST OF TABLE

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Table 4.10 Additional Allocation For Ministry Of Education And Culture .....................

Table 4.11 Additional Allocation For Ministry Of Finance Priorities Budget ................

Table 4.12 Additional Allocation For Ministry Of Health Priorities Budget .................

Table 4.13 Additional Allocation For Ministry Of Maritime And Fisheries ...................

Table 4.14 Line Ministries Budget Based on New Nomenclature ...............................

Table 4.15 Interest Payment, 2014 - 2015 .................................................................

Table 4.16 Subsidies Expenditure, 2014-2015 ...........................................................

Table 4.17 Grant Management Program, 2014 - 2015 ..............................................

Table 4.18 Transfer To Region And Rural Fund, 2014-2015........................................

Table 4.19 Special Allocation Fund, 2014-2015 .........................................................

Table 4.20 Education Fund, 2014 - 2015 ..................................................................

Table 5.1 Deficit And Budget Financing, 2014-2015 ...............................................

Table 5.2 Non Loan Financing, 2014-2015 ..............................................................

Table 5.3 Government Participation To Soes, 2014-2015 .......................................

Table 5.4 Objectives And Benefits Of Government Participation To PT Garam (Persero) ....................................................................................................

Table 5.5 Objectives And Benefits Of Government Participation To PT Pertani (Persero) ....................................................................................................

Table 5.6 Objectives And Benefits Of Government Participation To PT Sang Hyang Seri (Persero) ............................................................................................

Table 5.7 Objectives And Benefits Of Government Participation To PT Perikanan Nusantara (Persero) .................................................................................

Table 5.8 Objectives And Benefits Of Government Participation To Perum Perikanan Indonesia .................................................................................

Table 5.9 Objectives And Benefits Of Government Participation To Perum Bulog

Table 5.10 Objectives And Benefits Of Government Participation To PT Perkebunan Nusantara III (Persero) ............................................................................

Table 5.11 Objectives And Benefits Of Government Participation To PT Perkebunan Nusantara VII (Persero) .........................................................................

Table 5.12 Objectives And Benefits Of Government Participation To PT Perkebunan Nusantara Ix (Persero) ............................................................................

Table 5.13 Objectives And Benefits Of Government Participation To PT Perkebunan Nusantara X (Persero) ............................................................................

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Table 5.14 Objectives And Benefits Of Government Participation To PT Perkebunan Nusantara XI (Persero) ...........................................................................

Table 5.15 Objectives And Benefits Of Government Participation To PT Perkebunan Nusantara XII (Persero) ..........................................................................

Table 5.16 Objectives And Benefits Of Government Participation To PT Angkasa Pura II (Persero) ....................................................................................

Table 5.17 Objectives And Benefits Of Government Participation To PT Hutama Karya (Persero) ......................................................................................

Table 5.18 Objectives And Benefits Of Government Participation To Perum Perumnas ................................................................................................

Table 5.19 Objectives And Benefits Of Government Participation To PT Waskita Karya (Persero) Tbk ...............................................................................

Table 5.20 Objectives And Benefits Of Government Participation To PT Adhi Karya (Persero) Tbk ..........................................................................................

Table 5.21 Objectives And Benefits Of Government Participation To PT Kereta Api Indonesia (Persero) ..........................................................................

Table 5.22 Objectives And Benefits Of Government Participation To PT Penjaminan Infrastruktur Indonesia (Persero) ........................................................

Table 5.23 Objectives And Benefits Of Government Participation To PT Sarana MultI Infrastruktur (Persero) ...............................................................

Table 5.24 Objectives And Benefits Of Government Participation To PT Perusahaan Listrik Negara (Persero) .........................................................................

Table 5.25 Objectives And Benefits Of Government Participation To PT Pelindo IV (Persero) .............................................................................................

Table 5.26 Obejctives And Benefits Of Government Participation To PT Pelni (Persero) .................................................................................................

Table 5.27 Objectives And Benefits Of Government Participation To PT Djakarta Lloyd (Persero) ......................................................................................

Table 5.28 Objectives And Benefits Of Government Participation To PT Angkutan Sungai Danau Dan Penyeberangan (Persero) .......................................

Table 5.29 Pobjectives And Benefits Of Government Participation To PT Dok Dan Perkapalan Kodja Bahari (Persero) ......................................................

Table 5.30 Objectives And Benefits Of Government Participation To PT Dok Dan Perkapalan Surabaya (Persero) .............................................................

Table 5.31 Objectives And Benefits Of Government Participation To PT Industri Kapal Indonesia (Persero) .....................................................................

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Table 5.32 Objectives And Benefits Of Government Participation To PT Dirgantara Indonesia (Persero) ................................................................................

Table 5.33 Objectives And Benefits Of Government Participation To PT Pindad (Persero) .................................................................................................

Table 5.34 Objectives And Benefits Of Government Participation To PT Permodalan Nasional Madani (Persero) ...............................................

Table 5.35 Objectives And Benefits Of Government Participation To PT Perusahaan Pengelola Aset (Persero) .........................................................................

Table 5.36 Objectives And Benefits Of Government Participation To PT Pengembangan Pariwisata Indonesia (Persero) ....................................

Table 5.37 Objectives And Benefits Of Government Participation To Pt Aneka Tambang (Persero) ................................................................................

Table 5.38 Objectives And Benefits Of Government Participation To Pt Askrindo (Persero) Dan Perum Jamkrindo ..........................................................

Table 5.39 Objectives And Benefits Of Government Participation To Pt Bahana Pembinaan Usaha Indonesia (Persero) .................................................

Table 5.40 Development Of Government Participation To Organizations, 2014-2015 .........................................................................................................

Table 5.41 Growth Of Other PMN, 2014-2015 .......................................................

Table 5.42 Government Financing Reserve Account 2014 .....................................

Table 5.43 Paramenter Of Computation Of Government Guarantee Fund APBN And APBNP 2015 ...................................................................................

Table 5.44 Guarantee Fund Budget 2014 And 2015 ...............................................

Table 5.45 Loan Financing 2014 And 2015 .............................................................

Table 5.46 Standby Loan Commitment 2015 .........................................................

Table 5.47 Deviation Between Macroeconomic Assumptions And Realization, 2010-2014* .............................................................................................

Table 5.48 Potential Effect Of Macroeconomic Assumptions Deviation To APBNP 2015 ........................................................................................................

Table 5.49 Potential Effect Of Macroeconomic Assumptions Devitaion To Medium Term Budget ...........................................................................................

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LIST OF GRAPH

Graph 2.1 National Economic Growth, 2013-2015 ................................................

Graph 2.2 Inflation Growth By Components,2013-2014 .......................................

Graph 2.3 Rupiah Exchange Rate To Us Dollar 2013-2014 ...................................

Graph 2.4 Government Bonds Yield , 2013-2014 ...................................................

Graph 2.5 Crude Oil Price Growth, 2009—December 2014 ..................................

Graph 2.6 Oil Lifting (Thousand Barrel A Day), 2009-2015 .................................

Graph 2.7 Natural Gas Lifting (Thousand Barrel A Day Equivalent To Oil) 2009-2015 ........................................................................................................

Graph 3.1 PPh Oil And Gas, 2014−2015 ................................................................

Graph 3.2 PPh NON-OIL AND GAS, 2014−2015 ...................................................

Graph 3.3 VAT AND PPnBM, 2014−2015 ..............................................................

Graph 3.4 Other Tax Revenue, 2014−2015 ............................................................

Graph 3.5 Import Duty, 2014−2015 .......................................................................

Graph 3.6 Export Tax, 2014−2015 ..........................................................................

Graph 3.7 Natural Resources Revenue, 2014−2015 ..............................................

Graph 3.8 Government Portion Of Soes Profit, 2014−2015 ...................................

Graph 3.9 Other Non-Tax Revenue, 2014−2015 ....................................................

Graph 3.10 Grant Revenue, 2014-2015 ....................................................................

Graph 3.11 Tax Revenue Medium Term Projection, 2016-2018 ...............................

Graph 3.12 Non-Tax Revenue Medium Term Projection, 2016-2018 ............................

Graph 3.13 Grant Medium Term Projection, 2016―2018 .......................................

Graph 4.1 Development And Projection Of Central Government Expenditure, 2010-2018 ..............................................................................................

Graph 4.2 Development And Projection Of Transfer To Region And Rural Fund, 2010-2018 ...............................................................................................

Graph 5.1 Deficit And Budget Financing Development, 2010-2015 .............................

Graph 5.2 Development And Projection Of Government Debt Ratio, 2010-2015

Graph 5.3 Government Investment Fund, 2010 - 2015 .........................................

Graph 5.4 Additional Government Participation In APBNP 2015 ...............................

Graph 5.5 Government Participation For Food Sovereignty Program .......................

Graph 5.6 Government Perticipation For Infrastructure And Connectivity

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Program ..................................................................................................

Graph 5.7 Government Participation Fo Maritime Development Program ..............

Graph 5.8 Government Participation For Defence And Security Industry Program

Graph 5.9 Government Participation For National Economic Independece Program ..................................................................................................

Graph 5.10 Development Of Mandatory Guarantee Fund, 2010 - 2015 ............

Graph 5.11 Issuance Of Sbn (Neto), 2010-2015 ......................................................

Graph 5.12 Program Loan, 201O -2015 ....................................................................

Graph 5.13 Project Loan, 2010 - 2015 ......................................................................

Graph 5.14 Domestic Loan 2010-2015 .....................................................................

Graph 5.15 Development And Projection Of Deficit And Budget Financing , 2010-2018 ........................................................................................................

Graph 5-16 Debt To Gdp Ratio, 2010-2018 ..............................................................

Graph 5-17 Sensitivity APBNP 2015 To Deviation Of Macroeconomic Assumptions

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LIST OF BOX

Box 1.1 The Nine Priorities Agenda (Nawa cita) ................................................

Box 2.1 Revision to Basic Year of Gross Domestic Product (GDP) ...........................

Box 4.1 Changes to the Nomenclature within Kabinet Kerja ...............................

Box 4.2 Priority Programs For Rural Funds .......................................................

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Introduction Chapter I

Financial Note and Revised Budget 2015 1-1

CHAPTER 1INTRODUCTION

1.1 GeneralThe 2015 State Buget (APBN) is a baseline budget because it was planned during the reign of the previous cabinet (Kabinet Indonesia Bersatu II) to be implemented by the new cabinet (Kabinet Kerja). Baseline budget means that the budget allocation only takes into account what is absolutely necessary to run the new government and to provide service for the people, such that there is room for change allowed so that the new government can implement its planned programs in accordance to the new President’s vision, mission and agendas. The new government has appointed a new cabinet, named Kabinet Kerja; and has set forth certain goals and development priorities that are summarized under the concept of “Nawacita” and “Trisakti.” The “Trisakti” summarizes the President’s missions that include: (1) political sovereignty; (2) economic independence; and (3) cultural identity. On the other hand, “Nawacita” is the embodiment of the President’s agendas to bring forth his visions. The nine priorities agenda included in this Nawacita are elaborated in Box 1.1.

BOX 1.1THE NINE PRIORITIES AGENDA (NAWA CITA)

1. To renew the state’s obligation to protect all people and provide security to all citizens through the free and active foreign policy, national security and the development of reliable national defense based on integrated national interests and strengthening national identity as a maritime nation.

2. The presence of the government through a clean, effective, democratic, and reliable governance, by giving priority and efforts to restore public confidence in democratic institutions and continue the consolidation of democracy through reform of the political party system, electoral and representative institutions.

3. To build Indonesia from its periphery; to strengthening the rural areas within the framework of a unitary state of Indonesia.

4. To reject a weak state by reforming the system through corruption-free dignified, and reliable law enforcement.

5. To improve the quality of Indonesians by improving the quality of education and training through “Smart Indonesia” program and increasing Indonesia’s social welfare and health through the “Healthy Indonesia” and “Prosperous Indonesia” programs. To encourage land reform and land ownership for the people in Indonesia by 2019.

6. To improve people’s productivity and competitiveness in the international market so that Indonesian can move forward and stand up with other Asian nations.

7. To achieve economic independence by moving the strategic sectors to domestic economy.

8. To revolutionise the nation’s character through a policy of restructuring the national education curriculum with advanced civic education; to teach the history of the nation, the values of patriotism and to love the country, as well as to build the passion and character to defend the state through national education.

IntroductionChapter I

Financial Note and Revised Budget 20151-2

9. To strengthen diversity and social restoration of Indonesia by highlighting the policy of education for diversity and creating spaces of dialogue among citizens.

Year 2015 is an important time for the new government to make new steps in its fiscal policy that can lead to a more balanced APBN. To increase efficiency in government spending, the government has saved on subsidy for crude oil through an adjustment of subsidized crude oil prices in November 2014, an implementation of a fixed subsidy on diesel prizes; and a removal of subsidy on premium prizes (crude oil with the lowest RON number) starting from early 2015. The policies has been undertaken not only to increase fiscal space for other more productive programs, but also to decrease fiscal instability due to fluctuating International Crude oil Prizes (ICP) and the Rupiah exchange rate. The government has also decreased spending on official travel expenses and meeting packages so that funds can be refocused to support other productive, nation-wide priority programs within different government bodies (K/L). These steps are part of the new government’s initiative to eliminate unproductive government spending; and to promote more productive spending. Also, the government has reorganized the different K/L by forming new ministries, partially or fully merging the existing K/L; and also by separating different K/L and giving them new names.

These policies were crucial to establish more fiscal space so that the government can have a more stable budget. To support the implementation of goals and development priorities outlined in the “Trisakti” and “Nawacita,” there is a need to hasten the application for changes to the 2015 APBN to early in the year. This has been made possible by Law No. 27 from 2014 which concerns the 2015 APBN; and is supported by other factors that necessitates changes to the 2015 APBN. These factors are: (1) core changes to the fiscal policies; (2) the implementation of development priorities to accommodate new government initiatives, in accordance with the new government’s visions and missions, as stated in the “Trisakti” and “Nawacita; (3) A significant gap between macroeconomic basic assumptions made in the planning of the 2015 APBN and the latest outlook (the 2015 APBNP); and (4) This gap will significantly affect changes in the APBN for government income, government spending and budget funding

Several fiscal policies in the 2015 APBN has also been improved such as in matters that concern government income, spending and budget funding. A mix of different strategies and policies are crucial to increase government revenues through an effort of revenue maximization without disrupting private investment and commerce. The government’s efforts to meet the targeted tax revenue in 2015 include looking into ways to improve the taxation process through an improvement in the administration and regulation, tax diversification and law enforcement.

In matters concerning government spending, the following has been done: (1) The development of several core sectors to increase and maintain food sovereignty, and to develop the energy and electricity industry, the country’s maritime and tourism industry and the manufacturing sector, (2) The fulfillment of several core government responsibilities through the “Kartu Indonesia Pintar” in the education sector, through the “Kartu Indonesia Sehat” in the health sector and through providing housing, (3) The decrease of individual income gap (incl. Kartu Keluarga Sejahtera), as well as of inter-region income gap; (4) The development of connecting infrastructures; and (5) Other core programs and activities.



Moreover, in matters concerning budget funding, budget allocation has mainly been concentrated for capital allocation (PMN) for state-owned enterprises (BUMN) in accordance with the President’s “Nawacita” programs. Several of those programs supported by the different BUMNs include developing the maritime industry, increasing food sovereignty, building connecting infrastructures, developing the defense industry and improving national economic independence.

1.2 Changes to the basic macroeconomic assumptions in the 2015 APBN

External challenges faced by the domestic economy in 2015 is mainly the instability of international economy, including the economy of Indonesia’s main trading partners like China, that is projected to face slower economic growth in the upcoming year. Such projections, coupled with a decrease in global commodity prizes like the Crude Oil is predicted to bring additional burden to Indonesia’s economy.

To respond to these issues, the government has worked together with the Central Bank (BI) to implement several policies to stabilize the domestic market, especially by monitoring inflation and the exchange rate. The government has also taken crucial steps in its fiscal policy implementation to maintain fiscal balance and to support a decrease in the state’s fiscal deficit.

Based on the latest development in the global and domestic economy, as well as other policies already undertaken by the government, it has become necessary to make changes to the basic macroeconomic assumptions in the 2015 APBN. The following are the changes proposed by the government:

1. Economic growth is projected to be 5,7%; lower than the earlier assumed growth of 5,8%.

2. Inflation is projected to be 5%; higher than the earlier assumed inflation of 4,4%.

The government together with the Central Bank (BI) will always strive to keep inflation stable at the targeted 2015 inflation rate of 4,0 ± 1,0 % through a concerted effort through policies that aim to reduce inflation nation-wide and regionally.

3. The Rupiah exchange rate is projected to be Rp12.500 per USD, higher than the earlier assumed value of Rp11.900 per USD.

Meanwhile, decreased global liquidity due to an increase of interest rate as implemented by the Fed will likely put pressure on the development of the Rupiah exchange rate in the near future.

4. The 3-month SPN (State Treasury Bill) rate is also projected to suffer; is predicted to be 6,2% from the earlier projected rate of 6,0%.

5. Indonesian Crude oil Price (ICP) is projected to be around USD 60 per barrel, lower than the earlier assumed value of USD 105 per barrel.

A decrease in International Crude oil Prizes is predicted to continue in 2015 due to an ongoing oversupply and potential exploitation of alternative energy like the shale oil or natural gas.

6. Crude oil Lifting is projected to be 825 thousand barrel per day, lower than the earlier assumed value of 900 thousand barrel per day.



7. Natural gas Lifting is projected to reach an equivalent of 1.221 thousand barrel of crude oil per day, lower than the earlier assumed value of an equivalent of 1.248 thousand barrel of crude oil per day.

Details of the basic macroeconomic assumptions in 2014 and 2015 are included in Table 1.1.

1.3 Changes in Policies in the 2015 APBNPThe 2015 APBNP has been submitted to account for the changes to the basic macroeconomic assumptions, to make room for changes in the core fiscal policies to secure the 2015 APBN, and to accommodate the elected government’s new initiatives, in accordance to the principles stated in the “Trisakti” and “Nawacita.”

The most essential policy undertaken by the government for the 2015 APBN was the reallocation of unproductive government spending into more productive sectors to accelerate the realization of goals and development priorities. This was done, among others, by spending more efficiently on oil subsidies through the removal of premium oil subsidy, the implementation of a fixed subsidy for diesel prices and by maintaining the subsidy on kerosene. This was done to improve the government’s ability to fund more productive programs, to balance the APBN and to minimalize fiscal instability due to external factors like fluctuating international crude oil prices and the Rupiah exchange rate.

Meanwhile, changes have also been made to core fiscal policies and the government has also taken concrete steps in securing government revenues, spending and budget funding to stabilize the 2015 APBN.

In matters pertaining to government revenues, several policies have been implemented: (1) Efforts to optimize revenues without disrupting private investment and commerce, (2) Continuation of policy reforms in matters of tax administration, monitoring and law enforcement; and (3) Giving tax incentives in the form of tax and custom breaks for selected sectors. Also, non-tax

APBN APBNP

4,6 6,1 6,5 6,3 5,8 5,1 5,8 5,7

2,78 6,96 3,79 4,30 8,38 8,36 4,40 5,00

10.408 9.087 8.776 9.384 10.460 11.878 11.900 12.500

7,60 6,57 4,84 3,19 4,42 5,80 6,00 6,20

61,6 79,4 111,5 112,7 105,9 97,0 105,0 60,0

944 954 899 861 825 794 900 825

- - - - 1.213 1.224 1.248 1.221

*) Before 2011 use 3-month SBI rate**) Assumptions used since 2013

TABLE 1.1BASIC MACROECONOMIC ASSUMPTIONS, 2010-2015

Indicator 2009 2010 2011 2012 20132015

2014

Economic Growth (%, yoy)

Inflation (%, yoy)

Rupiah Exchange Rate (Rp/US$)

Gas Lifting (thousand barrel equivalent to oil/day) **)

Oil Lifting (thousand barrel/day)

Indonesia Crude Oil Price (US$/barrel)

Avg. 3-month SPN Rate (%) *)



policies (PNBP) to increase government revenue have been undertaken: (1) Controlling the effects of a decrease in crude oil lifting caused by natural decline or new oil reserve explorations, (2) Revenues from non-crude oil natural resources, other PNBP and General Service Body (BLU) are projected to be in accordance with the basic macroeconomic assumption and tariffs; and (3) The government’s share of BUMN profit has been appropriated to build infrastructure.

In matters pertaining to government spending, changes to the 2015 APBN include, among others: (1) Efforts to increase the efficiency of the federal government spending through budget restructuring by taking funds away from unproductive spending and channeling it for more productive spending, and by restructuring the government Ministries/Agencies (K/L); (2) Policy changes to accommodate new initiative programs to implement the visions and missions of the new elected government through the concepts summarized in “Trisakti” and “Nawacita” ; and (3) Changes and reallocation of government spending, made possible through Law No. 27 from 2014 in matters concerning the 2015 APBN.

In the 2015 APBNP, policies that concern the transfer to region budget and the Village Fund are largely maintained with slight adjustments to accommodate changes in the basic macroeconomic assumptions and in accordance with the vision, missions and priorities of the new Kabinet Kerja. Moreover, to fulfill state obligation as mandated by Law No. 6 in 2014 in matters concerning Villages, there will be an increase in the Village Fund for the 2015 APBN to support the development of villages and the advancement of its citizen.

In matters pertaining to budget funding, government policies in the 2015 APBNP are also still maintained with slight adjustments to accommodate changes in the basic macroeconomic assumptions and in accordance with other national priorities as stated in the “Nawacita.” Programs that are thus prioritized for budget funding support include the following: (1) Maritime development; (2) Increase in food sovereignty; (3) Building of connecting infrastructures; (4) Development of the defense industry; and (5) Increase in national economic independence. Support in budget funding for those programs are mainly in the form of PMN directed at BUMNs, such that those funds can be used for investment and capital to leverage the liquidity of the BUMNs. This is expected to drive the BUMNs as “agents of development” to be more actively involved in the realization of the “Nawacita.”

The 2015 APBNP also accommodates changes in the state education budget in accordance with changes in government spending. Those changes are necessary to fulfill the mandate prescribed in Article 31 point No. 4 of the 4th Amendment to the 1945 Constitution that dictates fiscal balance. This new state education budget put forth in the 2015 APBNP also takes into account an expansion of the inclusivity of the Kartu Indonesia Pintar (KIP) to support 9 years of compulsory education and the following 3 years of universal secondary education (totaling 12 years of compulsory education).

1.4 Core Changes in the 2015 APBNP PostureIn 2015, government revenue is predicted to decrease by Rp 31,9 trillion from the 2015 APBN. This decrease in income is mainly caused by a decrease in the PNBP in the amount of Rp 141,3 trillion. The causes of this decrease are as follows: (1) A decrease in crude oil prices (ICP); (2) A decrease in natural gas and crude oil lifting; and (3) A decrease in profit from BUMNs in the amount of Rp7,0 trillion as a result of a decrease in the payout ratio. On the other hand,



there has been a targeted PNBP increase from non-petroleum natural resources in the amount of Rp7,5 trillion as a result of the production optimization of other minerals and coal, as well as from coal royalties. Tax revenues are also targeted to be Rp1.489,3 trillion, an increase of Rp109,3 trillion from the 2015 APBN. This increase is projected to come from an increase of PPN, non-energy PPh and custom revenues. The government is undertaking the following steps to improve taxation: (1) bureaucratic reformation; (2) changes in the organization structure; and (3) intensification of individual income taxes (PPh). Meanwhile, the tax ratio (in the strict sense) is 12,53% for the 2015 APBNP, but is 13,49% if we include PNBP from energy natural resources and revenues from other mineral resources.

Changes in the state spending are mainly influenced by the following factors: (1) saving on petroleum subsidy as a result of changes to such subsidies and a change of subsidy type to fixed subsidy; and also due to changes in the ICP and rupiah exchange rate assumptions; (2) saving on gas (LPG-3kg) subsidy due to changes in the ICP and rupiah exchange rate assumptions; (3) saving on travel and meeting expenses, whereby the funds will be refocused by individual ministries (K/L) for other more productive activities; and (4) additional budget for priority programs by the Kabinet Kerja, including additional budget to support priority programs by the Kabinet Kerja in the amount of Rp23,0 trillion, and additional funding allocation for the Village Fund in the amount of Rp11,7 trillion. Even though these changes accommodate additional needs to support Kabinet Kerja’s priority programs, efforts made by the government to save have in total reduced government spending by Rp55.3 trillion.

Core changes to budget funding include, among others: (1) PMN is projected to increase by Rp63.1 trillion; (2) Additional investment for Asset Management (BLU) is projected to be Rp1.5 trillion; (3) Additional SBN (netto) issuance is projected to be Rp20.6 trillion; and (4) Deficit of the 2015 APBNP is projected to be 1.90 percent of the PDB (this is a decrease from the projected deficit of 2.21% of PDB for the 2015 APBN)

A summary of the 2015 APBNP posture is included in Table 1.2.



2009

2010

2011

2012

2013

2014

LKPP

LKPP

LKPP

LKPP

LKPP

LKPP

U

naud

ited

APBN

APBN

P

A.R

even

ues a

nd G

rant

s

84

8.76

3,2

995

.271

,5

1

.210

.599

,7

1.

338.

109,

6

1.

438.

891,

1

1.

550.

100,

4

1.7

93.5

88,9

1.7

61.6

42,8

I.D

omes

tic R

even

ues

847.

096,

6

99

2.24

8,5

1.

205.

345,

7

1.33

2.32

2,9

1.43

2.05

8,6

1.54

5.38

7,6

1

.790

.332

,6

1

.758

.330

,9

1.Ta

x R

even

ues

619

.922

,2

723

.306

,7

873

.873

,9

980

.518

,1

1.07

7.30

6,7

1.14

6.84

7,4

1

.379

.991

,6

1

.489

.255

,5

a.Do

mes

tic T

ax R

even

ue

601.2

51,8

694.

392,

1

819.

752,

4

9

30.8

61,8

1.029

.850

,1

1

.103.

200,

0

1

.328

.487

,8

1.4

39.9

98,6

b.In

tern

atio

nal T

rade

Tax

1

8.67

0,4

2

8.91

4,5

5

4.12

1,5

4

9.65

6,3

47.

456,

6

4

3.64

7,3

51.5

03,8

49

.256

,9

2.N

on T

ax R

even

ues

227

.174

,4

268.

941,

9

3

31.4

71,8

3

51.8

04,7

354.

751,

9

3

98.5

40,3

4

10.3

41,0

2

69.0

75,4

II.

Gra

nts

1

.666

,6

3

.023

,0

5

.253

,9

5

.786

,7

6.83

2,5

4.7

12,8

3.2

56,3

3.

311,

9

B.G

over

nmen

t Exp

endi

ture

s

93

7.38

2,0

1

.042

.117

,2

1.

294.

999,

1

1.4

91.4

10,2

1.

650.

563,

7

1.

770.

562,

3

2.0

39.4

83,6

1.9

84.1

49,7

I.Ce

ntra

l Gov

ernm

ent E

xpen

ditu

res

628.

812,

4

69

7.40

6,4

883

.721

,9

1.

010.

558,

2

1.

137.

162,

9

1.

196.

989,

8

1.3

92.4

42,3

1.3

19.5

49,0

-Li

ne M

inist

ries E

xpen

ditu

res

306

.999

,5

332

.920

,2

41

7.62

6,2

489

.445

,9

5

82.9

40,2

570

.587

,0

6

47.3

09,9

795.

480,

4

-N

on L

ine M

inist

ries E

xpen

diru

tes

32

1.812

,9

364

.486

,2

46

6.09

5,7

5

21.11

2,3

5

54.2

22,7

626

.402

,8

7

45.13

2,4

5

24.0

68,6

II.

Tran

sfer

to R

egio

n an

d R

ural

Fun

d

30

8.58

5,2

344

.727

,6

411

.324

,8

480.

645,

1

513.

260,

4

573.

702,

9

6

47.0

41,3

6

64.6

00,7

1.Tr

ansf

er to

Reg

ion

308.

585,

2

3

44.7

27,6

4

11.3

24,8

48

0.64

5,1

51

3.26

0,4

57

3.70

2,9

637

.975

,1

643

.834

,5

a.Ba

lanc

ed F

und

28

7.25

1,5

3

16.7

11,3

347.

246,

2

411

.293

,1

430

.354

,7

4

77.0

52,8

516

.401

,0

5

21.7

60,5

b.Sp

ecia

l Aut

onom

y Fun

d

9.

526,

6

9.

099,

6

10.

421,3

11.9

52,6

1

3.44

5,6

16.14

8,8

16.6

15,5

1

7.11

5,5

c.Sp

ecia

l Fun

d fo

r DIY

-

-

-

-

115,

7

41

9,1

5

47,5

547

,5

d.Ot

her T

rans

fer F

und

*)

11.8

07,2

18.

916,

7

53.

657,

2

57.

399,

4

6

9.34

4,4

80.0

82,3

104

.411

,1

104

.411

,1

2.R

ural

Fun

d

-

-

-

-

-

-

9.0

66,2

20.7

66,2

III.

Susp

end

(15

,6)

(16,

8)

(

47,5

)

2

06,9

140,

4

(

130,

5)

-

-

C.Pr

imar

y Ba

lanc

e

5.1

63,3

41.5

37,5

8.8

62,4

(5

2.78

4,6)

(98

.637

,2)

(8

7.02

1,1)

(93

.926

,4)

(66

.776

,0)

D.

Surp

lus/

Def

icit

(A -

B)

(8

8.61

8,8)

(46.

845,

7)

(8

4.39

9,5)

(

153.

300,

6)

(

211.

672,

7)

(2

20.4

61,9

)

(24

5.89

4,7)

(

222.

506,

9)

(1,5

8)

(0

,73)

(1,

14)

(1,8

6)

(2,3

3)

(2,1

8)

(

2,21

)

(

1,90

)

E.Fi

nanc

ing

112

.583

,3

91.

552,

0

13

0.94

8,9

175

.158

,2

23

7.39

4,6

245

.024

,4

245

.894

,7

222

.506

,9

I.Do

mes

tic F

inan

cing

12

8.13

3,1

9

6.11

8,5

14

8.74

8,1

19

8.62

2,5

2

43.19

9,7

2

61.2

35,8

269

.709

,7

2

42.5

15,0

II.

Fore

ign

Fina

ncin

g (ne

tto)

(1

5.54

9,8)

(

4.56

6,5)

(1

7.79

9,2)

(2

3.46

4,4)

(5.8

05,2

)

(1

6.21

1,3)

(

23.8

15,0

)

(20.

008,

1)

Surp

lus/

(Def

icit)

Fin

anci

ng

2

3.96

4,5

44.

706,

3

4

6.54

9,4

21

.857

,6

2

5.72

1,9

2

4.56

2,6

0

,0

0

,0

*) Be

fore

201

4 wa

s call

ed A

djustm

ent F

und

TABL

E 1.

2Su

mm

ary

of B

udge

t, 20

09 –

201

5(b

illio

n ru

piah

)

2015

% to

GD

P



1.5 Medium Term APBN PoliciesThe Medium term APBN policies are an extension of the 2015 APBNP policies. These mid-term policies include policies concerning core assumptions of the macroeconomics, government income, government spending and budget funding.

Global and domestic economic trends help to shape the upcoming national economic trends. Moreover, the new government and their new development programs have shifted targets and core assumptions of the macroeconomics for the next five years. These changes are: (1) Economic growth in the period between 2016 and 2018 is projected to be around 5.8% to 7.8% with an increasing trend; (2) Inflation rate will be kept low with a decreasing trend. Inflation rate in the period between 2016 and 2017 is projected to be fixed around 4.0% ± 1; and this is to be decreased to 3.5% ± 1 in 2018; (3) The Rupiah exchange rate is projected to be moving around Rp13,200 to Rp12,650 per USD in the period between 2016-2018, with trends of gradual strengthening of the Rupiah; (4) increase in the 3-month SPN (State Treasury Bill) rate in the period between 2016 and 2018 is projected to hover around 6,0% to 3,5% with a decreasing trend; (5) Changes in the ICP prize will continue to be influenced by international crude oil prizes. The ICP is projected to be around USD60 to USD 90 per barrel; (6) Crude oil lifting between the period of 2016 and 2018 is projected to be around 850 to 700 thousand barrels per day; with a decreasing trend each year; and (7) Natural gas lifting is projected to be around 1,100 to 1,300 thousand barrels comparable to crude oil per day; with an increasing trend.

In matters concerning government income, medium term strategies/policies going to be undertaken are: (1) Implementation of reforms and reorganizations to the Tax-administering body; (2) Improvement of the reward and punishment system; (3) Development of an automatic service and control system; (4) Development of an integrated risk management system for import, export, customs and bonded zones; (5) Continuing renegotiation on terms of contract for coal businesses in the mining sector; (6) Improvement on the method for the accounting of PNBP from fishery; (7) Improvement on the efficiency of BUMNs and implementation of a BUMN dividend pay-out ratio that is suitable for each individual BUMN; and (8) Diversification and Intensification for the inventory of the potential of PNBP for the K/L and improvement on laws concerning PNBP.

Also Central Government medium term spending policies are in line with the medium term development plans (RPJMN 2015-2019). Core medium term macroeconomics assumptions are also in line with current economic trends and other medium term government policies that have been and will be implemented. Generally, these are the medium term spending policies to be implemented by the central government: (1) Central government spending is directed to support the implementation of missions and developments as outlined in the RPJMN 2015-2019; (2) Supporting effective and efficient governance through bureaucratic reforms, controlling governance spending and spending efficiency; (3) Supporting the building of infrastructures in line with the priority agendas or for supporting economic growth; (4) Pushing for growth of investments that increase the people’s productivity; (5) Continuing SJSN in healthcare and labor; and (6) Supporting efforts to promote the quality of education by keeping education fund allocation to the 20% ratio as mandated by the 1945 Constitution. To support the efficiency and effectiveness of various government programs, there needs to be synchronization between the central and provincial development plans.

In matters that concern the transfer to region budget and the Rural Fund, the central government



has shown their commitment through fiscal decentralization policies and consistent regional development, among others through: (1) Distribution of the audited insufficient DBH payment; (2) Allocation of the special allocation fund (DAK) so that its use can be more effective, selective and optimal; (3) Allocation of special autonomy funds for Papua, West Papua and Aceh, including additional funds for the province of Papua and West Papua; (4) Allocation of special funds for DIY to support the special needs of DIY; (5) Other transfer funds are allocated among others for teacher’s allowance, teacher’s additional income, BOS, government project funds and decentralization; (6) Improving the effectiveness of regional infrastructure spending; and (7) Supporting the implementation of Village Laws (UU Desa) such that there is an acceleration in village development by maintaining good governance and accountability.

To fulfill medium term budget funding, the government uses funds from debts and non-debts; and these are policies to be undertaken for such purposes: (1) Supporting the building of infrastructures through the allocation of PMN, revolving funds and liability guarantee; (2) Optimizing the planning and utilization of debts for productive activities like sharia bond (sukuk) issuance based on individual projects; and (3) Managing government securities through the expansion of the domestic SBN market and development of a more flexible domestic SBN issuance method.

Chapter IIBasic Macroeconomic Assumptions and Medium-Term Projection of APBNP


CHAPTER 2BASIC MACROECONOMIC ASSUMPTIONS

AND MEDIUM-TERM PROJECTION OF APBNP

2.1 Basic Macroeconomic AssumptionsIn 2014 , the global economy has not shown significant recovery. Economic growth in various areas, both developed and developing countries tend to be moderate. In developed countries, economic improvement occurs especially in The United States (USA), while the economy of Europe and Japan are still weak and accompanied by the risk of deflation. Meanwhile, in the area of developing countries, i.e. China, India and ASEAN countries still show the moderation growth.

In the last two years, national economic performance has encompassed by less encouraging global conditions. Uncertainty related to normalization of monetary policy in the US, economic slowdown in main partner of developed and developing countries as well as a decreasing trend in price of global commodities affected national economic performance throughout the year 2013 and 2014. Normalization of monetary policy in the US, which started since mid of 2013 through the policy of reduction purchase of government bonds by the Fed gradually and had ended in October 2014. It has a quite significant impact to the development of national financial market. Pressure to Rupiah exchange rate started to happen since May 2013 along with capital inflow to the US capital market. Pressure in the capital market is also inevitable, that is reflected from a low composite stock price index (IHSG) in the second semester of 2014. Nevertheless, Indonesia is not the only country affected by the change of America’s policy, most of the emerging countries markets suffers similarly.

In line with it, economic slowdown in number of developed and developing countries, especially Indonesia’s main trading partners i.e. Japan, China, and India, have been affected throughout the last two years. Although, Japan launched a stimulus policy known as “Abenomics”, the performance of Japan’s economy still does not match their expectations. At the beginning of 2013, Japan’s economy has shown signs of recovery, but later on, showed a trend of deceleration. In fact, in the second and third quarter of 2014, Japan’s economy experienced a contraction by 6.7 percent and 1.9 percent. Meanwhile, the era of double-digit growth in China seems to reach its limit. In the past several years, economic growth of China has decelerated. Similarly with India, it is still difficult to rebound to its growth level as high as few years ago. Moderation economic growth performance also occurs in ASEAN countries.

Along with the slowing global economic performance, international commodity prices also tends to decline, including Indonesia main export commodity prices, i.e. coal, crude palm oil (CPO), mine and other goods. A significant decline even occurs in global crude prices which is Brent from USD107.1/ barrel early in 2014 to only USD55.8/barrel and WTI from USD95.0/barrel early in 2014 to USD53.3/barrel at the end of 2014. Abundant world crude oil supplies in the presence of the substitution energy shale oil and gas, and uncertainty from Organization of the Petroleum Exporting Countries (OPEC) to reduce oil production quotas has led to reduction of world oil prices.

Based on global economic development that is less encouraging, the International Monetary

Basic Macroeconomic Assumptions and Medium-Term Projection of APBNPChapter II


Fund (IMF) revised the world economic growth projection in 2014 and 2015. Based on October 2014 outlook, global economic growth in 2014 is estimated to only reach 3.3 percent, lower than a projection in July 2014, which is 3.4 percent. Revision has also done on 2015 growth projection from 4.0 percent in July 2014 to 3.8 percent. Despite that, global economic performance projection in 2015 by IMF showed there is a fortification prospect compared to 2014 (look at Table 2.1).

Apart to uncertainty of external factor, current development as well as the prospect of national economic performance are also influenced by some domestic factors. Some government and Bank Indonesia policies for two years period to respond external turbulence must be acknowledged because they have resulted significantly to the economic. The orientation of the government policy and Bank Indonesia are more focused on protecting stability of external shocks instead of pushing higher growth. This is meant to create stronger economic fundamental for higher economic growth and sustainable growth in the future.

From the monetary side, in the context of anticipation and external disturbance mitigation, tight monetary policy (tight bias) is aimed to maintain economic stability, particularly the exchange rate and inflation. Tough pressure on exchange rates happened since tapering off policy in the US be issued in May 2013 until recently, related to the Fed speculation plan to increase referential interest rate. Pressure on Rupiah also comes from a deficit of the current accounts that occurred from 2012 as a result of decreasing tendency of international commodity prices and global economic performance slowdown, so that the world demand for Indonesian export products is decreasing. Tight monetary policy also intends to maintain the inflation rate expectations of market agents related to the selling price adjustment policy of subsidized fuel in the country.

From the fiscal side, government also take synergistic steps with monetary policies to maintain economic stability. In order to maintain Rupiah exchange rate stability, several steps were taken by the government in 2013 i.e. to stimulate the use of biodiesel to reduce fuel import as well

July Publication

October Publication

July Publication

October Publication

World 3.4 3.3 4.0 3.8

Developed Countries 1.8 1.8 2.4 2.3

USA 1.7 2.2 3.0 3.1

Europe 1.1 0.8 1.5 1.3

Japan 1.6 0.9 1.1 0.8

Developing Countries 4.6 4.4 5.2 5.0

China 7.4 7.4 7.1 7.1

India 5.4 5.6 6.4 6.4

ASEAN-5 4.6 4.7 5.6 5.4

Indonesia 5.4 5.2 5.8 5.5

Malaysia 5.2 5.9 5.0 5.2

Filipina 6.5 6.2 6.5 6.3

Thailand 2.5 1.0 3.8 4.6

Vietnam 5.6 5.5 5.7 5.6

Source: WEO-IMF

TABLE 2.1GLOBAL ECONOMIC GROWTH PROJECTIONS, 2014-2015

(%, yoy)

Countries2014 2015



as the price adjustment of the subsidized fuel. These policies intend not only to maintain the national budget deficit at a secure level, but also to improve the current transaction balance, because the deficit comes from oil trade deficit.

Pressure on the state budget derived from: (1) shortfall revenue due to the possibility of economic slowdown; (2) the possibility of increasing in its central government expenditures, especially the fuel subsidy due to depreciation of Rupiah exchange rate which is quite significant; and (3) the price of oil which is fairly high until third quarter of 2014, have also encouraged the government to conduct a policy that cuts line ministries budget in APBNP 2014. Under the Kabinet Kerja, government has adapt the price of subsidized fuel worth of Rp2.000/litre for gasoline and diesel fuel, hence the prices in the market is Rp8.500/litre for gasoline and RP7.500/litre for diesel fuel on November 18, 2014. Unlike to the same previous year policy, community resistance to price adjustments policy of subsidized fuel is fairly smaller, including support from most of the economists as a rational step in a stressfull global conditions. The price adjustment policy of subsidized fuel is a part of improvement mechanism of effective subsidy objectives and national economy structural reforms.

The main issue in the supply side to reach its potential growth level is limited infrastructure. It is expected to be addressed through the reallocation fuel subsidy policy. Thus, the price adjustment policy of subsidized fuel will not only beneficial in a short term to reduce the pressure in the state budget deficit and the current transaction balance, but will also create fiscal space to support the acceleration of economic growth in a long run. Because of that, policy must also be understood that the price adjustment policy of subsidized fuel is a part of beneficial structural reforms to improve economy in the short run and long run.

Tight monetary policy has an impact on retarding performance of the real sector due to a higher in its cost of funds. Meanwhile, the price adjustment policy of subsidized fuel would increase inflation rate and decrease the purchasing power of people. Because of that, the price adjustment policy of subsidized fuel would be followed by the compensation of other social programs, especially in the areas of education and health. Besides that, reallocation fuel subsidy policy to productive state budget, such as infrastructure is expected to be able to increase the national economic growth.

Current economic conditions of global and domestic as well as various policies that are taken by the government have an impact on several macroeconomic assumptions based calculation for 2015 budget. It is expected to cause significant deviation between an assumption that is set at APBN 2015 to the current condition.

2.1.1 Economic GrowthEconomic growth in APBNP 2015 is estimated by 5.7percent, it is lower than APBN 2015 (see graph 2.1). World economic conditions that still have not shown its recovery have an impact on national economic performance. Although the US economic performance has improved above market expectations, there is still a risk from a tight money policy that would be taken by the Fed in coming period. In addition, economic crisis happened in Russia is expected to decrease global economic performance. On the other hand, implementation of easing liquidity policy by Europe and Japan are expected to give positive financial contributions to the developing countries market, including Indonesia, which in the end will affect investment.



On the domestic side, growth forecast is also affected by mixed expansive policy under new administration. Fuel subsidy reallocation fund and government expenditure savings program used for infrastructure development and productive expenditure are expected to give encouragement in economic growth. Without aggresive policy in the infrastructure, economic growth is expected to be lower than the assumption that was set in APBN 2015. Therefore, strengthening the quality of fuel subsidy reallocation expenditure and other unproductive expenditure are directed to push back the economy in order to achieve economic growth assumption in APBN 2015 by 5.7 percent.

Household’s consumption in 2014 grew by 5.1 percent is slightly lower than in 2013 which is at 5.4 percent. The Legislative and Presidential Election went conducive, as well as price stability that maintains purchasing power of people to encourage public consumption. At the end of the year, household consumption growth is slightly slowing down, compare to previous quarter, mainly due to loss of the influence of the President Election and price adjustment policy of subsidized fuel.

Household consumption growth in APBNP 2015 is estimated at 5.1 percent (see Table 2.2). Inflation impact of price adjustment policy of subsidized fuel by 2014 was expected to have insignificant effects on household consumption in 2015 and still capable of stable growth. Gasoline subsidy deletion and fixed fuel subsidy Rp1.000/litre in maximum for diesel fuel since the beginning of 2015, led to a decline in the fuel price, is expected to drive aggregate demand. Thus, there are three types of fuel oil, which are still subsidized by the government, i.e. diesel fuel, LPG 3Kg and kerosene. In addition, the government has prepared compensation to the fuel oil price adjustment policy, so purchasing power and consumption of poor people are still expectedly maintained.

2015APBNP

Spending

1. Household Consumption 5.1 5.1

2. Non-profit Organization Consumption(LNPRT) 12.4 3.5

3. Government Consumption 2.0 4.5

4. Gross Fixed Asset Formation (PMTB) 4.1 8.5

5. Export 1.0 2.2

6. Import 2.2 1.6

GDP 5.0 5.7

Source : BPS, Kemen PPN/Bappenas, and MoF

Description

TABLE 2.2ECONOMIC GROWTH PROJECTION BY USE, 2014-2015

(PERCENT, yoy)

2014

5.8

6.0

5.5

5.85.7

5.0

5.2

5.4

5.6

5.8

6.0

APBN APBNP APBN APBNP

2013 2014 2015

percent, yoy

GRAPH 2.1NATIONAL ECONOMIC GROWTH

2013-2015

Source: Ministry of Finance and BPS



Government consumption in 2014 grows at 2.0 percent. It is lower than in 2013 at 6.9 percent. Lower growth in 2014 is caused by savings budget policy of central and local governments, especially for unproductive expenditure. Government consumption growth of state budget in 2015 is projected to reach 4.5 percent. Government consumption growth is primarily influenced by expenditure reallocation policy of unproductive expenditure, i.e. travel expenses and meeting packages expenditure, to productive expenditure and to support infrastructure spending on social welfare programs.

Gross Fixed Asset Formation (PMTB) in 2014 at 4,1 percent is slightly lower than the realization of 2013 from 5.3 percent. The tightness of global liquidity and high banking interest rates are an obstacle in increasing investment activity. The election is also the reason for investor to wait and see their investment plan. On the other hand, pressure on Rupiah exchange rate against the US dollar has also increased the cost of capital goods imports and an impact on investment performance.

In the beginning of 2015, investement activity is expected to increase in line with new government programs emphasized on improving the supply side of the economy through infrastructure, so these would encourage investment growth. In APBNP 2015, PMTB is projeced to grow 8.5 percent with various efforts from the government such as reallocating expenditure of higher proportion in infrastructure spending and trimming down number of permits for small businesses and investment through one door integrated service (PTSP) under capital investment coordinating agency (BKPM) control.

To increase competitiveness and investment equality, government will continue to integrate development strategy and policy between central and local government, legal security related to investment and business, and incentive facilities both fiscal and nonfiscal. PMTB is derived from domestic and foreign direct investment (PMA and PMDN), central government and local capital expenditure, state capital expenditure, private company profit, bank credit , initial public offering (IPO) in capital market , and other sources of capital and investment community.

From the external side, performance of export-import is fluctuated in 2014. Export performance goes down to 1.0 percent compared to the previous year’s growth at 4.2 percent. Meanwhile, import performance slightly strengthened into 2.2 percent compared to the previous year’s growth at 1.9 percent. Global economy and the volume of world trade are still low, as well as Indonesia’s major trading partners, i.e. China and Japan, to influence the growth of Indonesia export-import. In addition, internal factors in the form of mineral export restriction policies also caused decreasing export performance since the beginning of 2014. On the other hand, increases in import growth due to higher imports of non oil-gas goods.

Export-import growth in APBNP 2015 is estimated to reach 2.2 percent and 1.6 percent. An increase in global economic growth and volume of the world trade is expected to improve Indonesia export performance, although there is pressure of declining in commodity global price. Government is attempted to continue its support on export performance through improvement on structure of export manufacturing-based commodities, which is the development of nonoil-gas export products and high value added services and competitive in international market. In addition, global developments and regional value chain provide opportunities for Indonesia’s businesspersons to participate, so that diversification access of export market for national manufacturing products increased. Import performance is also expected to increase on nonoil-gas imports, particularly related to improvement of domestic economy.



From the sectoral side, growth of some sectors is expected to increase in line with new administration focus programs. Through integration of regional and sectoral approach, advantages and potential of each region to be developed, have focused on manufacturing sector; food industry, maritime industry, and tourism. In addition, efforts to develop agricultural sector should be in line with government policy related to the welfare of farmers and increase in food sovereignty. Furthermore, government will continue to provide agricultural equipment, seeds and fertilizer in order to improve acceleration of production, anticipate long dry season, as well as planting delays. Based on the condition, agricultural sector is estimated to grow 4.2 percent (see Table 2.3.)

In the meantime, industrial sector policy will be implemented in order to increase industrial competitiveness and economic acceleration through the development of industry, both in the planning of the program and target determination. Industrial growth accelerated program is implemented through: (1) value added based agro industry, mineral mines, oil and gas; (2) increasing industrial competitiveness based on human resources, domestic market, and exports; and (3) development of small and medium industry as well as creative industries. In addition, to anticipate 2015 ASEAN Economic Community (AEC), a program on improving the use of a domestic product (P3DN) will be carried out on all sectors, both goods and services. Thus, the industry growth is estimated at 6.1 percent in APBNP 2015.

From services sector in APBNP 2015, construction sector is projected to grow 7.0 percent. It is in line with the acceleration of infrastructure and investment program in Indonesia. Related to those programs, transportation and warehouse are estimated to reach 8.1 percent, while information and communication sector are expected to reach 10.1 percent.

2.1.2InflationInflation rate in 2014 closely related to commodity prices and several price policies. From the

2015APBNP

1. Agriculture 4.2 4.2

2. Mining 0.5 0.6

3. Manufacturing Industry 4.6 6.1

4. Electricity and Gas Supply 5.6 5.7

5. Water and Utilities Supply 3.0 5.3

6. Construction 7.0 7.0

7. Trade, Wholesale and Retail 4.8 4.9

8. Transportation and Warehouse 8.0 8.1

9. Accomodation and Foods 5.9 6.0

10. Information and Communication 10.0 10.1

11. Financial Services 4.9 6.4

12. Real Estate 5.0 6.5

13. Asociated Services 9.8 9.1

14. Government, Defence and Social Security 2.5 2.5

15. Education Services 6.3 8.6

16. Social Services and Community Services 8.0 8.0

17. Other Services 8.9 6.9

Gross Domestic Production 5.0 5.7

Sources : BPS, Kemen PPN/Bappenas, and MoF

TABLE 2.3ECONOMIC GROWTH PROJECTION BY SECTORS,

2014-2015(percent, yoy)

Sector 2014



side of commodity prices, there has been a pressure from weather disruption and distributions constraints. Rice price is increasing because of high impact intensity of drought caused by El Nino in several production centers. This is encouraging a decline in the national rice production estimated at 70.61 million tons. It goes down 0.94 percent compared to previous year reached 71.28 million tons. Nevertheless, pressure from declining rice production is reduced by Bulog through maintaining national rice reserve. Besides rice price, inflation in 2014 is also influenced more by the movement of several commodities price i.e. red chili, cayenne, onion, fish, and cooking oil. Meanwhile, some policies in administered price like electricity power tariff (TTL) policy, the price of 12 Kg LPG and price adjustment policy of subsidized fuel at the end of the year contribute to inflation rate. Inflation reaches 8.36 percent in 2014 higher than the assumption in APBNP 2014 at 5.3 percent.

Component of inflation from administered prices was recorded at 17.57 percent (yoy) until December 2014. High inflation pressure comes from administered prices, which is an impact of the energy reform policies, started in 2013. It goes down in August 2014, but these components of inflation rate increases again driven by price adjustment policy of subsidized fuel on November 18, 2014 i.e. Rp2.000/litre for gasoline and diesel fuel. The price adjustment policy of subsidized fuel is a phase in order to improve subsidy scheme to be more reasonable, to encourage efficiency, to reallocate subsidies structure, to obtain healtier state expenditures and to save national energy reserves.

Volatile food price had been a source of inflation pressure around 2013 and has experienced moderation with downward trend during January to August 2014, along with the movement of several grocery commodities price that are relatively stable. But then, in last four months, volatile foods inflation rate has increased caused by an increase in red chili price. Volatile food price inflation reach 10.88 percent (yoy), which is relatively declining compared to 2013. In the meantime, core inflation component was recorded at 4.93 percent (yoy). It increases slightly among others affected by Rupiah exchange rate fluctuation and as an impact from energy policy (see Graph 2.2).

4.93%

10.88%

17.57%

8.36%

0%2%4%6%8%

10%12%14%16%18%20%

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug Se

pO

ctN

ov Des

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug Se

pO

ctN

ov Des

2013 2014

Source : BPS

GRAPH 2.2INFLATION GROWTH BY COMPONENTS,

2013 - 2014 (yoy)Core

Volatile

Administered

General



In 2015, inflation rate is estimated remain overshadowed by pressure from price policy in 2014. In addition, the government is also aware of risk of inflation coming from Rupiah exchange rate fluctuations. However, some policies like food supply and food security policy, infrastructure and distribution of goods policies, mixed policy between fiscal policy, monetary policy, and real sector policy, are believed may reduce the pressure of inflation. In addition, low pressure of world commodity prices will give space for a better price management in Indonesia.

Through inflation control coordination between central and local government, inflation rate in 2015 is expected sustained at 5.0 percent. It is in the upper limit of inflation range target in 2015; 4.0 percent ± 1.0 percent. However, efforts to control national inflation in 2015 is still facing another challenge in line with the implementation of energy policy as a part of the national energy policy road map. These policies are price adjustment policy of subsidized fuel, price adjustment policy of electricity power tariff (TTL), price adjustment policy of subsidized fuel, medium and long distance economy class train tariff policy, and driving lisence (SIM) cost policy. These could be factors encouraged inflation in 2015.

2.1.3 Exchange RateIn the beginning of 2014, Rupiah exchange rate happens to be strengthened and last during the first quarter. It is especially influenced by positive perspective on domestic and global economic conditions. IN the next quarters, Rupiah fluctuates with depreciation trend until the end of 2014. In general, trend of Rupiah rupiah in 2014 tend to depreciate. It is influenced by combination of external and domestic factors.

Fom the external side, the effect of global economy strengthening does not last long because investors expect that economy recovery in the US would have an impact to stop monetary stimulus program (quantitative easing/QE3) but also increase in its referential interest rate in the US has been an anchor of global liquidity. This condition has shifted preference of capital owners from emerging markets country. The movement of investment interest has led to a large number of withdrawals in financial market and they begin to bring their investment (flight to quality) out of emerging markets countries including Indonesia. This condition puts pressure to the most global currency, including Rupiah. At the same time, weak economic growth in China, India, and some other emerging market countries have strengthened the pressure from US Dollar appreciation.

From the domestic side, pressure on Rupiah exchange rate comes from deficit current accounts performance. Deficit balance of payments is caused by weak export performance in Indonesia as the impact of low demand from major trading partner countries and an impact of the global commodities price dropped, especially major Indonesian export commodities. On the other hand, performance of Indonesia’s imports is still quite high especially from oil and gas imports. During January to December 2014, Indonesia’s trade balance records a deficit around USD1.88 billion which is made up from USD11.24 Billion surplus of nonoil and gas balance, and USD13.13 billion deficit of oil and gas balance.

In Indonesia’s balance of payment, it is noted that until the end of 2014, current account records deficit of USD26.2 billion. However, there is still positive growth in capital and financial account of USD43.6 billion. Combination of current account with capital and financial account is still increasing from USD100.65 billion in January 2014 to USD111.86 billion in December 2014 foreign exchange reserves. The growth of foreign exchange reserves in the middle of tight extenal



financing could prevent a high exchange rate pressure in the next period.

The average of Rupiah exchange rate during 2014 reaches Rp11,878 per USD or depreciated by 15.17 percent compared to 2013 (see Graph 2.3). The tightness of global liquidity as the impact of normalization monetary policy by the Fed has encouraged currency exchange rate movement in various country, including Rupiah to a new equilibrium.

In 2015, current accounts is projected not fully recover, so there is still a deficit risk. This condition will pressure to rupiah exchange rate growth in 2015. On the other hand, condition of global liquidity, which will affect capital and financial account, is still facing uncertainty. It is mainly based on the uncertainty condition of global liquidity, considering the influence of monetary tightening in the US as well as easing monetary in Japan and Europe.

The risk of higher referential interest rate by the Fed in 2015 could potentially put pressure on Rupiah exchange rate. However, government will try to strengthen Rupiah against any pressures. Government policy to improve fiscal structure, expenditure reallocation for infrastructure development, and expand fiscal space are expected to give a positive signal for the improvement of fiscal resilience and national economy. This is projected to be able to give a positive signal to the market on the national economy to increase capital inflow. In addition, the government also has a strong commitment to implement financial deepening in domestic financial market as well as financial inclusion. The strategy is believed to be able to improve the liquidity and efficiency in domestic financial market and reduce the risk of financial market turbulence and the exchange rate from flow of capital.

Based on domestic and international economic development and various factors that has been mentioned, the average exchange rate against US Dollar during 2015 are expected to fluctuate in a new equilibrium point in the range Rp12.500 per USD, weaker than the assumption in APBN 2015 at Rp11.900 per USD.

2.1.4 State Treasury Bill (SPN) 3-Month RateThe end of quantitative easing by the Fed in the end of October 2014 becomes one of the factors

11,878

10,452

8,000

9,000

10,000

11,000

12,000

13,000

14,000

Jan-

13Fe

b-13

Mar

-13

Apr

-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep-

13O

ct-1

3N

ov-1

3D

ec-1

3Ja

n-14

Feb-

14M

ar-1

4A

pr-1

4M

ay-1

4Ju

n-14

Jul-

14A

ug-1

4Se

p-14

Oct

-14

Nov

-14

Dec

-14

Rp per USD

GRAPH 2.3RUPIAH EXCHANGE RATE TO US DOLLAR 2013-2014

Daily Exchange Rate

2013 Average

2014 Average

Sources: Bank Indonesia, calculated



that influence the movement of Indonesian government bonds interest rate. Government bonds with term of 5, 10 and 30 years have experienced pressure since the middle of 2013 and continue until 2014. In addition to global factors, interest rate of government bonds increases because of pressure that comes from domestic factors like high inflation (see Graph 2.4).

Despite the pressure, investor’s interest on government bonds (SBN) remains high. This can be seen from foreign ownership that continues to rise. The proportion of foreign ownership on tradable bonds on December 12, 2014 was recorded at 38.6 percent with face value Rp470.0 Trillion or to be higher than in its position at the end of 2013 which reached 32.5 percent or Rp323.9 Trillion.

Pressure on government bonds interest rate is also experienced by short-term government bonds; State Treasury Bill 3-Month (3-month SPN). The average of 3-month SPN interest rate until the end of 2013 reached 4.5 percent, higher than the average of last year interest rate that reached 3.2 percent. Although the pressure is keep continuing during 2014, the average of 3-month SPN interest rate can be controlled at 5.8 percent or slightly lower than APBN 2014 projection by 6.0 percent. In 2015, the issue of higher US interest rate was expected to encourage liquidity competition in global market and the pressure on 3-month SPN interest rates 3 months fluctuation and other bonds. Based on all of these issues, 3-month SPN interest rate in 2015 is expected to settle between 6.2 percent, a slightly higher than the assumption of APBN 2015 at 6.0 percent.

2.1.5 Indonesia Crude Palm Oil PriceThe movement of world crude oil price, West Texas Intermediate (WTI) and Brent in the first and second semester of 2014 indicate a different tendency. In the first semester of 2014 WTI and Brent crude oil price still show increasing trend. In early 2014, the price of WTI and Brent are on USD94.9 per barrel and USD107.1 per barrel tend to increase until reach the highest price in June 2014 at USD106.2 per barrel for WTI and USD112.0 per barrel for Brent (see Graph 2.5).

This condition is influenced by winter, disruption and geopolitics (Ukraine, Libya and South Sudan). Conversely, in the second semester of 2014, the price of world crude oil tends to decline

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Jan-

13Fe

b-13

Mar

-13

Apr

-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep-

13O

ct-1

3N

ov-1

3D

ec-1

3Ja

n-14

Feb-

14M

ar-1

4A

pr-1

4M

ay-1

4Ju

n-14

Jul-

14A

ug-1

4Se

p-14

Oct

-14

Nov

-14

Dec

-14

Percent

GRAPH 2.4GOVERNMENT BONDS YIELD , 2013-2014

5 years 10 years 30 years

Sources: Bloomberg



significantly. In December 2014, WTI and Brent price are USD59.3 per barrel and USD63.3 per barrel or decrease by 39 percent for WTI and 43 percent for Brent compared to the previous year price. The decline in world crude oil price is because oil market which have supply excess from outside OPEC, including production of alternative energy source like shale oil and gas by the US. Meanwhile, the demand side tend to be weak among others due to slowdown China economy, recession in Japan economy, weak economy in Europe and an impact of fuel price subsidies reform in some Asian countries through the increase in retail prices to reduce risk from subsidies in government budget and pressure on Indonesia’s trade balance.

In line with the trend of world crude oil price movement, Indonesia crude oil price movement (Indonesia Crude Price-ICP) also decreased. During the first half year of 2014, ICP is still relatively high, above USD100 per barrel. In June 2014 ICP reachs USD109.0 per barrel, but the trend goes in other direction since August 2014 to USD99.5 per barrel and continue to be dropped until reach the lowest point in December 2014 USD59.6 per barrel on average.

In 2015, the movement of world crude oil price is predicted that it will be on a low level compare to the average in 2014. This estimation is based on higher oil supply projection than its demand. According to the Organization of Petroleum Exporting Country (OPEC), world oil demand in 2015 is expected to rise, as much as 1.1 million barrel per day compare to 2014, so it will reach 92.3 million barrel per day. US Energy Agency (EIA) also predicts an increase of world oil consumption by 0.9 million barrel per day in 2015. Source of an increase in demand of world oil is from developing countries where is estimated 71 percent from China, India and other Asian Countries. Meanwhile, demand from Organisation for Economic Cooperation and Development (OECD) countries decrease.

On the supply side, it is estimated that supply from countries outside OPEC increases by 1.4 million barrel a day from 55.7 million barrel a day in 2014 to 57.1 million barrel a day in 2015. Supply of crude oil from OPEC countries is expected to fall as much as 0.5 million barrel a day from 30 million barrel per day in 2014 into 29.5 million barrel a day in 2015.

EIA also predicts an increase in supply from countries outside OPEC will raise its production to 0.8 million barrel a day in 2015. Based on that, EIA predicts a decline in world crude oil price in

30

50

70

90

110

130

150

2009 2010 2011 2012 2013 2014

US$/brl

GRAPH 2.5CRUDE OIL PRICE GROWTH,

2009—DECEMBER 2014

ICP WTI BRENT

Sources: Ministry of Energy and Mineral Resources



2015 than 2014 with average on WTI at USD 64 per barrel and average on Brent prices at USD68 per barrel. The exact growth also happens to ICP. Nevertheless, anticipation to geopolitic risk and climate condition that could lead to an increase in world oil prices in 2015 is still needed.

By considering all of the things that are mentioned above, Indonesia crude oil price in 2015 is expected to be lower than 2014 average price and compare to oil price assumption in 2015. Government estimates average Indonesia crude oil price in 2015 to be at the level of USD60 per barrel or it is lower than the assumption in APBN 2015 at USD105 per barrel.

2.1.6 Oil and Natural Gas LiftingAfter increasing in 2009-2010, the realization of oil lifting experienced fell down in 2011-2014. In 2011, average price of oil lifting reachs 899 million barrel a day lower than the target 945 thousand barrel a day. Similar situation occurred in 2013 where the realization of oil lifting only reached 825 thousand barrel a day or lower than the assumption of 840 thousand barrel a day (look at Graph 2.6).

The realization of oil lifting during December 2013-November 2014 reachs 794 thousand barrel per day. One of the factors is production goes down naturally with 12 percent on average in old oil field, while new oil field like Blok Cepu could not yet produce maximum production. In addition, the low lifting realization is affected by production disruption due to extreme weather, elder production facilities that caused unplanned shutdown and extended maintenance.

Natural gas lifting during 2009-2011 tend to raise and reach the highest level in 2011at 1.269 thousand barrel a day equivalent Thousand Barrel of Oil Equivalents Per Day (MBOEPD). Over 2011-2013, realization of natural gas lifting declined until 2013 to 1.213 MBOEPD (see Graph 2.7). Meanwhile, during December 2013 until November 2014, realization of natural gas lifting reachs 1.224 thousand barrel in line with the target in APBNP 2014.

Trend of oil and natural gas lifting tends to decline and are predicted to decline in several years ahead, while oil and natural gas sector investment in the country will face external challenges, particularly related to low world oil prices and internal problems such as permit and overlapping

960 965 945

930

840

818

APBN900

944 954

899

861

825

794

APBNP825

760

810

860

910

960

2009 2010 2011 2012 2013 2014 2015

GRAPH2.6OIL LIFTING (THOUSAND BARREL A DAY),

2009-2015

Revised Budget RealizationSources: Ministry of Energy and Mineral Resources



land. However, government continues to restrain the decline of natural production around 3 percent a year through by production oprimization, new tunnel gas drilling and enhanced oil recovery (EOR) technology utilization. Government will also improve the coordination with related parties and supervision to partnership contract contractors (K3S) as well as other related parties to accelerate land licensing so the efforts can be accomplished.

Assumption on oil lifting in APBN 2015 is set at 900 thousand barrel per day. It is estimated will be realized as much as 825 thousand barrel per day. The achievement of this level is mainly driven by Banyu Urip field (Blok Cepu) which is estimated to reach the top of production at 165 thousand barrel a day in 2015. Meanwhile, natural gas lifting is predicted to reach 1.221 thousand barrel equivalent to oil a day. It is lower than the assumption of natural gas lifting in APBN 2015 at 1,248 Thousand barrel equivalent to oil a day. So assumption of oil and natural gas lifting in 2015 is estimated at 2.05 million barrel equivalent to oil a day. Table 2.4 below shows the whole basic macroeconomic assumptions of APBN 2015 and APBNP 2015.

2.2 Medium-Term Basic Macroeconomic Assumption ProjectionGlobal and domestic economy dynamics have impacted on the movement and national economic outlook ahead. In addition, the beginning of new regime with new directions and programmes contribute to a shift targets and basic macroeconomic assumptions of the next five years. Basic

1,240

1,224

APBN1.248

1,195

1,224

1,269

1,253

1,213

APBNP1.221

1,140

1,160

1,180

1,200

1,220

1,240

1,260

1,280

2009 2010 2011 2012 2013 2014 2015

GRAPH 2.7NATURAL GAS LIFTING

(THOUSAND BARREL A DAY EQUIVALENT TO OIL)2009-2015

APBNP RealizationSources: Ministry of Energy and Mineral Resources

a. Economic Growth (%, yoy) 5.8 5.7

b. Inflation (%, yoy) 4.4 5.0

c. State Treasury Bill (SPN) 3-Month Rate (%) 6.0 6.2

d. Exchange Rate (Rp/USD) 11,900 12,500

e. Indonesia Crude Price (USD/barrel) 105 60

f. Oil Lifting (thousand barrel a day) 900 825

g. Natural Gas Lifting (thousand barrel equivalent to oil a day)

1,248 1,221

APBNPAPBN

TABLE 2.42015 BASIC MACROECONOMIC ASSUMPTIONS

Indicators

2015



macroeconomic assumptions that was set in APBN 2015 have adjusted so it will be more suitable to the current condition and also to new direction of development policy from new government.

Economic growth during 2016 until 2018 is expected to move in the range 5.8 percent until 7.8 percent with a growing trend. External and domestic factors which more conducive will drive economic growth. From the external side, better global economic growth which starts to grow above 4.0 percent and an increase in trade will influence Indonesia trade balance to be better. From the domestic side, implementation of various infrastructure programs gives more focus to improve agriculture infrastructure, harbor, transportation infrastructure and other economic infrastructure will encourage investment activity. This step would improve business climate and investment activities by private sector and national production capacity. From consumption side, demographic structure is still a vital capital of domestic consumption. In addition, various social program i.e.Indonesia healthy card (KIS), Indonesia smart card (KIP), and prosperous family card (KKS) that will be impemented by a new government are expected to boost purchasing power of people. At the same time, well maintained with declining trend inflation also gives a positive impact on aggregate demand.

According to inflation targeting framework, inflation rate is continuously maintained at low rate with declining tendency. Inflation rate is set from 4.0 percent ± 1 percent in 2016-2017 to 3.5 percent ± 1 percent in 2018. Those targets are supported by programs development in order to improve infrastructure, national production capacity and food sovereignty program. In addition, global inflation trend also goes down and will reduce inflation pressure in the country.

Exchange rate growth in 2016-2018 is expected to move in a range Rp13,200 to Rp12,650 per USD on average, with a tendency to improve gradually. The exchange rate volatility is driven by trade balance, capital inflow, foreign direct investment (FDI) and portfolio and domestic funding sources as the implementation of financial inclusion policy and deepening. On the other side, higher investment activity and production increase capital goods demand and raw material imports. Combinations of those factors cause the appreciation of exchange rate during 2016-2018.

In line with the declining of inflation pressure, improved domestic financing sources, and positive sentiment towards healthy fiscal position have led investor interest against the instruments of government bonds better. In addition, pressure from global side related to normalization of monetary policy in the US and loose monetary policy in the major industrial countries like Europe and Japan become a factor that influenced the decline in government bonds yield, including 3-month SPN rate. 3-month SPN rate within 2016-2018 is predicted to move in the range of 6.0 percent to 3.5 percent with decreasing tendency.

In general, ICP growth is still affected by the world crude oil price. In 2014, world oil price sharply decreased which is affected by low global demand and enhancement in oil supply and other alternative energy like shale oil and gas also biodiesel. In line with better global demand, movement of world oil price and ICP are expected to be relatively stable. In 2016-2018, ICP price is estimated to move in the range of USD60 to USD90 per barrel.

On the other side, crude oil and natural gas lifting growth are estimated to decline. Decreasing trend is caused by age of oil and gas wells and the uncertainty of new wells operations. For Blok Cepu, it is expected to reach the peak of productive age in 2016 and then started to decline in following years. In general, crude oil lifting in 2016-2018 is estimated to move between 850 thousand until 700 thousand barrel a day with a declining tendency every year. On the other



hand, natural gas lifting is projected between 1,100 thousand until 1,300 thousand barrel equivalent to oil a day with increasing tendency. Related to this, government will continue to reduce the dependency of natural resources revenue and continue to pursue state revenue from sustainable sources. Table 2.5 summarizes the medium term basic assumption of macroeconomic in 2016-2018.

Indicators 2016 2017 2018

a. Economic Growth (%, yoy) 5,8 - 6,2 6,6 - 7,2 7,2 - 7,8

b. Inflation (%, yoy) 3,0 - 5,0 3,5 - 5,0 2,5 - 4,5

c. State Treasury Bill (SPN) 3-Month Rate (%) 4,0 - 6,0 4,0 - 6,0 3,5 - 5,5

d. Exchange Rate (Rp/USD) 12.800 - 13.200 12.700 - 13.100 12.650 - 13.050

e. Indonesia Crude Price (USD/barrel) 60 - 80 60 - 90 60 - 90

f. Oil Lifting (thousand barrel a day) 830 - 850 750 - 780 700 - 730

g. Natural Gas Lifting (thousand barrel equivalent to oil a day) 1.100 - 1.200 1.100 - 1.200 1.100 - 1.300

Sources: Ministry of Finance

TABLE 2.5MEDIUM TERM BASIC MACROECONOMIC ASSUMPTIONS

BOX 2.1.REVISION TO BASIC YEAR OF GROSS DOMESTIC PRODUCT (GDP)

State Budget (APBN) 2015 classified GDP data by expenditure and business fields with year 2000 as the base year or called as 2000 Series. By Expenditure this GDP series was divided into 5 categories and 9 sectors by business fields (see Table 2.6). However, in Revised State Budget (APBNP) 2015, GDP classification was made based on year 2010 as the base year (2010 Series), which consisted of 17 sectors by business fields. In terms of spending, GDP classification 2010 Series had no significant difference.

The adoption of GDP classification 2010 Series in APBNP 2015 aimed to follow Medium – Term National Development Plan (RPJMN) 2015 – 2019.

Apart from revision in classification wise both by spending and business fields, GDP 2010 Series was intended to cover economic structure development for the last 10 years, especially in technology and information sector and transportation sector because of their relatively significant effects to

Expenditure Expenditure1. Private Consumption 1. Private Consumption2. General Government Consumption 2. Non-Profit Private Consumption (LNPRT)3. PMTB (Gross Fixed Capital Formation) 3. General Government Consumption 4. Export of Goods and Services 4. PMTB (Gross Fixed Capital Formation)5. Import of Goods and Services 5. Export of Goods and Services

6. Import of Goods and Services

Business Fields/Categories Business Fields/Categories 1. Agriculture, Livestock, Forestry and Fishery 1. Agriculture, Forestry and Fishery 2. Mining and Quarry 2. Mining and Quarry 3. Processing Industries 3. Processing Industries 4. Electricity, Gas and Water 4. Electricity and Gas Supplies 5. Construction 5. Water Supply 6. Trades, Hotels and Restaurant 6. Construction 7. Transportation and Communication 7. Wholesales and Retail Trades, car and motorcycle repair and maintenance 8. Finance, Real Estate & Corporate Services 8. Transportation and Warehousing 9. Services 9. Accommodation and Foods and Beverage

10. Information and Communication11. Financial Services12. Real estates13. Corporate Services 14. Governance Administration, Banking, Mandatory Social Insurance 15. Education Services 16. Health Services and Social Activities 17. Other Services

Source: BPS

TABLE 2.6GDP CLASSIFICATIONS 2000 SERIES 2000 TO 2010 Series

2000 Series 2010 Series



distribution pattern and new product productions (additional coverage). Consequently, GDP calculation produced some discrepancies in terms of value and growth, e.g. nominal GDP, constant GDP and GDP growth (see Table 2.7).

2010 2011 2012 2013Nominal GDP Basic Year 2000 (Rp T) 6.446,9 7.419,2 8.229,4 9.084,0Nominal GDP Basic Year 2010 (Rp T) 6.864,1 7.843,7 8.662,6 9.578,4

Real GDP Basic Year 2000 (Rp T) 2.314,5 2.464,6 2.618,9 2.770,3Real GDP Basic Year 2010 (Rp T) 6.864,1 7.287,3 7.726,5 8.152,9

GDP Growth Basic Year 2000 (%) 6,2 6,5 6,3 5,8GDP Growth Basic Year 2010 (%) 6,4 6,2 6,0 5,5

TABLE 2.7GDP TREND of 2000 SERIES and 2010 SERIES

Chapter 3

3-1

Policies and Targets of Government Revenue in APBNP 2015 and Medium-term Projection

Financial Notes and Indonesian Budget 2015

CHAPTER 3POLICIES AND TARGETS OF GOVERNMENT

REVENUE IN APBNP 2015 AND MEDIUM-TERM PROJECTION

The world economy in 2015 is estimated still in an uncertainty condition which triggered by a slowdown in various countries especially China, lower commodity prices in the international market and increasing interest rate plan in the United States. These conditions affect the domestic economy, which is showed by low export growth and investment that have significant impact to several kind of government revenue in APBN 2015. Meanwhile, the slowing of domestic economy in 2014 also has negative impact on the realization of 2014 government revenue. Thus, deceleration of export and investment growth, also the weakening of commodity prices will affect significantly to some of the basic macroeconomics assumption in APBN 2015.

Economic growth is estimated at 5.7 percent in APBNP 2015, it is lower than the assumption in APBN 2015. Inflation is projected higher from 4.4 percent in APBN 2015 to 5.0 percent as the impact of fuel price increase in November 2014. The exchange rate is targeted to depreciate from Rp11,900 per USD to Rp12,500 per USD. Indonesian crude oil price (ICP) is expected to decline significantly to USD60 per barrel in APBNP 2015, compared with USD105 per barrel in APBN 2015. However, the world economy is projected to be better than in 2014. It is driven by a better projections of developed countries economy, especially the United States.

Realization of government revenue up to the end of 2014 is estimated at Rp1,550,100.4 billion or lower than the target in APBNP 2014. By considering the attainment of government revenue in 2014, which was used as a baseline for calculation in 2015, global economy progress and domestic economy progress in 2015, adjustments is needed on the target of government revenue in 2015.

In addition, the exertions to foster the target of government revenue especially from tax revenue will continue to be done in 2015. These efforts will be implemented through bureaucracy reform in the areas of taxation, organizational structure reform of Directorate General of Taxes (DJP), and intensification of taxes for private taxpayers high revenue and medium revenue.

3.1 Policies and Targets of Government RevenueGovernment revenue in APBNP 2015 is projected to be Rp1,761,642.8 billion which is lower than Rp1,793,588.9 billion in APBN 2015. Lower government revenue in APBNP 2015 is especially caused by decreasing ICP from USD105 per barrel to USD60 per barrel, decreasing oil lifting assumption from 900 MBOPD to 825 MBPOD and natural gas lifting from 1,248 MBOEPD to 1,221 MBOEPD.

Government revenue in APBNP 2015 consists of domestic revenue Rp1,758,330.9 billion and grant Rp3,311.9 billion. Domestic revenue in APBNP 2015 is estimated to decrease by Rp32,001.7 billion compared to the target in APBN 2015. Meanwhile, grant in in APBNP 2015 is projected to increase compared to the target in APBN 2015 in the amount of Rp3,256.3 billion. Realization of


Financial Notes and Indonesian Budget 20153-2

Chapter 3

government revenue in 2014 and the target of government revenue in APBNP 2015 are showed in Table 3.1.

3.1.1 Domestic RevenueIn APBNP 2015, domestic revenue is targeted to grow by Rp1,758,330.9 billion lower than the target in APBN 2015. Domestic revenue consists of tax revenue Rpp1,489,255.5 and non-tax revenue Rp269,075.4 billion.

3.1.1.1 Tax RevenueIn general, policy directions of tax revenue in APBNP 2015 have not much changed compared to APBN 2015, those are: (1) optimization tax revenue tax through tax legislation, extensification and the intensification of taxation, as well as the excavation of the potential revenue tax based on sectoral legislation; (2) taxation policy to maintain national economic stability by revising policy in import duty, export tax and PPh (income tax) from non-oil and gas sectors; (3) taxation policy to elevate the competitiveness and added value in the form of fiscal incentive and downstream policy to particular sectors or commodities;(4) strengthening Directorate General of Taxes especially in terms of the budget, human resources, and change the organizational structure; (5) taxation policy to control exciseable goods consumption through customs and excise tariff adjustments; and (6) increasing the efforts to eradicate illegal smuggling and excise.

However, considering the realization of tax revenue in 2014 is still less optimum, extra efforts are needed to be implemented in 2015. In order to implement taxation policies that have been delivered in 2015, government would make additional efforts in order to secure the target of tax revenue in APBNP 2015. Efforts are presented in Table 3.2.

A. Domestic Revenue 1545387,7 1790332,605 1758330,9 98,21252741. Tax Revenue 1146847,4 1379991,627 1489255,5 107,917722. Non-tax Revenue 398540,3 410340,9779 269075,4 65,5736118

B. Grant Revenue 4712,8 3256,313519 3311,9 101,707037

1550100,4 1793588,919 1761642,8 98,218872


TABLE 3.1GOVERMENT REVENUE, 2014−2015

(billion rupiah)

TOTAL

2014Description

2015

APBNLKPP Unaudited % to APBNAPBNP

Chapter 3

3-3



Number Governments Effortsa. Withdrawal from blocked accountsb. Assessment from new accounts opening c.D

Administration Improvement of high resistance tax payers

d.bb

Investigation of mining tax payers by DJP, Bareskrim, and KPK

e.e E-tax invoice Implementation and PKP supervision

f.f Supervision intensification of stamps collection

g. PBB P3 (farm, forest, and mining) Intensification and administration improvement

h. Management intensification of fictitious tax invoice user and issuer

a.a

Tariff and luxury house restriction which is applied PPnBM regulation

b.b Savings and time deposit interest tax regulation

c.ccC

Regulation about PPh Article 22 object of export mining transaction

d.D Regulation about PPh land rent and building

e.E

Regulation about other services which is applied PPh Article 23

f.F Regulation about tariff and DPP VAT of tobacco

g.G Expanding PPh Article 22 object of luxury stuff

h.H

Regulasi tentang pengenaan PPh Pasal 15 atas WP usaha pelayaran Regulation about PPh Article 15 of sailing business

i.II Regulation of DER (debt equity ratio)

j. Regulation revised about general switching transaction

TABLE 3.2 GOVERNMENTS EFFORTS TO INCREASE TAX REVENUE

IN 2015

Step-step

1. Excavation potential tax revenue through tax administration improvement

2.

Excavation tax revenue potential through an effort to improve the regulations related to tax revenue, such as the change of tariffs and the expansion of the tax base



Chapter 3

Meanwhile, in order to encourage investment and to increase industrial competitiveness in the country, government would induce tax incentives in tax charged to the government (PPh DTP) Rp8,180.0 billion for income tax and of import duty charged to the Government Rp1,000.0 billion. Thus the total of DTP incentive in APBNP 2015 is Rp9,180.0 billion.

Tax Revenue TargetIn APBNP 2015, tax revenue is predicted to reach Rp1,489,255.5 billion, increasing Rp109,263.9 billion or 7.9 percent than in APBN 2015. The increase is mainly driven by extra effort through supervision of taxpayer activities, auditing, billing, investigation and extensification new taxpayers. In addition, several changes in basic macroeconomic assumptions, such as high inflation and Rupiah depreciation against US dollar, also lead to the increasing of tax revenue in Rupiah-denominated.

Tax revenue in APBNP 2015 consists domestic tax revenue of Rp1,439,998.6 billion and international trade tax revenue of Rp49,256,9 billion. Tax revenue in 2014, target of APBN 2015, and APBNP 2015 are presented in Table 3.3.

a. Oil and natural gas sector and other derivative business audit process

b. Audit process based on tax payer category

c. Audit of transfer pricing

4.

Increasing the excavation of the potential of all sectors, i.e. manufacturing sector like steel industry, construction and real estate sector, mining sector, plantation sector, financial services sector, health services sector, telecommunications sector. In addition, there is also optimization of center for tax analysis such as to appeal branch offices, to use non-sectoral internal data, as well as group transaction and individual taxpayer

5.

Increasing excavation the potential of the tax revenue in extensification of new tax payers and the imposition of VAT for independent constructing (KMS)


3.

To intensify the law enforcement which was conducted through intensification and repairs examination on the taxpayer and certain business sector

Chapter 3

3-5



In APBNP 2015, income tax (PPh) is predicted to reach Rp679,370.1 billion which consist PPh oil and gas of Rp49,534.8 billion and PPh non-oil and gas of Rp629,835.4 billion. If compared to the target in APBN 2015, target of PPh in APBNP 2015 raises by 5.4 percent or Rp34,974.0 billion which is taken from the PPh non-oil and gas.

PPh Oil and gas in APBNP 2015 decreases by 44.2 percent compared to the target in APBN 2015 and to become Rp49,534.8 billion. The decline is influenced by changes in ICP, oil lifting, and natural gas lifting. Although Rupiah exchange rate againsts US dollar in APBNP 2015 has been depreciated, the increase in revenue in Rupiah denomination is not greater than the decline in revenue caused by a decrease in ICP as well as deacrease in oil and gas lifting. PPh oil and gas in 2014 , APBN 2015 , and APBNP 2015 are served on Graph 3.1.

1. Domestic Tax 1.103.200,0 1.328.487,8 1.439.998,6 108,4 a. Income Tax (PPh) 546.169,8 644.396,1 679.370,1 105,4

1)Oil and Gas 87.445,9 88.708,6 49.534,8 55,8 2)Non-oil and Gas 458.723,9 555.687,5 629.835,4 113,3

b. Value Added Tax 409.173,7 524.972,2 576.469,2 109,8 c. Land and Building Tax 23.477,8 26.684,1 26.689,9 100,0 d. Excise 118.085,4 126.746,3 145.739,9 115,0 e. Other Tax 6.293,3 5.689,1 11.729,5 206,2

2. International Trade Tax 43.647,3 51.503,8 49.256,9 95,6 a. Import Duty 32.318,3 37.203,9 37.203,9 100,0 b. Export Tax 11.329,0 14.299,9 12.053,0 84,3

1.146.847,4 1.379.991,6 1.489.255,5 107,9 Sources: Ministry of Finance

LKPP Unaudited

TOTAL

% to APBN

2015

TABLE 3.3TAX REVENUE, 2014-2015

Description

2014

APBN APBNP

(billion rupiah)

0,0

20,0

40,0

60,0

80,0

100,0

LKPP 2014Unaudited

APBN2015

APBNP2015

57,1 54,2

35,9

30,3 34,5

13,7

Chart Title

Oil Gas

GRAPH 3.1PPh OIL AND GAS, 2014−2015



Chapter 3

In APBNP 2015, PPh non-oil and gas is Rp629,835.4 billion, increases by 13.3 percent compare to the target in APBN 2015. The increase is affected by: (1) extra effort through various strategic steps; (2) depreciation of Rupiah exchange rate against US dollar; (3) high assumption of inflation rate which affect the increase in nominal GDP; and (4) increasing in non-oil and gas PPh taxbase.

The realization of PPh non-oil and gas in 2014 is less optimal, so the baseline shifts to be lower. However, PPh non-oil and gas in APBNP 2015 is targeted to increase, because potential of PPh non-oil and gas is still estimated to be high. The target of PPh non-oil and gas, also has considered PPh DTP incentives with a total Rp8,180.0 billion, consist of PPh DTP for government bonds Rp5,990.0 billion and PPh DTP for geothermal sector Rp2,190.0 billion. PPh non-oil and gas in 2014, APBN 2015, and APBNP 2015 are served on Graph 3.2. Meanwhile, nontaxable income (PTKP) and agencies and a private PPh tax tariff (OP) are presented in Table 3.4. and Table 3.5.

0,0

100,0

200,0

300,0

400,0

500,0

600,0

700,0

LKPP 2014Unaudited

APBN2015

APBNP2015

221,6312,6 321,2

237,1

243,1308,6

Chart Title

Individual Organization

GRAPH 3.2PPh NON-OIL AND GAS, 2014−2015

PTKP UU No. 8 1983

UU No. 10 1994

UU No. 17 2000

KMK No. 564/KMK.03/20

04

KMK No. 137/KMK.05/20

05

UU No . 36 2008

PMK No 162/PMK.011

/2012

- Single PTKP 960.000 1.728.000 2.880.000 12.000.000 13.200.000 15.840.000 24.300.000

- Husband/Wife 480.000 864.000 1.440.000 1.200.000 1.200.000 1.320.000 2.025.000

- Dependents, Max. 3 people 480.000 864.000 1.440.000 1.200.000 1.200.000 1.320.000 2.025.000 Sources: Ministry of Finance

TABLE 3.4GROWTH OF NONTAXABLE INCOME (PTKP)

Tariff Layer (Rp) Tariff Tariff Layer (Rp) Tariff Tariff Layer (Rp) Tariff Tariff Layer (Rp) Tariff

- PPh Individual 0 - 10 million 0,15 0 - 25 million 0,1 0 - 25 million 0,05 0 - 50 million 0,05

10 - 50 million 0,25 25 - 50 million 0,15 25 - 50 million 0,1 50 - 250 million 0,15

> 50 million 0,35 > 50 million 0,3 50 -100 million 0,15 250 - 500 million 0,25

100 - 200 million 0,25 > 500 million 0,3

> 200 million 0,35

- PPh Organization 0 - 10 million 0,15 0 - 25 million 0,1 0 - 50 million 0,1 One Tariff

10 - 50 million 0,25 25 - 50 million 0,15 50 - 100 million 0,15 2009 0,28

> 50 million 0,35 > 50 million 0,3 > 100 million 0,3 2010 0,25


TABLE 3.5GROWTH OF TAX TARIFF AND PTKP

Tax TariffUU No. 8 1983 UU No. 10 1994 UU No. 17 2000 UU No. 36 2008

Chapter 3

3-7



VAT and PPnBM in APBNP 2015 is projected to reach Rp576,469.2 billion or increase 9.8 percent than the target in APBN 2015. This is particularly affected by an increase in inflation assumptions that cause economic transaction value with VAT and PPnBM become higher in nominal. Depreciation on Rupiah exchange rate against US dollar also contributes an increase potential revenue of VAT and PPnBM in 2015. Therefore, it needs adjustments on the target VAT and PPnBM to be higher. The realization of VAT and PPnBM in 2014 APBN 2015, and APBNP 2015 are served on Graph 3.3.

The target of land and building tax (PBB) in APBNP 2015 is estimated at Rp26,689.9 billion or slightly increase compared to APBN 2015 at Rp26,684.1 billion. The increase is caused due to an increase in projection of plantation PBB and forestry PBB which are expected to rise Rp4.8 billion for plantation PBB and Rp1.0 billion for and forestry PBB. Mining PBB projection in APBNP 2015 it is predicted that would be stable as the target in APBN 2015. PBB in 2014, APBN 2015, and APBNP 2015 are presented in Table 3.6.

0,0

100,0

200,0

300,0

400,0

500,0

600,0

LKPP 2014Unaudited

APBN2015

APBNP2015

251,5314,3

358,2

157,6

210,7

218,3

Import VAT and PPnBM Domestic VAT and PPnBM

GRAPH 3.3VAT AND PPnBM, 2014−2015

Trillion Rupiah


LKPPUnaudited

Village PBB 1,8 - -

Urban PBB 1,2 - -

Plantation PBB 1.480,9 1.288,2 1.293,0

Forestry PBB 365,5 338,6 339,6

Mining PBB 1.021,6 1.115,1 1.115,1

Oil and Gas PBB 20.606,8 23.942,2 23.942,2

TOTAL 23.477,8 26.684,1 26.689,9 Sources: Ministry of Finance

TABLE 3.6

(billion rupiah)LAND AND BUILDING TAX (PBB), 2014-2015

Description2014 2015

APBN APBNP



Chapter 3

Excise revenue in APBNP 2015 is predicted to reach Rp145,739.9 billion or increase by 15.0 percent compared with the target in APBN 2015. The increasing is expected to achieve the success from illegal excise eradication and consummation of excise payment with of excise suspension and periodic payment. Excise revenue in 2014, APBN 2015, and APBNP 2015 are presented in Table 3.7.

Other tax revenue in APBNP 2015 the is projected to reach Rp11,729.5 billion, it increases Rp6,040.4 billion or 106.2 percent from the target in APBN 2015. This is caused by an estimation of other tax realization in 2014 that is higher compared to the target APBNP 2014 because high demand of stamp duty which is the biggest component of other tax revenue in 2014, so the baseline for calculating a target in APBNP 2015 is also higher compare to calculation for APBN 2015. In addition, the increasing of other tax revenue has also been influenced by an increase in inflation assumptions in APBNP 2015. Other tax revenue in 2014, APBN 2015, and APBNP 2015 are served on Graph 3.4.

LKPP

Unaudited

Tobacco Excise 112.544,0 120.557,2 139.117,8

Ethyl Alcohol Excise 166,6 165,5 165,5

Ethyl Alcohol Drink Excise 5.341,5 6.023,6 6.456,7

Administration Fine Excise 22,3 - -

Other Excise 10,9 - -

TOTAL 118.085,4 126.746,3 145.739,9 Sources: Ministry of Finance

TABLE 3.7EXCISE REVENUE, 2014-2015

(billion rupiah)

APBN APBNP

2014 2015

Description

0,0

2,0

4,0

6,0

8,0

10,0

12,0

LKPP 2014Unaudited

APBN2015

APBNP2015

6,3 5,7

11,7

GRAPH 3.4OTHER TAX REVENUE, 2014−2015

Trillion Rupiah


Chapter 3

3-9



International trade tax revenue in APBNP 2015 is predicted to reach Rp49,256.9 billion or decrease 4.4 percent compared to APBN 2015. International trade tax revenue consists of import duty and export tax.

Import duty in APBNP 2015 is expected to reach Rp37,203.9 billion, it is equal to the target in APBN 2015. Performance of import duty is influenced by the seven scheme of free trade agreements that have implemented and involve more than 16 countries. The target of import duty in APBNP 2015 includes DTP import duty Rp1,000.0 billion. Import duty in 2014, APBN 2015, and APBNP 2015 are served on Graph 3.5.

Meanwhile, export tax revenue in APBNP 2015 is estimated to reach Rp12,053.0 billion, decreasing by Rp2,246.9 billion or 15.7 percent compared to the target APBN 2015. The decline is mainly caused by low estimate of international CPO price in 2015 within range of USD750-USD800 per metric ton (MT) in line with the trend in 2014. It can be seen from the trend, average price of CPO in 2014 is USD781,0 per MT, it is lower if compared to the previous year’s average which is reach USD789,4 per MT. This pattern is estimated still occuring in the early months of 2015. However, CPO price is expected to rebound because of strengthening policy of biofuel. In addition, strengthening the CPO base industries policy have also affected declining composition of CPO export and its derivatives, so it causes lower export tax of CPO. On the other hand, policy on implementation of tax export for raw mineral concentrates is imposed again in the middle of 2014. It is expected to provide additional export tax. Export tax revenue in 2014, APBN 2015, and APBNP 2015 are served on a Graph 3.6.

3.1.1.2 Non-Tax Revenue (PNBP)Non-tax revenue (PNBP) mostly consists of natural resources revenue, especialy oil and natural gas. This causes non-tax revenue is mostly influenced by macroeconomic assumptions i.e. ICP, exchange rate, oil lifting, natural gas lifting. Macroeconomic assumptions are very influential against natural resources revenue of oil and gas, which is a major source of non-tax revenue. PNBP non-oil and natural gas is not really affected by the basic macroeconomic assumptions,

20,0

22,0

24,0

26,0

28,0

30,0

32,0

34,0

36,0

38,0

40,0

LKPP 2014Unaudited

APBN2015

APBNP2015

32,3

37,2 37,2

Trillion Rupiah

GRAPH 3.5IMPORT DUTY, 2014−2015

GRAPH 3.5IMPORT DUTY, 2014−2015


0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

LKPP 2014Unaudited

APBN2015

APBNP2015

11,3

14,3

12,1

Trillion Rupiah

GRAPH3.6EXPORT TAX, 2014−2015




Chapter 3

hence fluctuations of macroeconomic assumptions does not influence PNBP non-oil and natural gas. Special case for government portion from SOE profits, will decrease along with the decline in pay out ratio policy out ratio policy for some SOEs which involve in development of infrastructure.

ICP growth at the end of 2014 shows declining trend, in line with world oil price. This differs significantly to basic assumptions in APBN 2015 at USD105 per barrel on average. In addition, from production side, oil and natural gas lifting also declines in the target of APBN 2015. In APBNP 2015, ICP is set at USD60 per barrel from USD105 per barrel. While oil and natural gas lifting is estimated at 825 MBOPDand 1,221 MBOEPD.

The government keeps trying to optimize sources of PNBP, which is not from oil and natural gas, in 2015. From non-oil and natural gas, government issues a policy which focused on optimization royalty revenue of minerals and coal mining especially through intensification of billing payment obligation and production supervision. On the other side, optimization of other PNBP incomes as well as income from the management of state owned assets (BLU) is performed through intensification of activities and extensification of PNBP which is managed by K/L.

Non-Tax Revenue TargetPNBP in APBNP 2015 is predicted to reach Rp269,075.4 billion, it is lower Rp141,265.6 billion or decreasing by 34.4 percent from the target in APBN 2015. This is particularly influenced by changes in the basic macroeconomic assumption and PNBP essentials policy that would be applied in 2015. Table 3.8 shows non-tax revenue growth in 2014 and 2015.

In 2015, natural resources revenue is predicted to reach Rp118,919.1 billion, decreasing Rp135,351.3 billion or 53.2 percent from the target in APBN 2015 Rp254,270.5 billion. Decreasing in natural resources revenue is caused by lower natural resources revenue projection of oil and natural gas in line with ICP, oil and natural gas lifting and depreciation of Rupiah

LKPPUnaudited

A. Natural Resources Revenue 242.406,9 254.270,5 118.919,1 46,81. Oil and Gas Revenue 216.876,3 224.263,1 81.364,9 36,3

a. Oil Revenue 141.058,8 170.342,3 61.584,0 36,2b. Gas revenue 75.817,5 53.920,8 19.780,9 36,7

2. Non-oil and Gas Revenue 25.530,6 30.007,4 37.554,3 125,2a. Mineral and Coal revenue 20.858,9 24.599,8 31.678,5 128,8b. Forestry Revenue 3.699,7 4.574,0 4.713,3 103,0c. Fishery Revenue 216,4 250,0 578,8 231,5d. Geothermal Revenue 755,5 583,7 583,7 100,0

B. Government Portion of SOEs Profit 40.314,5 44.000,0 36.956,5 84,0C. Other Non-Tax Revenue 86.219,4 89.823,7 90.109,6 100,3D. BLU Revenue 29.599,6 22.246,8 23.090,2 103,8#DIV/0!

398.540,3 410.341,0 269.075,4 65,6Sources: Ministry of FinanceTOTAL

Description2014

APBN APBNP % thd APBN

2015

TABLE 3.8NON-TAX REVENUE, 2014-2015

(billion rupiah)

Chapter 3

3-11



exchange rate in APBNP 2015. In APBNP 2015, PNBP oil and natural gas is estimated at Rp81,364.9 billion, lower by Rp142,898.2 billion or 63.7 percent from the target in APBN 2015. Furthermore, in APBNP 2015 PNBP non-oil and natural gas is predicted to increase by Rp7,546.8 billion or 25.1 percent from the target of APBN 2015 to Rp37,554.3 billion. PNBP non-oil and natural gas is mainly driven by the rise of minerals and coal mining revenue by Rp7,078.7 billion or 28.8 percent of the target in APBN 2015. It is caused by minerals and coal production optimization policy, higher royalty rate as the result of contract renegotiation between the government with mining contractors, as well as the settlement of account receivable of PNBP based on BPKP audit documents which would be paid in 2015. The target of natural resources revenue in 2014—2015 can be seen on Graph 3.7.

Furthermore, government portion of SOE profits is predicted to decrease by 16.0 percent from Rp44,000 billion in APBN 2015 become Rp36,956.5 billion. The drop in the target of government portion of SOE profits is caused by the government wants to enhance the role of SOE as an agent of development in order to support priority agenda (Nawacita) especially in energy sovereignty, food sovereignty, infrastructure development, and maritime. So the government pursued a policy of payout ratio to support SOE capital especially for capital investment expenditure. The target of government portion of SOE profits in 2014—2015 can be seen on Graph 3.8.

Other non-tax revenue in APBNP 2015 is planned to reach Rp90,109.6 billion, higher by Rp285.9 billion or 0.3 percent compared to its target in APBN 2015. The increase is derived from mining sales which increased by Rp4,467.7 billion or 27.8 percent. In addition, this increase is also driven by improvement of non-tax revenue management, service improvement, and revision of law on tariffs and various non-tax revenue in some ministries/agencies (K/L) so that is expected to raise the target of other non-tax revenue derived from K/L by Rp1,336.6 billion or 2.2 percent.

0

50

100

150

200

250

300

LKPP 2014Unaudited

APBN2015

APBNP2015

216,9 224,3

81,4

25,5 30

37,6

GRAPH 3.7NATURAL RESOURCES REVENUE,

2014−2015Oil and Gas Non-oil and Gas

Trillion Rupiah

30,0

35,0

40,0

45,0

LKPP 2014Unaudited

APBN2015

APBNP2015

40,3

44

36,9

Trillion Rupiah


GRAPH 3.8GOVERNMENT PORTION OF SOEs PROFIT,

2014−2015



Chapter 3

However, in line with a decline in PNBP non-oil and natural gas, domestic income market obligation (DMO) revenue, crude oil is also decreasing by Rp5,518.4 billion or 39.4 percent. Target of other non-tax revenue in 2014 —2015 can be seen on Graph 3.9.

Meanwhile, it is seen from PNBP that came from 6 largest K/L, only non-tax revenue from Ministry of Law and Human Rights that is increasing. In APBNP 2015, non-tax revenue from Ministry of Law and Human Rights increases by Rp222.7 billion or 5.5 percent caused by an increase in e-passport issuance, fiduciary registration, the ratification of the company (PT), legislation, and training of the preparation and legislation based on revision of law on tariffs and various PNBP. The target of non-tax revenue came from 6 largest K/L in 2014 — 2015 can be seen in Table 3.9.

Revenue from public service body (BLU) in APBNP 2015 is also increasing by Rp843.4 billion or 3.8 percent. The increase comes from workgroup in Ministry of Health (BLU Hospital and Health

APBN APBNP

1 Ministry of Communication and Information 10.708,8 12.381,2 12.381,2

2 Ministry of Education and Culture 2.062,2 2.421,5 2.421,5

3 Indonesian National Police 4.795,0 4.358,5 4.358,5

4 Land National Agency 1.765,0 1.936,3 1.936,3

5 Ministry of Law and Human Rights 2.882,0 4.064,8 4.287,5

6 Ministry of Transportation 2.550,7 2.857,8 2.857,8

24.764,1 28.020,7 28.242,8 Sources: Ministry of FinanceTOTAL

2014APBNP

2015

TABLE 3.9NON-TAX REVENUE TARGET OF 6 K/L , 2014–2015

(billion rupiah)

No. Ministries/Agency (K/L)

20,0

30,0

40,0

50,0

60,0

70,0

80,0

90,0

100,0

LKPP 2014Unaudited

APBN2015

APBNP2015

86,289,8 90,1Trillion Rupiah


GRAPH 3.9OTHER NON-TAX REVENUE, 2014−2015

Chapter 3

3-13



Hall) by Rp797.5 billion and Ministry of Religious Affairs by Rp45.9 billion. Moreover, until the end of December 2014, the number of workgroup that implements BLU financial management has reached 156 units. The target of BLU revenue in 2014—2015 can be seen in Table 3.10.

3.1.2 GrantGrant in APBNP 2015 increases by Rp55.6 billion to Rp3,311.9 billion or increases by 1.7 percent of the target in APBN 2015. The target of grants in 2014—2015 can be seen in Graph 3.10.

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

LKPP 2014Unaudited

APBN2015

APBNP2015

4,7

3,3 3,3

Trillion Rupiah


GRAPH 3.10GRANT REVENUE, 2014−2015

LKPP Unaudited APBN APBNP

1 Hospital Services Revenue 9.142,2 7.494,1 8.349,8

2 Education Services Revenue 10.230,3 6.576,4 6.576,4

3 Telecommunication Services Revenue 1.926,8 1.981,9 1.981,9

4 Other BLU Revenue 8.300,3 6.194,5 6.182,2

29.599,6 22.246,8 23.090,2


No.

TOTAL

(billion rupiah)REVENUE FROM PUBLIC SERVICE BODY (BLU), 2014−2015

TABLE 3.10

Description2014 2015



Chapter 3

3.2 Medium-Term Government Revenue ProjectionIn medium term (2016—2018) Indonesia economic growth is projected continue to grow by an average of acceleration 7.0 percent. With a high growth and policies that are designed to optimize government revenue, government revenue is projected to rise significantly and the contribution increases with optimal tax ratio.

Tax revenue in medium term remains to be the main source of government revenue with the average contribution of 86.1 percent from total government revenue. Meanwhile, PNBP contributes 13.9 percent on average, while grants contributes 0.01 percent on average. As the main source of government revenue, government keeps trying to increase tax revenue growth above nominal GDP growth.

In order to support fiscal sustainability, tax revenue policy in the medium term remains focus on income taxation optimization efforts without interfering climate of the investment and business. In medium Indonesia tax ratio attempts to reach 15.2 percent in 2018 (in line with the target of RPJMN 2015-2025). Tax, customs and excise policies for medium term as well as the growth of tax ratio are presented in Table 3.11, Table 3.12, and Table 3.13.

Considering medium term policy and supported by the improving of basic macroeconomic assumption, so tax revenue in the medium term is expected to grow on average of 14 percent a year. In medium term, most of the contribution of tax revenue is derived from PPh, VAT and PPnBM with growth averagely estimated at 15.5 percent for PPh and 16.0 percent for VAT and PPnBM.

Excise revenue in medium term is expected to grow 4.6 percent on average. Factors that influence excise revenue in medium term are: (a) higher excise tariff policy for tobacco; (b) extensification policy goods with excise; and (c) extra effort in terms of the implementation of the eillegal xcise eradication program.

Other tax revenue and PBB are targeted to grow 19.9 percent and 6.3 percent on average in medium term. The recovering global and domestic economy during such period will be followed with intensifying economic transactions that in turn will increase other tax revenue particularly from stamp duty.

Import duty revenue in medium term is expected to increase at 4.9 percent per year on average. Factors that influence import duty are: (a) economic improvement that drives volume of trade import; (b) effective tariff average of import duty as a consequence of FTA; and (c) Rupiah exchange rate againsts US dollar.

Export tax revenue in medium term is projected to rise at 3.5 percent. Factors affecting export tax revenue include: (1) world demand of CPO; (2) CPO price flctuation at international markets; (3) palm oil based industry downstreaming policy that will increase the composition of CPO derivative products; and (4) mineral downstreaming policy (in long term the more domestically processed the lower export tax will be). Medium term tax revenue projection is presented in Graph 3.11.

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3-15



No. Policies

1. Improve cooperation with third party in order to the receipt of data and information economic transactions of extracting the potential

2. Improve cooperation with third parties in order of law enforcement by law enforcement officials and other body

3. The formation of the national institutions of the government revenues4. Implementation measurable risk based analysis 5. Implementation of certain taxpayers investigation 6. Investigation with other party (Joint Audit )7. Gradually increasing the capacity of the examiner

8. Expand the base of the working areas invoice handling tax that is not based on transactions

9. Expand the base of a criminal act in the taxation through “taxing underground economy ” (illegal, legal unreported, and legal reported )

10. Gradually publish taxpayer who was examined in order to give a deterrent effect for other taxpayers

11.

Supervision on payment term12. Enhance quality of NJOP through NJOP equality13. The potential tax revenue of business judgement

14. Optimization sectoral potential project

15. Improvement tax database through digital SPT dan implementation of e-SPT and e-filing

16. E-tax invoice Implementation 17. Enhance the function of KPDE and PPDDP as a data processor unit

18. Cooperation with third parties in the context of the acquisition of data and information on economic transactions, for example cooperation with BI, FSA, BPS, Sucofindo, Ministry of Communication, and Ministry of Trade

19. Tax Clearance with information technology basis

20. Realizing integrated data among government institutions and systemized with information technology

21. Reform the administrative system of VAT, PBB forestry sector, plantation, and mining (PBB-P3) and Stamp Duty

22. Preparation of the draft Law on General Provisions and Tax Procedures (KUP), the draft Law on Land and Building Tax Forestry sector, Plantation, and Mining (PBB-P3) and the draft Law on Stamp Duty

TABLE 3.11MEDIUM TERM TAX POLICY



Chapter 3

23. Continuing improvements in tax regulations that have not been completed in the last year

24. Implement organizational structure of DJP which aims to improve the effectiveness and efficiency of modern tax administration system to encourage the attainment of organizational goals that the state collects from the tax sector and gain public trust

25. Improve the competence and knowledge of tax officials through education and training of employees

26. Flexibility in the implementation of the rules in the field of personnel including the authority to conduct the recruitment and dismissal of employees

27. Improve remuneration and allowance system for employees in order to motivate DJP employees associated with organizational objectives of achieving tax revenue target

28. Formation of investigator function in Directorate of KITSDA29. Enhace coordination and communication in DJP 30. Increase integrated IT capacity 31. Improvement in Business Process through office automation system32. Provide certain flexibility in the framework of the process of transformation

33. Tax counseling focuses on the taxpayers candidate taxpayers, taxpayers, and new registered taxpayers

34. Function optimization of website and call center

No. Policies

1.

Analyzing the publication of information services and optimizing the media to improve the image of DJBC through the development of a new main website and launching media publication through the development of themes and key messages for publication.

2. Completing construction of integrated risk management to import, export, customs, audit, and bonded area to increase inspection accuracy rate (hit rate).

3. Customs and excise system integration with goverment agencies and entities ports or airports.

4. Improving data exchange portal with BI, BPS, DJP, and K/L 5. Implementation of WTO Trade Facilitation Agreement (TFA)

TABLE 3.12MEDIUM TERM EXCISE POLICY

Chapter 3

3-17



6. Implementation of ASEAN Harmonized Tariff Nomenclature (AHTN) in 20177. Implementation of new tobacco excise8. Propose new excisable goods with Fiscal Policy Office9. Propose a new commodity with export tax with Fiscal Policy Office

10.

Organizational alignment, human resources and infrastructure with a mandate of DJBC

11.

Meet the needs of human resources, development of competency-based employees, reward and system consequences, and a clear career path for organizational development

12.

Develop infrastructure are aligned to execute mandate with the use of existing equipment in an optimal and effective provision of new equipment

13.

Building a structure and transparent process in allocating and managing resources

14.

Implementation of tobacco excise tariff and MMEA tariff 15.

Completion of integrated data base import, export, customs, bonded zone, and audit

16.

Explore the potential of international trade taxes through the development of an online system with institutions that record data on the international trade transactions

17.

Mapping and excavation potential excise retail sector18.

Examination of compliance with customs and excise liabilities risk based audit

19.

Implementation of tobacco excise tariff20.

Propose new excisable goods with Fiscal Policy Office

Tax Ratio 2016 2017 2018

Narrow definition (%) 12,97 13,36 13,73Wide definition (%) 14,31 14,49 14,65Sources: Ministry of FinanceDefinition:Narrow definition : Central Tax/GDPWide definition : Central tax, oil and gas, and minerals and coal/GDP

Base Year 2010

TABLE 3.13GROWTH OF TAX RATIO , 2016-2018



Chapter 3

Medium Term Non-Tax Revenue (PNBP)The projection of non-tax revenue from oil and gas in medium term has been considerably subject to basic macro economic assumption including ICP, exchange rate and oil and gas lifting. Based on the latest condition, non-tax revenue is projected to decrease in medium term. The decline in medium term of non-tax revenue is driven by deceleration in revenue as consequences of decreasing trend of oil and natural gas lifting and appreciation of Rupiah exchange rate againsts US dollar in medium term. Although ICP and exchange rate are projected to be stable within that period, oil lifting is projected to decline from 830 MBOPD in 2016 to 700 MBOPD in 2018.

In medium term, the basic macroeconomic assumption that influences oil and natural gas revenue is projected to have a various growth. ICP in medium term is projected to be stable at the level under USD100 per barrel. In the meantime, oil lifting in the medium term is estimated to continue to decline, but natural gas lifting is projected to increase in line with mix energy policy. Rupiah exchange rate againsts US dollar is projected to appreciate at the level around Rp12,000/USD. The condition has led to projection of revenue of oil and natural gas revenue in 2016-2018 with downward trend.

Meanwhile, non-oil and gas revenue coming from mineral and coal mining, forestry, fishery and geothermal is projected to constantly rise at 3.9 percent per year on the average. In general government policy in the medium term in order to optimize mineral coal mining revenue are optimize minerals and coal production, continue renegotiation of working contract (KK) and coal mining concessions works agreement (PKP2B) related to applicable tariff coal mining sector and accelerate the settlement process of unpaid land rent, production fees/royalty and DHPB.

Forestry revenue is expected to grow 1.8 percent on average per year. To reach target of forestry revenue the Government will take long-term like enhance supervision in forestry sector. The Government will continue optimizing industrial plant forests (HTI) and exploring the use of forest areas.

Fishery revenue is also predicted to grow with average 22.3 percent a year. To be able to reach the target, government will conduct policy to increases fisheries non-tax revenue tariff, increase supervision in fishing activity, enhance ability of human resources, and improve administrative

0

500

1000

1500

2000

2500

2016 2017 2018

Trillion Rupiah

GRAPH 3.11TAX REVENUE MEDIUM TERM PROJECTION, 2016-2018

DJBC Revenue DJP Revenue

Chapter 3

3-19



management of non-tax revenue in the fishery sector. In addition, government will also improve fihery non-tax calculation method.

Meanwhile, geothermal revenue in the medium term is projected to grow 7.6 percent on average per year. Government will continue providing tax charged to the Government (DTP) facility for geothermal sector so as to promote investment in geothermal exploration. In addition, monitoring to geothermal exploitation to optimize government revenue will be intensifid.

Revenue from the profit portion of SOEs in medium term is projected to decline in line with government policy in infrastructure development by increasing the role of SOE as agent of development so that Revenue from the profit portion of SOEs in the medium term is estimated to decrease 18.4 percent. Revenue from the profit portion of SOEs is driven by better performance of SOE and pay out ratio SOE dividends based on financial ability. SOE is expected to have space for business expansion, so that it can contribute higher in APBN in the coming years.

In medium term, other non-tax revenue is projected to grow by 1.1 percent. Related to non-tax revenue that is collected by K/L, government will continue extensification and intensification non-tax revenue in medium term, through computation of non-tax revenue potential in K/L and improve regulation related to non-tax revenue, especially law of non-tax revenue tariff in K/L and revision on Law Number 20, 1997 about Non-tax Revenue. Government will also do: (1) conducting a review of the government regulation about tariffs non-tax revenue in each K/L; (2) monitoring and evaluation of the election and management of non-tax revenue; (3) increasing service based information technology and completing database compulsory of non-tax revenue payers; (4) enforcing laws of non-tax revenue management; (5) improving the infrastructure of non-tax revenue producer and high-quality of human resources; and (6) applying online non-tax revenue system (SIMPONI) for non-tax revenue payment.

Within the medium term, BLU is projected togrow by 4,0 percent. The growth in BLU revenue is generally caused by an increase in BLU revenue from workgroup in the area of Ministry of Finance, Ministry of Communication and Information, and Ministry of Public Works and Housing. Tariff adjustment is a step in order to improve service quality. The government will also continue to improve management mechanisms of the BLU revenue to be more accountable. Projection of non-tax revenue in medium term is presented in Graph 3.12.

Grant Revenue ProjectionGrant revenue budgeted in APBN is set based on commitments given by the donors under Memorandum of Understanding (MOU) with the Government of Indonesia. Grant proceeds budgeted in APBN have been devised and only in cash to finance an activity. The proceeds will be

0

50

100

150

200

250

300

350

2016 2017 2018

Trillion Rupiah

GRAPH 3.12NON-TAX REVENUE MEDIUM TERM PROJECTION,

2016-2018

Non-oil and Gas Oil and Gas



Chapter 3

disbursed through KPPN. Grant revenue in medium term is difficult to predict since on few donor countries/organizations available to sign MoU on Grants provision for medium term. According to tentative report of grants to be received by the Government of Indonesia, in medium term, this kind of revenue tends to decline. The grants planned to be received by the Government of Indonesia in such period consist of on-going or multiyear grant for energy and environmental programs such as climate change, emission reduction in urban areas, forest conservation and energy efficiency. Grant revenue projection in medium term is presented in Graph 3.13.

0,0

0,5

1,0

1,5

2016 2017 2018

Trillion Rupiah

GRAPH 3.13GRANT MEDIUM TERM PROJECTION, 2016―2018

Chapter 4

4-1

Changes To The State Expenditure Policies And Projections Of The Medium Term APBN

Financial Note and revised Budget 2015

CHAPTER 4CHANGES TO THE STATE EXPENDITURE POLICIES AND PROJECTIONS OF THE MEDIUM TERM APBN

4.1 GeneralThe process of the making, discussion and ratification of the 2015 APBN that coincided with the national executive and legislative government transition is mandated by Law No. 17 from 2007 on matters that concern the long-term development plans for the period between 2005 and 2025. Taking into account the fact that the 2015 APBN was made by the government in office between the period of 2009-2014, to be implemented by the newly elected president and his cabinet (from the 2014 election), the planning of the 2015 APBN was more baseline, meaning that the budget allocation only takes into account what is absolutely necessary to run the new government and to provide service for the people, such that there is room for change allowed for the new government. As such, the new cabinet formed after the 2014 election can create a better fiscal flexibility and use it to implement their new initiatives, budget allocation; and funding options as promised in the new government’s campaign and in accordance with their visions and missions as written down in the Trisakti and Nawacita through changes in the 2015 APBN. The “Trisakti” summarizes the President’s missions to promote political sovereignty, economic independence; and cultural identity for the people of Indonesia. On the other hand, “Nawacita” is the embodiment of the President’s agendas to bring forth those visions. To accommodate and accelerate these initiatives and priorities as soon as possible, changes to the 2015 APBN need to be worked out faster to balance out the fund allocations with new programs to be implemented to support the visions and missions of the new government. This is also made possible by mandate of Law No. 27 from 2014 about the 2015 APBN, with conditions that necessitate changes to the 2015 APBN.

In matters concerning government expenditure, especially the central government expenditure, changes to the 2015 APBN are made in anticipation to changes in core macroeconomic assumptions and changes to fiscal policies concerning government expenditure that will be undertaken. Those policies are: (1) Consequences to changes in the ministries and other government bodies; (2) Steps to increase the efficiency of government expenditure through for example, the implementation of a fix subsidy for BBM prices that will lessen the burden of subsidy allocation; (3) Changes in policies and fund allocations to accommodate new initiative programs in accordance with the visions and missions of the newly elected government, as elaborated in the Trisakti and Nawacita; and (4) Changes in state fund allocations as stated in Law No. 27 from 2014 concerning the 2015 APBN.

The transfer to region budget and the rural funds in the 2015 APBNP, however, remain more or less the same as stated in the 2015 APBN; and these are directed to increase regional fiscal capacities to ensure good regional governance. To support the new government’s visions and missions, the transfer to region budget and the rural funds in the 2015 APBNP will undergo some minor changes that include the allocation of additional special allocation funds (DAK) to support the priorities of the Kabinet Kerja, rural funds and additional autonomy funds to build infrastructures in West Papua. Changes in rural funds shall also be appropriated by taking into account the number of villages and their citizens, poverty, size of the area and the geographical


Financial Note and revised Budget 20154-2

Chapter 4

area of those villages in accordance with Law No. 6 from 2014 concerning villages. As such, this is done to support the development of Indonesia from the periphery by strengthening peripheral regions and villages within the country.

With respect to policies supporting the achievement of the President’s visions, missions and development priorities in year 2015, the government is making policies to allocate additional spending budget for various programs and priorities; and these are funded, among others, through saving from the BBM subsidy and other efforts to optimize government income. Those additional funds are directed in its use to fund developments in several prioritized sectors (food, energy, maritime), to fulfill some core responsibilities (education, healthcare and housing), to lessen income gap (individual and regional), and to build connecting infrastructures. Those additions to the budget are allocated through the central government expenditure, as well as through the transfer to region budget and the village fund.

Next, to support new initiatives and changes in government expenditure policies, to anticipate the effects of the macroeconomic condition, and to maintain the implementation of the 2015 APBN, changes to numbers included in the 2015 APBN including government expenditure is urgently needed. Those changes are done in an effort to keep the balance of achieving several key matters like the acceleration of growth and the achievement of other developments, while keeping the fiscal balance in the mid- and long term. Through those adjustments, the government expenditure budget is anticipated to maintain its efficiency, effectiveness, feasibility and can also keep on supporting other economic development targets in 2015. The 2015 APBNP was planned, keeping in mind the balance of the targeted macroeconomic achievement, which is the acceleration of growth coupled with a fiscal balance.

Based on policies and those said changes, government expenditure budget in the 2015 APBNP is Rp1,984,149.7 trillion; a decrease of Rp55,333.9 trillion (2,7% of the spending allocation in the 2015 APBN). These changes are summarized in Table 4.1.

Nominal %

I. CENTRAL GOVERNMENT EXPENDITURE 1.196.989,8 1.392.442,3 1.319.549,0 (72.893,4) (5,2)

1. Line Ministries Expenditure 570.587,0 647.309,9 795.480,4 148.170,5 22,92. Non Line Ministries Expenditure 626.402,8 745.132,4 524.068,6 (221.063,8) (29,7)

e.g. a. Debt Management Program 133.440,8 151.968,3 155.730,7 3.762,4 2,5b. Subsidy Management Program 391.962,5 414.680,6 212.104,4 (202.576,2) (48,9)

1) Energy Subsidy 341.810,4 344.702,8 137.824,0 (206.878,8) (60,0)2) Non Energy Subsidy 50.152,1 69.977,7 74.280,3 4.302,6 6,1

II. 573.702,9 647.041,3 664.600,7 17.559,5 2,71. Transfer to Region 573.702,9 637.975,1 643.834,5 5.859,5 0,92. Rural Fund 0,0 9.066,2 20.766,2 11.700,0 129,1

GOVERNMENT EXPENDITURE 1.770.562,3 2.039.483,6 1.984.149,7 (55.333,9) (2,7)

Sumber: Kementerian KeuanganSource: Ministry of Finance

APBNPChanges

TRANSFER TO REGION AND RURAL FUND

TABLE 4.1GOVERNMENT EXPENDITURE, 2014 - 2015

(billion Rupiah)

Details

2014 2015

LKPP Unaudited APBN

Chapter 4

4-3



4.2 Changes in Policies and The Central Government Ex-penditure Budget for 2015Through close inspection of the macroeconomic development after the making of the 2015 APBN, as well as its projection throughout 015, core macroeconomic assumptions in the 2015 APBN are projected to have a significant deviation. This is one of the factors that necessitate the adjustment of the central government expenditure budget for the 2015 APBN, so that its size and allocation can stay credible and rational. Core macroeconomic assumptions that have undergone big changes and are influencing the central government’s spending are mainly the assumption on the Rupiah exchange rate and crude oil prizes. The Rupiah exchange rate to USD is projected to face a depreciation from Rp11,900 per USD in the 2015 APBN to Rp12,500 per USD. Meanwhile, crude oil price that was assumed to be USD 105 per barrel is projected to decrease to USD60 per barrel. Changes to the assumption of the Rupiah exchange rate will mainly have a big influence on the allocation of payment of debt interest and energy subsidy. Changes to crude oil prices will likely influence the size of the energy subsidy, especially BBM subsidy.

To effectively and efficiently support the government’s visions and missions, changes have been made to the organizational structure in the cabinet as needed. To do that, several changes have been made by re-organizing several K/L in the Kabinet Kerja through the creation of new K/L, full or partial merger of various K/L and division of some K/L that can be seen through several changes to the naming of those K/L. This needs to be followed by an adjustment in the budgeting.

Efforts to increase efficiency have also been done through reorganizing of the spending structure by decreasing less productive spending and reallocating those funds for more productive spending that can accelerate the achievement of the government’s development targets. Those efforts are done, among others, through the refocusing of savings on travel and meeting packages to be reallocated to fund other national priorities that are more productive within the different K/L. The government has also saved on petroleum (BBM) subsidy through new schemes like the BBM fixed subsidy that can also minimize fiscal dependence on fluctuations of crude oils prices and the rupiah exchange rate, while still providing a subsidy for those who really need it.

Those efforts to increase efficiency are projected to create a new fiscal space that can be used to fund other more productive programs to achieve targets and development priorities as elaborated in the Trisakti and Nawacita. Those prioritized programs are funded mostly through the central government expenditure and can be categorized into: (1) Development of important sectors, like development directed to increase and maintain food sovereignty, develop the energy and electricity industry, maritime and tourism and the development of industries; (2) Activities to fulfill core responsibilities of the government such as the citizens’ rights to have accessible education through the Kartu Indonesia Pintar (KIP), accessible healthcare through the Sistem Jaminan Sosial Nasional (SJSN), from the demand side through the Kartu Indonesia Sehat (KIS) and from the supply side, as well as accessible housing; (3) Programs directed at decreasing the income gap; the individual income gap through citizen empowerment programs, and regional income gap through the development of peripheral regions and its market, as well as regional economic centers; (4) Development of connecting infrastructures to improve on economic and transport ease; and (5) other prioritized programs.

Aside from those policy changes, changes to the central government expenditure in the 2015 APBNP is also caused by several changes to the budget due to limitations on the use of PNBP/BLU, debts and grants, SBSN PBS and reallocation from BA BUN to BA K/L.



Chapter 4

Due to those development and changes in policies, the central government expenditure budget in the 2015 APBNP is projected to reach Rp1,319,549 trillion, 22.3% of the PDB. This is a decrease of Rp72,893.4 trillion or 5.2% compared to the central government expenditure budget in the 2015 APBN, which was projected to be Rp1,392,442.3 trillion.

This change in the central government expenditure budget in the 2015 APBNP was made pos-sible through the increase of several components and the decrease of several other components of the central government expenditure. These changes to the spending include, among others: (1) Changes through BUN caused by adjustments to the core macroeconomic assumptions and effects of government policies like a decrease in the allocation of energy subsidy and an increase in the budget to pay off debt interests; (2) Changes in spending through K/L spending in the form of additional funding for programs/ priorities like the development of several key sectors, the fulfillment of basic responsibilities to the people and a decrease in income gap; and (3) Changes mandated by article 15 Law No. 27 from 2014 about the 2015 APBN like budget revision due to limitations on the use of the PNBP/BLU, debts and grants, SBSN PBS and the reallocation from BA BUN to BA K/L.

As mandated by article 11 point (5) Law No. 17 from 2003 about the state finance and in to fol-low up on the decision of the constitutional court No 35/PUU XI/20013 dated the 22nd of May 2014, the state government expenditure budget is planned according to the different functions, organizations and programs. The following will elaborate more on the changes in spending based on the functions and organization in the 2015 APBNP.

4.2.1 Changes to The Central Government Expenditure Budget by Function

In Law No. 17 from 2003 about the state finance, especially in article 11 point (5) and in the decision of the constitutional court No 35/PUU-XI/2013, it is stated that the central government expenditure budget can be categorized by its function and organization. The categorization by function involves 11 different functions that encapsulate various aspects of good governance to provide service to the people and to increase the wellbeing of the people. These 11 functions are: (1) The function of public service; (2) The function of defense; (2) The function of public order and safety; (4) The function of economy; (5) The function of environment; (6) The function of public housing and facilities; (7) The function of public healthcare; (8) The function of tourism; (9) The function of religious; (10) The function of public education; and (110 The function of social protection and justice. In the 2015 APBNP, the central government expenditure budget according to function is Rp1,319,549.0 trillion, a decrease of Rp72,493.4 trillion or 5.2% from its allocation in the 2015 APBN, which was Rp1,392,442.3 trillion. This decrease in budget allocation is caused mainly by a decrease in the budget allocation for the function of public service.

This allocation of the central government expenditure budget according to functions in the 2015 APBNP is elaborate is summarized in Table 4.2 and elaborated below.

Chapter 4

4-5



Budget for Public ServiceCentral government expenditure budget allocation for public service in the 2015 APBNP is Rp695,286.3 trillion, a decrease of Rp196,482.2 trillion or about 22.0% compared to its allocation in the 2015 APBN, which was Rp891,768.4 trillion. This decrease in the budget allocation for public service is caused mainly by the government’s effort to increase their spending efficiency through various efforts of refocusing programs, including efforts to minimize unproductive spending in the running of the government like the meeting and travel packages. Also significant was the decrease in the projected burden of energy subsidy due to the pricing policy implemented by the government whereby there was a change in the BBM subsidy to a fixed subsidy ofRp 1000 per liter for diesel. However, the government continues to strive to increase the quality and target achievement of their public service. These services include, among others, an expansion of the inclusivity of the PBI for the free public healthcare services (JKN) that extend services to social welfare recipients (PMKS) and poor convicts through the Kartu Indonesia Sehat (KIS). Also there were efforts to increase the quality and target orientation for social programs through verification processes and validation of the PPLS survey. Results from that PPLS are used as the baseline (BDT) for various social programs.

The development target from public services in 2015 are: (1) An increase in the quality of public service, supported by a professional service management, SDM with integrity, the implementation of a standard minimal service and a comprehensive census data; (2) Achievement of BBM subsidy according to the set target; (3) Providing affordable electricity for the people; (4) Allocation of food subsidy and provision of subsidized rice for targeted households (RTS); (5) Allocation of fertilizer and seed subsidy in the form of providing fertilizers and seeds for farmers; (6) Allocation of public transportation subsidy for train and ship passengers in the economy class; and (7) An increase in the implementation of good governance in various government bodies through a united, whole, integrated, and accountable performance that uphold the law.

Nominal %

01 GENERAL PUBLIC SERVICES 7 97 .124,7 891.7 68,4 695.286,3 (196.482,2) (22,0)

02 DEFENSE 82.145,0 96.823,9 102.27 8,6 5.454,7 5,6

03 PUBLIC ORDER AND SAFETY 34.805,8 46.137 ,9 54.681,0 8.543,2 18,5

04 ECONOMIC AFFAIRS 95.952,1 143.525,7 216.290,6 7 2.7 64,8 50,7

05 ENVIRONMENTAL PROTECTION 9.145,7 10.67 9,5 11 .7 28,1 1 .048,6 9,8

06 HOUSING AND COMMUNITIES AMMENITIES 26.126,9 20.465,8 25.587 ,2 5.121,5 25,0

07 HEALTH 10.850,0 21.113,2 24.208,5 3.095,3 14,7

08 TOURISM AND CULTURE 1.469,0 1 .926,2 3.7 65,5 1 .839,3 95,5

09 RELIGION 4.009,6 5.289,6 6.920,5 1 .630,9 30,8

10 EDUCATION 122.367 ,6 146.392,8 156.186,9 9.7 94,1 6,7

11 SOCIAL PROTECTION 12.993,5 8.319,5 22.615,8 14.296,3 17 1 ,8

1.196.989,8 1.392.442,3 1.319.549,0 (7 2.893,4) (5,2)

Source: Ministry of Finance

TABLE 4.2

CENTRAL GOVERNMENT EXPENDITURE BY FUNCTION, 2014 - 2015(billion Rupiah)

NO. FUNCTION LKPP Unaudited

APBN APBNP Changes

2015

T O T A L

2014



Chapter 4

Budget for DefenseCentral government budget allocation for the defense function in the 2015 APBNP is Rp102,278.6 trillion, an increase of Rp5,454.7 million or 5.6% of its allocation in the 2015 APBN, which was Rp96,823.9 trillion. This increase of budget allocation for defense is mainly caused by budget allocation to strengthen the force to reach the minimum essential force (MEF) with the support of the domestic defense industry.

This allocation for defense is hoped to achieve the following targets: (1) An increase in the wellbeing and thus, the professionalism of soldiers through an increase in housing facilities for soldiers and through an increase in quality and quantity of training for TNI personnel; and (2) Strengthening of maritime and border territories through an increase in security and safety operations in maritime and border territories, by adding posts in land border territories, by strengthening maritime agencies and by intensifying joined domestic and international operations.

Budget for Public Order and SafetyCentral government budget allocation for public order and safety in the 2015 APBNP is Rp54,681.0 trillion, an increase of Rp8,543.2 trillion or 18.5% from its allocation in the 2015 APBN, which was Rp46,137.9 trillion. This increase in the budget allocation for public order and safety is used to support maritime guarding operations in border areas to strengthen the safety of such border territories; and also to build facilities and supporting facilities for better enforcement of the law through building a storage facility for seized properties (Rupbasan) and by building jails (Lapas) for minors.

This budget allocation for public order and safety is hope to achieve the following targets: (1) Achieving Almatsus POLRI that is supported by the defense industry through the ALPALKAM POLRI; (2) increasing the wellbeing and thus, the professionalism of the police force through improvements of healthcare for the POLRI; (3) Increasing public trust for the PLRI through the implementation of quick response and quick wins, a strengthening of community policing, an increase in the ability to handle flash point, and developments in police technology through the empowerments of the litbang function; (4) Strengthening intelligence through the development of the intelligence data sharing system between different state intelligence agencies; (5) Increasing the coordination of the intelligence function by BIN as the single client agency for the President; and (6) Strengthening drug prevention and eradication through the implementation of enforcement, eradication, misuse and illegal distribution of drugs (P4GN), information dissemination on the dangers of drugs through various media, strengthening of therapy and rehabilitation institutions; and an increase in drug-related intelligence gathering.

Budget for EconomyCentral government budget allocation for the economy in the 2015 APBNP is Rp216,290.6 trillion, an increase of Rp72,764.8 trillion or 50.7% from its allocation in the 2015 APBN, which was Rp143,525.7 trillion. This significant increase is caused mainly by a sharpening and strengthening of programs that are the government’s priority to accelerate and improve the quality of economic growth like through the building of connecting infrastructures like railroad infrastructures outside the island of Java, maritime infrastructures, energy and electricity.

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Developments in those infrastructures are done to support the national logistic system and to support the development of national industry and tourism to accelerate economic independence for the domestic economic sectors.

Infrastructure building is also directed to decrease income gap, be it individual or regional through the building of productive economic facilities and through the development of border territories through the development of roads in those areas, and also by increasing the development of airports in remote areas. Infrastructure development is also done for supportive economic facilities like traditional markets.

Moreover, the change in the budget allocation for the economy is also caused by the government’s effort to increase food sovereignty and economic resilience through activities that increase the productivity of farming and food production such as improvements and developments of irrigation infrastructure around silo storage areas, revitalization of existing dams and building of new dams, provision of seeds and fertilizers; and building of new reserve areas.

A few indicators of the development target of the 2015 economy functions can be seen in Table 4.3.

Budget for the EnvironmentCentral government budget allocation for the environment in the 2015 APBNP is Rp11,728.1 trillion, an increase of Rp1,048.6 trillion of 9.8% of its allocation in the 2015 APBN, which was Rp10,679.5 trillion. This increase if the budget allocation for the environment is mainly caused by the “gerakan cinta laut” (loving the ocean movement) and the rehabilitation of the coastal region of the Pantura Java by planting 3 million mangroves, the rehabilitation of damages in coastal and oceanic areas, increasing the maritime conservation area and by designing the architecture for costal regions.

Development targets that are hoped to be achieved from the budget for the environment in 2015 are: (1) Achieving the preservation of biological diversity in protected areas, agro ecosystem and non-protected areas; (2) Achieving the usage of a sustainable bio diversity for economic activities; (3) Increasing the environment quality mirrored by am environment quality index of 64.5; and (4) Strengthening efforts to handle climate changes (mitigation and adaptation) and a climate and weather warning system.

Budget for Public Housing and FacilitiesCentral government budget allocation for public housing and facilities is Rp25,587.2 trillion, an increase of Rp5,121.5 trillion or 25.0% from its allocation in the 2015 APBN, which was

No TARGET

1. 23,62. 5-63. 6,74. < 95. < 14,2

Interperiod necessities goods' price coefficient variation (%)Interregion necessities goods' price coefficient variation (%)

Source: RKP year 2015

TABLE 4.3DEVELOPMENT OBJECTIVES ON ECONOMIC FUNCTION

OBJECTIVES

National logistic expense ratio to GDP (%)Average dwelling time (day)Real GDP growth in wholesale and retail trade subsector (%)



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Rp20,465.8 trillion. This increase in the budget for public housing and facilities is mainly caused by the implementation of new priority activities like: (1) Development of drinking water; (2) Development and restructuring of residential areas; (3) Development of settlements; (4) Building of subsidized high-rise apartments (Rusunawa); (5) Development of housing for TNI personnel; and (6) Development of facilities for POLRI (official residence, hostels and barracks).

Targets that are hoped to be achieved by the public housing and facilities budget in 2015 are: (1) Increasing facilities for new provision of livable dwelling for low-income families (MBR); (2) Building of Rusunawa for MBR; and (3) Increasing facilitation for the improvement of public housing

Budget for Public HealthcareCentral government budget allocation for public healthcare in the 2015 APBNP is Rp24,208.5 trillion, an increase of Rp3,095.3 trillion or 14.7% from its allocation in the 2015 APBN, which was Rp21,113.2 trillion. This increase in budget allocation for public healthcare is mainly caused by fulfillment of means, infrastructures and equipment for national and regional reference hospitals in an effort to strengthen the healthcare supply side to support the implementation of an optimal healthcare SJSN.

And the following are targets that are hoped to be achieved in public healthcare: (1) Increasing the quality of mother-and-child care and reproduction; (2) Increasing handling quality of the people’s nutrition; (3) Increasing the effectiveness of food and medication safety, as well as their quality and benefits; (4) Increasing the restructuring and supervision on environmental qual-ity; (5) Educating the people and strengthening their healthcare SDM; and (6) Increasing the number of people with access to healthcare insurance, especially by having a good healthcare facility to meet the demands.

Budget for Tourism and the Creative IndustryCentral government budget allocation for tourism and the creative industry in the 2015 APBNP is Rp3,765.5 trillion, an increase of Rp1,839.3 trillion or 95.5% of its allocation in the 2015 APBN, which was Rp1,926.2 trillion. This increase in budget allocation for tourism and the creative industry is mainly caused by efforts to strengthen the government’s prioritized programs to support and increase development in tourism This is done through an increased marketing development to promote Indonesia’ tourism domestically and internationally, development of the market and tourism information and increasing the tourism image.

This budget allocation for tourism and the creative industry is hoped to achieve the following targets: (1) Increasing tourism contribution to the quality and quantity of the national workforce; (2) Increasing investment in the tourism sector; (3) Increasing tourist expense and foreign exchange in Indonesia; (4) Increasing the quantity of international tourists in Indonesia; (5) Increasing the business unit of the creative industry to the overall business unit; (6) Increasing the quantity and quality of tourism-related higher education; (7) Increasing the professionalism of workers in the tourism sector and in the creative industry; and (8) Increasing the content quality and the network in the creative industry.

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Budget for Religious AffairsCentral government budget allocation for religious affairs in the 2015 APBNP is Rp6,920.5 trillion, an increase of Rp1,630.9 trillion or 30.8% from its allocation in the 2015 APBN, which was Rp5,289.6 trillion. The increase in the budget allocation for religious affairs is mainly caused by the strengthening of the Islamic community guidance program.

Targets hoped to be achieved through this budget allocation in 2015 are: (1) Increasing the quality of religious understanding and practice among the people; (2) Promoting a harmonic and peaceful social life among the different religions; (3) Increasing services in religious life of the people; (4) Increasing the quality of professionalism in organizing the Hajj, so that it can go on smoothly; and (5) Increasing the quality of governance in religion.

Budget for Public EducationCentral government budget allocation for public education in the 2015 APBNP is Rp156,186.9 trillion, an increase of Rp9,794.1 trillion or 6.7% of its allocation in the 2015 APBN, which was Rp146,392.8 trillion. This increase in budget allocation for public education is to fulfill the government’s basic responsibilities to provide the people with access to free education through an expansion of the KIP by adding 10.5 million eligible students, approved by the Education Ministry and the Ministry for Religious Affairs.

This budget allocation is hoped to achieve the following targets: (1) Increasing the people’s level of education; (2) Increasing the number of years students above 15 years old stay in school; (3) Increasing the number of literate students above 15 years old; (4) Increasing the enrolment in SD/MI and APM SMP/MTs; (5) Increasing the gross enrolment in SMA/SMK/MA/Packet C and in PT (19-23 years old); (6) Increasing the quality of education relevance; and (7) Increasing the qualification and competency of teachers, lecturers and other educators.

Budget for Social ProtectionCentral government budget allocation for social protection in the 2015 APBNP is Rp22,615.8 trillion, an increase of Rp14,296.3 trillion or 171.8% from its allocation in the 2015 APBN, which was Rp8,319.5 trillion. This increase in budget allocation for social protection is mainly cause by government policies directed to comprehensively strengthen social protection for the people and by an acceleration of poverty reduction in an effort to lessen the individual income gap. This is done through the following programs: (1) Implementing the prosperous family savings program (PSKS) through the Kartu Keluarga Sejahtera (KKS) that targets specific households (RTS) including those with welfare problems (PMKS); (2) Helping stimulate productive economic sectors; and (3) Implementing the Keluarga Harapan program (PKH) by targeting very poor families (KSM).

This budget allocation is hoped to achieve the following targets: (1) Making policies to implement gender equality (PUG) in the workforce, especially for women working in development; (2) Implementing PUG policies in education, healthcare, politics and decision making, implementing PUG policies and protection for women from acts of violence and protection policies for victims of human trafficking; (3) Increasing effectiveness in child protection from violent acts by making and harmonizing various law and policies; (4) Increasing individual, household and community wellbeing, especially for the poor and needy; and (5) Increasing the consolidation of programs directed at poverty alleviation.



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4.2.2 Changes to the Central Government Budget Allocation According to Organizations

Central government expenditure is generally categorized into two parts: (1) Budget allocation through K/L spending (BA K/L) by the K/L leaders as the Chief Operational Officer; and (2) Budget allocation through non K/L spending, also called the general treasurer budget (BA BUN) that is allocation through the Finance ministry as the Chief Financial Officer.

To keep the APBN adjustment in line with development and/or changes in the core fiscal policies that shifts inter-organizational and inter-program budgeting, the government is administering a change in spending according to the organization, so that the central government can keep on functioning well and accountably as mandated by the law. Changes are made in budget alloca-tion through the K/L as users, as well as through the Finance Ministry as the general treasurer.

From the central government budget allocation of Rp1,319,549.o trillion in the 2015 APBNP, the budget allocated through the K/L is 60.3% or Rp795,480.4 trillion. The remaining 39.7% or Rp524,068.6 trillion is allocated through the BA BUN (non K/L spending). More detailed explanation of this allocation through the BA K/L and BA BUN is shown in table 4.1

4.2.2.1 Budget Allocation Changes to the K/L BudgetThe K/L budget allocation outlined in the 2015 APBN was baseline, in the sense that only the absolute necessity to run the government and provide public services was considered, with an output service delivery that was the same as for year 2014, and only the most baseline budget for national output programs was included. In line with the formation of the new government for the period between 2014-2019, this needed to be reorganized in accordance with the new President’s visions and mission, while still keeping track of targets in the RPJPN 2005-2025. These adjustments directly influence the government’s spending, including spending allocated through K/L, such that there is a need to propose a change from the 2015 APBN to the DPR for further discussions.

Generally, K/L spending changes in the 2015 APBNP is caused by several factors, like: (1) Changes to the structure of various K/L that caused the creation of new K/Ls and changes in the naming of a few K/Ls; (2) Budget increase for priority programs in several K/Ls to meet the target of the President’s visions and mission; (3) Changes in funding sources from several programs to be implemented by various K/Ls; and (4) Reallocation of fund from BA BUN to BA K/L. These changes will be elaborated below.

Shortly after being elected, the President formed the Kabinet Kerja for the period of 2014-2019 with different ministries structures from the previous government. There is the creation of one new ministry and changes to the naming of several others as a result of merger and/or division of some ministries with the hope of supporting the President’s visions and missions. These changes brought about consequences and budget shifts between the different ministries and programs. A more detailed explanation can be found in Box 4.1.

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Box 4.1Changes to the Nomenclature within Kabinet Kerja

The forming and changes to ministries under the Kabinet Kerja as mandated by presidential decree No. 121/P from 2014 about the forming of ministries and the appointment of the Kabinet Kerja for the period between 2014-2019 and Presidential decree No. 165 from 2014 about job and function regulation of the Kabinet Kerja has caused changes to the responsibilities and functions between the different ministries and government bodies. Responsibilities and functions for the K/L in the period between 2010-2014 were based on presidential decree No. 24 from 2010 about the status, responsibilities and functions of ministries and the organization, responsibilities and function of Echelon I of the ministries as adjusted several times, but last through presidential decree No. 135 from 2014 about the seventh amendment to presidential decree No. 24 from 2010 about the status, responsibilities and function of ministries and the organization, responsibilities and function of Eselon I of the ministries. The K/L that have undergone changes in names are as follows:

In presidential decree No. 165 from 2014, the organization of the Kabinet Kerja is to be completed by 4 months after the issuance of presidential decree No. 165 from 2014 (27th February 2015). During that transition, responsibilities and function of the K/L are to use monetary and budget resources according to their responsibilities.

Steps that need to be done by K/L in the implementation of the 2015 budget are as follows:

1. K/L are to make Renja K/L and DIPA TA 2015 (for new K/L) or they are to revise the Renja K/L and DIPA TA 2015 (for K/L with or without changes to their naming) to support new programs.

2. The making of revision to DIPA TA 2015 must first seek consent from the DPR for:

a. Programs and budget for new K/L (Coordinating ministry for the maritime sector and other K/L with changes to their naming).

b. New programs or shifts in inter-program budgeting for K/Ls with or without changes to their naming.

DIPA revisions and their approval from the DPR are projected to be done by the end of 2014, such that K/L programs can function smoothly at the beginning of 2015. If there are pending approvals until the 1st of January 2015, budget can only be disbursed for civil servant salary and allowances, as well as for programs that have not undergone any changes (already have approval from the DPR).

In the making of the 2015 APBNP, the government is proposing changes/shifts of interdepartmental and interprogram budget, especially for new K/L and K/L with changes to their naming. For a clearer picture, the following table elaborates on the allocation of K/L spending in the 2015 APBN for K/L with their old and new nomenclature.



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Meanwhile, to support the President’s visions, missions and development priorities in 2015, the government is taking an initiative to allocate additional spending fund for several programs and prioritized activities. This is funded from savings of BBM subsidy caused by the cancelation of premium gasoline for 2015; and other efforts to optimize government income. This is in line with the 2015 APBN planning, which was baseline in nature and has not taken into consideration programs and activities that include the new President’s visions and missions. This increase in budget allocation is directed at several programs like: (1) Development of superior sectors like food, energy, maritime, tourism and industry; (2) Fulfillment of basic responsibilities in public education (through KIP), public healthcare (through KIS and SJSN healthcare in the supply side), and in public housing; (4) Decreasing individual income gap through KKS, development of sustainable living and PKH; (4) decreasing regional income gap through development of peripheral regions and the traditional market; and (5) Development of connecting infrastructures.

Moreover, changes to the K/L spending in the 2015 APBNP are also caused by: (1) Changes in budget resources from PNBP and BLU due to changes in target and limitation of its use in several K/L; (2) Changes in budget resources from changes/acceleration of foreign debt and grant payment, as well as changes in the SBSN PBS in several K/L; (3) reallocation of spending from BA BUN to BA K/L that includes reallocation of civil servant spending in line with bureaucratic reforms and other policies. K/Ls that are undergoing changes to their budget resources and reallocation of BA BUN in the 2015 APBNP are listed in Table 4.4.

Also, in accordance with those changes, the government is also working in increasing the quality of spending (efficiency and targeting of spending allocation) through saving policies on travel and meeting packages for civil servants. These savings are then directed for use to fund other

A. Performance Allowance (Personel Expense)

B. Other Activities

1 Ministry of Religious Affairs 1 Ministry of Home Affairs 1 Coordinating Ministry on Economic 1 Ministry of Social Affairs

2 Ministry of Health 2 Ministry of Transportation 2 Supreme Court 2 Ministry of Trade

3 Ministry of Law and Human Rights 3 Ministry of Education and Culture 3 Development Finance Contriller Agency 3 Ministry of Youth and Sports

4 Ministry of Energy and Mineral Resources

4 Ministry of Health 4 Ministry of Law and Human Rights 4 National Agency for Narcotics

5 Ministry of Maritime and Fisheries 5 Ministry of Religious Affairs 5 Ministry of Finance 5 Ministry of Home Affairs

6 Ministry of Home Affairs 6 Ministry of Public Works and Housing 6 Attorney General 6 Coordinating Ministry on Human Development dan Culture

7 Ministry of Environment and Forestry 7 Indonesian National Police 7 National Comission on human Rights

8 Indonesian Academy of Sciences 8 General Election Comission

9 Coordinating Ministry on Politics, Law and Security

9 Ministry of Religious Affairs

10 Ministry of Energy and Mineral Resources

10 Judicial Commission

11 Ministry of SMEs

12 Ministry of SOE

13Agency of Assessment and Aplication of Technology

14 National Agency for Disaster Mitigation

TABLE 4.4

LINE MINISTRIES WITH CHANGING SOURCE OF FUNDING

AND REALOCATION ON GENERAL TREASURY ACCOUNT IN APBNP 2015

CHANGE IN PNBP/BLU CHANGE IN PLN/HLN/SBSNREALOCATION ON GENERAL TREASURY ACCOUNT

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programs/activities in the respective K/L that are more strategic, productive and in line with the President’s refocusing effort. These policies are undertaken while still keeping and maintaining performance targets of the respective K/L. Because saving policies and refocusing proposals are done by individual K/L, these policies will not cause changes in the spending budget of the K/L as a whole.

Based on these facts, the central government expenditure budget that is manages by the K/L in the 2015 APBNP is Rp795,480.4 trillion, an increase of Rp148,170.5 trillion or 22.9% of the limitation on K/L spending allocation in the 2015 APBN, which was Rp647,309.9 trillion. These changes in K/K spending in the 2015 APBNP are listed in Table 4.5.

Also, changes to spending budget of several K/L, especially those in accordance with additional priority budgeting for the President’s priority agendas are elaborated below.

Ministry of Public Works and Public HousingAs mandated by presidential decree No. 165 from 2014, the ministry of public works and public housing is a merger of 2 previously separate ministries: the ministry of public works and the ministry of public housing (see Box 4.1 for reference). Spending budget for the ministry of public works and public housing in the 2015 APBNP is Rp118,546.1 trillion , an increase of Rp33,633.9 trillion from its allocation in the 2015 APBN. This increase is caused mainly by an additional priority spending budget as seen in Table 4.6.

NO DETAILS TOTAL

647.309,9

148.170,5

1 Changes in PNBP use 1.130,4

2 Changes in BLUceiling budget 843,4

3 Changes in Foreign Loan source 1.033,8

4 Changes in grant (437,4)

5 Changes in SBSN (316,1)

6 Realocation from General Treasury Account 15.975,7

a. Reserve for performance allowance of some line ministries 8.012,5

b. Other reserves to some line ministries 7.963,2

7 Other changes (360,1)

8 Additional priority budget 113.976,8

9 Additional budget from discussion 16.324,0

795.480,4


APBNP 2015

TABLE 4.5 CHANGES IN LINE MINISTRIES BUDGET IN APBNP 2015

(billion Rupiah)

APBN 2015

CHANGES



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Ministry of TransportationThe Ministry of Transportation’s budget for the 2015 APBNP is Rp64,954.1 trillion, an increase of Rp20,020.2 trillion from its limitation in the 2015 APBN. This increase is almost wholly caused by the additional budget for prioritized programs/activities. This increase is elaborated in Table 4.7.

No.

I Development of food security sector in the amount of Rp8,450.8 billion for:- Irigation development and management- Rehabilitation of dam/dike- Flood management and shore safeguard - development of standardize water to support clean water prov ision

II Basic needs fulfillment in the amount of Rp9,108.0 miliar, among others:A Improvement of quality of liv ing

- Drinking water development- Improvement of housing sanitary - Improvement of slump area

B Vertical housing, special housing and improvement of housing quality- Downpay ment aid (for 55 thousand beneficiaries)

III Reducing regional disparity in the amount of Rp11,450.6 miliar, for:- Road Infrastructure development- development of border region road (Kalimantan and NTT)

IV Connectiv ity infrastructure in the amount of Rp4,299.4 miliar, among others:- Toll road development (government mandatory )- Port access development (Sorong, Kuala Tanjung, dan Maloy )

TABLE 4.6ADDITIONAL ALLOCATION FOR PRIORITIES BUDGET

MINISTRY OF PUBLIC WORKS AND HOUSING

DET AILS


No.

I

-

-

II Reducing disparity in the amount o, Rp2.141.6 billion, for:A Interclass income, including:

-- Procurement of multipurposes training ships of 6 unit- Procurment of training plane of 51 unit and spareparts

B Interregional, including:- Development of border and disaster vulnerable area

III Infrastructure connectiv ity in the amount of Rp6,892.5 billion for:- Development of railway s infrastructure outside Java- Development of double track rails in southern Java - Procurement od 1 ,000 unit bus rapid transit in 28 cities

Competence based training in transportation sector

T ABLE 4.7


ADDIT IONAL ALLOCAT ION FOR MINIST RY OF T RANSPORT AT ION PRIORIT IES

DET AILS

Development of prime sectors (maritime) in the amount of Rp11,932.0 billion, among others:

Sea toll (national sea traffic network)Procurement and development various kind of ship (including patrol ship and navigation)

Port development in 7 7 location of sea tol, port facilities, Global Maritime Distress and Safety System (GMDSS), and Vessel Traffic Service (VTS)

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Ministry of AgricultureThe Ministry of Agriculture’s budget for the 2015 APBNP is Rp32,798.0 trillion, an increase of Rp16,918.7 trillion from its limitation in the 2015 APBN. This increase is mainly caused by an increase in additional budget from prioritized programs/activities that are directed at the following programs: (1) Development of food sovereignty in the amount of Rp16,858.7 trillions; (2) Decreasing individual income gap in the amount of Rp60.0 trillion. These changes are listed in Table 4.8 for reference.

Ministry of Social AffairsThe Ministry of Social Affairs’ budget in the 2015 APBNP is Rp22,421.8 trillion, an increase of Rp14,342.4 trillion from its limitation in the 2015 APBN. This increase in mainly caused by the additional budget for prioritized programs/activities, as well as the reallocation of social security reserves from the BA BUN to support additional programs to decrease the social gap (KKS). These changes are listed in Table 4.9.

No.

I

A-- Provisions of paddy , soy , maize, and cane seeds - Provision of frozen semen and prime cattle - Fertilizer prov ision- Equipment and machinery prov ision- Development of 1 ,000 seeds self-fulfillment v illage

B Food security and economic independent, including: - Irigation improvement in rice barn areas (e.g.: Cianjur, Pare-pare)

II Reducing disparity among income class in the amount of Rp60.0 billion, for:-


T ABLE 4.8

Pelatihan (2 bulan re-training ) di BLK atau pusat-pusat pelatihan lainny a

ADDIT IONAL ALLOCAT ION FOR MINIST RY OF AGRICULT URE PRIORIT IES BUDGET

DET AILS

Development of food security sector in the amount of Rp16,858.7 billion, among others for:

Production capacity , including :Land optimalization

No.

I Prosperous Family card in the amount of Rp5,152.8 billion *)

II Deficit allocation of PKH in tha amount of Rp1.235,0 billion

III

IV

V

VI

VII

*) This program also gets allocation from social security reserves of General Treasury Account


Improvement of social rehabilitation program in the amount of Rp755.0 billion, among others for incresing services in rehabilitation center for drugs abuse, disability, children and senior citizens

Improvement of social security program in the amount of Rp552,4 billion, among others for social protection of disaster victims, harassment victims/migrant workers and fund raising and management of social fund

Improvement of education and research for social welfare in the amount of Rp890.6 miliar, including verification and validation of data for PPLS and PMKS

in the amount of Rp5,000.0 billion, so its total is Rp10,152.8 billion

TABLE 4.9ADDITIONAL ALLOCATION FOR MINISTRY OF SOCIAL AFFAIRS PRIORITIES

BUDGET

DETAILSReducing disparity (among income class), including:

Improvement of public service and social programs in the amount of Rp11,6 billion

Improvement of social empowerment program and poverty eradication in the amount of Rp745,0 billion, among others for development of sustainability living



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Ministry of Education and CultureAs mandated by presidential decree No. 165 from 2014, the ministry of education and culture in the 2015 APBNP does not have jurisdiction of higher tertiary education, whose function has been redirected to the ministry of research, technology and tertiary education (see Box 4.1 for reference). The budget for the ministry of education and culture in the 2015 APBNP is Rp53,278.5 trillion, an increase of Rp6,477.2 trillion from the allocation of the KEMENDIKBUD (without the allocation for tertiary education) in the 2015 APBN. This increase is mainly caused by additional budgeting for prioritized education programs. However, there is also a decrease in budget from debts and grants in the amount of Rp625.7 trillion. These changes are elaborated and listed in Table 4.10.

Ministry of FinanceThe budget for the Ministry of Finance in the 2015 APBNP is Rp25,686.3 trillion, an increase of Rp6,959.1 trillion from its limitation in the 2015 APBN. This increase is caused by additional priority budgeting to support efforts to increase the government income in the amount of Rp5,279.5 trillion and by changes to budget allocation from the reallocation of BA BUN funds for bureaucratic reforms in the amount of Rp1,688.6 trillion. These changes are listed in Table 4.11.

Ministry of Energy and Mineral ResourcesThe budget for the ministry of energy and mineral resources in the 2015 APBNP is Rp15,070.5 trillion, an increase of Rp5,046.9 trillion from its limitation in the 2015 APBN. This increase is

No.

I-

-


Printing expenses for leaflet and KIP distribution fees

TABLE 4.10ADDITIONAL ALLOCATION FOR MINISTRY OF EDUCATION AND CULTURE

DETAILS

Fulfillment of basic mandatory in the amount of Rp7,102.9 billion, among others:Improvement of coverage of Kartu Indonesia Pintar (KIP) to cover 17,9 million student (increases by 8,7 million students from its plan in APBN 2015)

No.

I Increasing tax revenue, and bureaucracy reform (DG Tax) in tha maount of Rp4,004.2 billion

II


ADDITIONAL ALLOCATION FOR MINISTRY OF FINANCE PRIORITIES BUDGET

DETAILS

Increasing revenue on customs and excise, supervision, and bureaucracy reform (DG of Custom and Excise) in the amount of Rp1.266,3 billion

TABLE 4.11

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caused by: (1) An increase in priority budgeting for important sectors like energy and electricity (oil and gas infrastructure and launching of a 35 thousand MW power generation program) in the amount of Rp5,000.0 trillion; (2) An increase in limitation on the use of PNBP in the amount of RP43.5 trillion; and (3) An increase in the budget from grants in the amount of Rp3.5 trillion.

Ministry of HealthThe budget for the ministry of health in the 2015 APBNP is Rp51,277.3 trillion, an increase of Rp3,518.5 trillion from its limitation in the 2015 APBN. This increase in allocation has taken into account the following factors: (1) An increase in the budget for prioritized programs in the amount of Rp2,708.7 trillion; (2) An increase in limitation on the use of PNBP/BLU in the amount of Rp798.4 trillion; (3) Increases from foreign debts in the amount of Rp11.5 trillion. These changes are listed and elaborated in Table 4.12.

Ministry of IndustryThe budget for the Ministry of Industry in the 2015 APBNP is Rp4,548.3 trillion, an increase of Rp1,805.0 trillion from its limitation in the 2015 APBN. This increase is mainly cause by the funding of prioritized programs. This increase will also be focused on support for food sovereignty and the industry, as well as the lessening of income gaps. This support for food sovereignty is focused on an increased production and support for the building of 17 units of technopark and 9 units of schience park. In the industry sector, the government is planning to build 13 industrial areas outside of Java in an effort to work together with the private sector. Efforts to lessen income gap will be focused at lessening individual income gap through various training programs in BLK and other training facilities, as well as the development of sustainable living.

Ministry of TourismAs mandated by presidential decree No. 165 from 2014, the ministry of tourism was previously the ministry of tourism and creative economy (see box 4.1 for reference). The budget for the ministry of tourism in the 2015 APBNP is Rp2,415.8 trillion. This allocation includes: (1)

No.

I Extension of beneficiaries (PBI) of Kartu Indonesia Sehat in the amount of Rp422,6 billion *)

- Additional PBI for 2015

II Referenced health services (Supply Side) in the amount of Rp2,286.1 billion, for:- Fulfillment of facilities, infrastructure and equipment of national referenced hospital - Fulfillment of facilities, infrastructure and equipment of regional referenced hospital


ADDITIONAL ALLOCATION FOR MINISTRY OF HEALTH PRIORITIES BUDGET

DETAILSFulfillment of basic health needs, through:

*) Coverage PBI formerly 86,4 million peopleto become 88,2 million people (increasing by 1,8 million)

TABLE 4.12



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Additional priority budgeting for important tourism sectors in the form of tourism promotion in the amount of Rp1,000.0 trillion and the lessening of individual income gap in the amount of Rp60.0 trillion; and (2) A decrease in the budgeting in the amount of Rp125.0 trillion to create the creative economy Department.

Coordinating Ministry for MaritimeMandated by presidential decree No. 165 from 2014, the coordinating ministry for maritime is a new ministry that has been created to coordinate the ministry of Energy and Mineral Resources, the ministry of transportation, the ministry of marine and fisheries, the ministry of tourism and other needed government bodies (see box 4.1 for reference). The budget for the coordinating ministry for maritime in the 2015 APBNP is Rp125.0 trillion. This will be used, among others, to coordinate policies to develop the maritime sector.

Ministry of Marine and FisheriesThe budget for the Ministry of Marine and Fisheries in the 2015 APBNP is RP10,597.8 trillion, an increase of Rp3,871.8 trillion from its limitation in the 2015 APBN. This increase takes into account additional funding for prioritized programs in the amount of Rp3,849.7 trillion and an increase in the limitation of the use of PNBP in the amount of Rp22.1 trillion. These changes are elaborated in Table 4.13.

No.

I Supporting prime sector (food sovereignty) in the amount of Rp110.0 billion, for:- Development of 17 technoparks and 9 science parks

II Supporting prime sector (maritime) in the amount ofRp3,379.7 billion, for:A Forming Great fishermen movement (gerakan nelayan hebat)

- Improving 25 fishinging vessel 30 GT in border areas-

-

B Fish cultivation independence movement, among others: - Fish cultivation application in 8,200 certified fish cultivator-

Superior seeds guarantee in 465 folks cultivation and others cultivationSuperior seeds guarantee in 465 folks cultivation and others cultivation- Combating illegal fishing, unregulated and unreported fishingCombating illegal fishing, unregulated and unreported fishing- Increasing fishing productionIncreasing fishing production- Supporting operational sea security in border seaSupporting operational sea security in border sea- Improving 100 fishery centerImproving 100 fishery center- Best aqua culture practices in superior commodityBest aqua culture practices in superior commodity- Rehabilitation in ravage seashore and marine environmentRehabilitation in ravage seashore and marine environment- Development of fisheries climate and sustainable cultivationDevelopment of fisheries climate and sustainable cultivation- Post cultivation industrial development and integrated marketing network - Development of small peripheral and conservation islands - Self-fulfillment in salt industry - Ministry of Maritime and Fisheries capacity improvement

III Reducing disparity interclass income in the amount of Rp360.0 billion, for:- Training in tranning center and other center - Improveing sustainable living


Improving fishing logistical system through procurement of one cold storage in each fisheries center

Sertification of 30 thousand site owned by fishermen (identification fee)

ADDITIONAL ALLOCATION FOR MINISTRY OF MARITIME AND FISHERIES TABLE 4.13

DETAILS

Smart fishermen information system for accessibility on fishing spot weather information and market in 100 fisheries center

Chapter 4

4-19



Ministry of DefenseThe budget for the Ministry of Defense in the 2015 APBNP is RP102,283.3 trillion, an increase of Rp5,347.6 trillion from its limitation in the 2015 APBN. This increase is used, among others, to provide the main means for military defense (Alutsista) for the different TNI headquarters through several programs: (1) Modernization programs for Alutsista/non-alutsista/ Integrated facilities and infrastructures; (2) Modernization of Alutsista/Non-Alutsista/ army facilities and infrastructures; (3) Modernization of Alutsista/ Non Alutsista/ marine facilities and infrastructures; (4) Modernization of ALutsista/ Non Alutsista / air force facilities and infrastructures.

Ministry of Home AffairsThe budget for the Ministry of Home Affairs in the 2015 APBNP is Rp6,110.7 trillion, an increase of Rp2,402.3 trillion from its limitation in the 2015 APBN. This increase is used, among others, to implement Law No. 24 from 2013 about changes to Law No. 23 from 2006 about the Census administration and the Population Administration and Civil Registration Program.

These changes in the budget allocation in the individual K/L are elaborated in Table 4.14.

(1) (2) (3) (4) (5) (6) (7) (8) (9)(10=4+5+6+7+8

+9) (11=4+10)

1 MAJELIS PERMUSYAWARATAN RAKYAT 612,3 - - - - - 365,0 365,0 977,3

2 DEWAN PERWAKILAN RAKYAT 3.556,7 - - - - - 1.635,0 1.635,0 5.191,7

3 BADAN PEMERIKSA KEUANGAN 2.915,5 - - - - - 100,0 100,0 3.015,5

4 MAHKAMAH AGUNG 7.037,9 - - - 1.437,8 - 100,0 1.537,8 8.575,7

5 KEJAKSAAN REPUBLIK INDONESIA 4.208,9 28,1 - - 498,1 - - 526,2 4.735,2

6 KEMENTERIAN SEKRETARIAT NEGARA 2.054,8 29,1 - - - - - 29,1 2.083,9

7 KEMENTERIAN DALAM NEGERI 3.708,4 1.000,0 (3,1) 29,0 1.376,4 - - 2.402,3 6.110,7

8 KEMENTERIAN LUAR NEGERI 5.533,9 567,9 - - - - 150,0 717,9 6.251,8

9 KEMENTERIAN PERTAHANAN 96.935,7 622,6 - - - - 4.725,0 5.347,6 102.283,3

10 KEMENTERIAN HUKUM DAN HAK ASASI MANUSIA RI

9.688,7 50,6 162,8 - 826,6 - 450,0 1.489,9 11.178,6

11 KEMENTERIAN KEUANGAN 18.727,2 5.270,5 - - 1.688,6 - - 6.959,1 25.686,3

12 KEMENTERIAN PERTANIAN 15.879,3 16.918,7 - - - - - 16.918,7 32.798,0

13 KEMENTERIAN PERINDUSTRIAN 2.743,3 1.805,0 - - - - - 1.805,0 4.548,3

14 KEMENTERIAN ENERGI DAN SUMBER DAYA MINERAL

10.023,5 5.000,0 43,5 3,5 - - - 5.046,9 15.070,5

15 KEMENTERIAN PERHUBUNGAN 44.933,9 20.966,1 - (945,9) - - - 20.020,2 64.954,1

16 KEMENTERIAN PENDIDIKAN DAN KEBUDAYAAN

46.801,4 7.102,9 - (625,7) - - - 6.477,2 53.278,5

17 KEMENTERIAN KESEHATAN 47.758,8 2.708,7 798,4 11,5 - - - 3.518,5 51.277,3

18 KEMENTERIAN AGAMA 56.440,0 436,9 906,6 (316,6) 2.817,5 - - 3.844,4 60.284,4

19 KEMENTERIAN KETENAGAKERJAAN 3.718,1 505,0 - - - - - 505,0 4.223,1

20 KEMENTERIAN SOSIAL 8.079,4 9.342,4 - - 5.000,0 - - 14.342,4 22.421,8

Additional budget

Priorities

Changes in PNBP/BLU

Changes in PLN/HLN/

SBSN

General Treasury Account

Other ChangesAdditional

Gudget based on Discussion

TABLE 4.14LINE MINISTRIES BUDGET BASED ON NEW NOMENCLATURE

(billion Rupiah)

NO Line Ministries APBN 2015

Changes

Total Changes APBNP 2015



Chapter 4

(1) (2) (3) (4) (5) (6) (7) (8) (9)(10=4+5+6+7+8

+9) (11=4+10)

21 KEMENTERIAN LINGKUNGAN HIDUP DAN KEHUTANAN

6.468,2 156,0 43,6 - - - - 199,6 6.667,8

22 KEMENTERIAN KELAUTAN DAN PERIKANAN 6.726,0 3.849,7 22,1 - - - - 3.871,8 10.597,8

23 KEMENTERIAN PEKERJAAN UMUM DAN PERUMAHAN RAKYAT

84.912,2 33.308,8 - 325,1 - - - 33.633,9 118.546,1

24 KEMENTERIAN KOORDINATOR BIDANG POLITIK, HUKUM DAN KEAMANAN

449,6 - - 70,0 - - - 70,0 519,6

25 KEMENTERIAN KOORDINATOR BIDANG PEREKONOMIAN

305,9 - - - 20,8 - - 20,8 326,7

26 KEMENTERIAN KOORDINATOR BIDANG PEMBANGUNAN MANUSIA DAN KEBUDAYAAN

295,8 - - - 149,0 - - 149,0 444,8

27 KEMENTERIAN PARIWISATA 1.715,9 1.060,0 - - - (360,1) - 699,9 2.415,8

28 KEMENTERIAN BADAN USAHA MILIK NEGARA 133,8 - - - 14,3 - - 14,3 148,1

29 KEMENTERIAN RISTEK DAN PENDIDIKAN TINGGI

42.255,3 115,0 - - - - 1.200,0 1.315,0 43.570,3

30 KEMENTERIAN KOPERASI DAN PENGUSAHA KECIL DAN MENENGAH

1.453,9 85,0 - - 44,2 - 50,0 179,2 1.633,1

31 KEMENTERIAN PEMBERDAYAAN PEREMPUAN DAN PERLINDUNGAN ANAK

217,7 - - - - - - - 217,7

32 KEMENTERIAN PENDAYAGUNAAN APARATUR NEGARA DAN REFORMASI BIROKRASI

195,9 - - - - - - - 195,9

33 BADAN INTELIJEN NEGARA 2.416,6 - - - - - 200,0 200,0 2.616,6

34 LEMBAGA SANDI NEGARA 1.456,6 - - - - - 200,0 200,0 1.656,6

35 DEWAN KETAHANAN NASIONAL 44,3 - - - - - 100,0 100,0 144,3

36 BADAN PUSAT STATISTIK 3.930,8 1.100,0 - - - - - 1.100,0 5.030,8

37 KEMENTERIAN PERENCANAAN PEMBANGUNAN NASIONAL

1.088,1 - - - - - - - 1.088,1

38 KEMENTERIAN AGRARIA DAN TATA RUANG/BPN

5.623,9 - - - - - - - 5.623,9

39 PERPUSTAKAAN NASIONAL REPUBLIK INDONESIA

473,5 - - - - - - - 473,5

40 KEMENTERIAN KOMUNIKASI DAN INFORMATIKA

4.859,8 70,0 - - - - - 70,0 4.929,8

41 KEPOLISIAN NEGARA REPUBLIK INDONESIA 51.594,5 - - 1.655,8 - - 3.850,0 5.505,8 57.100,4

42 BADAN PENGAWAS OBAT DAN MAKANAN 1.221,6 - - - - - - - 1.221,6

43 LEMBAGA KETAHANAN NASIONAL 278,9 - - - - - 100,0 100,0 378,9

44 BADAN KOORDINASI PENANAMAN MODAL 635,9 - - - - - - - 635,9

45 BADAN NARKOTIKA NASIONAL 903,2 - - - 500,0 - - 500,0 1.403,2

46 KEMENTERIAN DESA, PDT DAN TRANSMIGRASI 6.453,0 475,0 - - - - 2.100,0 2.575,0 9.028,0

47 BADAN KEPENDUDUKAN DAN KELUARGA BERENCANA NASIONAL

3.294,7 - - - - - - - 3.294,7

48 KOMISI NASIONAL HAK ASASI MANUSIA 72,2 - - - 8,3 - - 8,3 80,5

49 BADAN METEOROLOGI, KLIMATOLOGI DAN GEOFISIKA

1.763,5 - - - - - 50,0 50,0 1.813,5

50 KOMISI PEMILIHAN UMUM 1.134,2 - - - 481,5 - - 481,5 1.615,8

51 MAHKAMAH KONSTITUSI RI 214,5 - - - - - - - 214,5

52 PUSAT PELAPORAN DAN ANALISIS TRANSAKSI KEUANGAN

76,5 - - - - - - - 76,5

53 LEMBAGA ILMU PENGETAHUAN INDONESIA 1.147,6 70,0 - 73,5 - - - 143,5 1.291,1

54 BADAN TENAGA NUKLIR NASIONAL 819,9 35,0 - - - - - 35,0 854,9

55 BADAN PENGKAJIAN DAN PENERAPAN TEKNOLOGI

858,4 95,0 - - 2,8 - - 97,8 956,2

56 LEMBAGA PENERBANGAN DAN ANTARIKSA NASIONAL

673,1 - - - - - - - 673,1

57 BADAN INFORMASI GEOSPASIAL 721,0 - - - - - - - 721,0

58 BADAN STANDARISASI NASIONAL 164,8 - - - - - - - 164,8

59 BADAN PENGAWAS TENAGA NUKLIR 137,1 - - - - - - - 137,1

60 LEMBAGA ADMINISTRASI NEGARA 269,8 - - - - - - - 269,8

61 ARSIP NASIONAL REPUBLIK INDONESIA 172,1 - - - - - - - 172,1

62 BADAN KEPEGAWAIAN NEGARA 614,1 - - - - - - - 614,1

63 BADAN PENGAWASAN KEUANGAN DAN PEMBANGUNAN

1.528,4 - - - 139,0 - - 139,0 1.667,4

64 KEMENTERIAN PERDAGANGAN 2.495,3 975,0 - - 61,8 - - 1.036,8 3.532,1

65 KEMENTERIAN PEMUDA DAN OLAH RAGA 1.781,2 2,9 - - 876,0 - 374,0 1.252,9 3.034,1

66 KOMISI PEMBERANTASAN KORUPSI 898,9 - - - - - - - 898,9

67 DEWAN PERWAKILAN DAERAH (DPD) 763,9 - - - - - 375,0 375,0 1.138,9

68 KOMISI YUDISIAL RI 119,6 - - - 8,7 - - 8,7 128,3

69 BADAN NASIONAL PENANGGULANGAN BENCANA

1.681,6 - - - 24,3 - - 24,3 1.705,8

70 BADAN NASIONAL PENEMPATAN DAN PERLINDUNGAN TENAGA KERJA INDONESIA

393,3 - - - - - - - 393,3

Additional budget

Priorities

Changes in PNBP/BLU

Changes in PLN/HLN/

SBSN





Changes


Chapter 4

4-21



4.2.2.2 Budget Allocation Changes to the General Treasury FundAside from being allocated to the verious K/L, the central government expenditure budget is also allocated through the Ministry of Finance, acting as the State General Treasurer (BUN). In the context of the central government expenditure, BA BUN has sub0budgets that are categorized as follows: (1) BA BUN debt management (BA 999.01) for the payment of debt interest; (2) BA BUN for grant management (BA 999.02) for grant spending; (3) BA BUN for subsidy spending management (BA 999.07) for subsidies; (4) BA BUN for other spending management (999.08) for civil servant spending reserves, natural disaster relief reserves and other spending needs; and (5) BA BUN for special transaction (BA999.99) to pay for civil cervant pensions and healthcare, contribution to international organizations, eligible support funding (VGF) and payment for the difference in Bulog rice prices.

In the 2015 APBNP, spending budget allocation for BA BUN is Rp524,068.6 trillion. This is a decrease of Rp221,063.8 trillion or 29.7% from its limitation in the 2015 APBN, which was RP745,132.4 trillion. Those changes in nonK/L budget allocation are simultaneous; and affected by several factors: (1) An increase in allocation for programs to manage the state debts and other spending programs; and (2) A decrease in allocation for subsidy and special transaction management. These will be elaborated below.

Changes to the State Debt Management in the 2015 APBNPPayment of debt interest is a part of the Program to manage state debts by the central government. The size of this debt interest is dependent on several factors: (1) Outstanding debt from accumulated debts from previous years (legacy debts); (2) Debt planning for the current budgetl (3) Debt portfolio management; (4) Assumptions of the Rupiah exchange rate to other foreign currencies like USD, Yen, and Euro, as well as other foreign currencies; (5) The level

(1) (2) (3) (4) (5) (6) (7) (8) (9)(10=4+5+6+7+8

+9) (11=4+10)

71 BADAN PENANGGULANGAN LUMPUR SIDOARJO (BPLS)

843,2 - - - - - - - 843,2

72 LEMBAGA KEBIJAKAN PENGADAAN BARANG/JASA PEMERINTAH

158,4 - - - - - - - 158,4

73 BADAN SAR NASIONAL 2.420,0 - - - - - 200,0 200,0 2.620,0

74 KOMISI PENGAWAS PERSAINGAN USAHA 100,6 - - - - - - - 100,6

75 BADAN PENGEMBANGAN WILAYAH SURAMADU

195,5 100,0 - - - - - 100,0 295,5

76 OMBUDSMAN REPUBLIK INDONESIA 66,3 - - - - - - - 66,3

77 BADAN NASIONAL PENGELOLA PERBATASAN 210,6 - - - - - - - 210,6

78BADAN PENGUSAHAAN KAWASAN PERDAGANGAN BEBAS DAN PELABUHAN BEBAS BATAM

1.097,2 - - - - - - - 1.097,2

79 BADAN NASIONAL PENANGGULANGAN TERORISME

311,8 - - - - - - - 311,8

80 SEKRETARIAT KABINET 183,1 - - - - - - - 183,1

81 BADAN PENGAWAS PEMILIHAN UMUM 457,0 - - - - - - - 457,0

82 LEMBAGA PENYIARAN PUBLIK RADIO REPUBLIK INDONESIA

889,0 - - - - - - - 889,0

83 LEMBAGA PENYIARAN PUBLIK TELEVISI REPUBLIK INDONESIA

866,6 - - - - - - - 866,6

84BADAN PENGUSAHAAN KAWASAN PERDAGANGAN BEBAS & PELABUHAN BEBAS SABANG

246,5 - - - - - - - 246,5

85 KEMENTERIAN KOORDINATOR BIDANG KEMARITIMAN

125,0 - - - - - 125,0 125,0

647.309,9 113.976,8 1.973,8 280,2 15.975,7 (360,1) 16.324,0 148.170,5 795.480,4

*)

JUMLAH

General Treasury account reserves for Economic Creative Board for Rp1.500,0 billion

Additional budget

Priorities

Changes in PNBP/BLU

Changes in PLN/HLN/

SBSN





Changes




Chapter 4

of the 3-months SPN that is used as a reference for instrument variable rate interest and SBN yield; and (6) Cost projection from new debts (discount and costs).

In regards to core macroeconomic assumptions and fiscal policies undertaken by the government for the 2015 APBNP, the average 3 months SPN and the Rupiah exchange rate to USD is projected to each be 6.2% and Rp12,500 per USD. In regards to fiscal policies, the net SBN is projected to be Rp297,698.4 trillion, net PLN is negative Rp15,536.2 trillion and net PDN is Rp1,690.6 trillion.

In line with these, debt interest payment in the 2015 APBNP is Rp155,730.7 trillion, an increase of Rp3,762.4 trillion or 2.5% from it limitation in the 2015 APBN. This consists of domestic debt interest payment in the amount of Rp141,203.8 trillion and foreign debt interest payment in the amount of Rp14,526.9 trillion (including foreign hedge transaction fees). Spending for banking commission in the amount of Rp200 million is now thrown into the grant management program (BA 999.02). These allocations are listed in Table 4.15.

Changes to the State Subsidy Management Program in the 2015 APBNPThe budget for state subsidy spending management in the 2015 APBNP is projected to be Rp212,104.4 trillion. This is a decrease of Rp202,576.2 trillion compared to its allocation in the 2015 APBN, which was Rp414,680.6 trillion. This change was driven by several factors: (1) A change in the fuel, biofeul and LPG 3 KG changes due to a rise in the subsidized fuel prices in November 2014, a change in the fuel subsidy structure to a fixed subsidy and changes to internationl crude oil prices; (2) Changes to subsidy on electicity due to changes in the fuel mix and allocation of estimated underpayment of electricity subsidy in 2014 (unaudited); (3) additional allocation of estimated underpayment of fertilizer subsidy in 2012 and 2013; and (4) Changes to the budget for DTP tax. These changes are listed in Table 4.16.

2014

Nominal %

a. Domestic 118.839,7 137.941,8 141.203,8 3.262,0 2,4

b. Foreign 14.601,1 14.026,5 14.526,9 500,4 3,6

Interest payment 133.440,8 151.968,3 155.730,7 3.762,4 2,5

Affecting factorsAverage SPN-3 months interest (%) 5,8% 6,0% 6,2%

11.878 11.900 12.500

Issuance SBN Neto 264.983,7 277.049,8 297.698,4 Foreign loan drawing Neto (10.030,3) (19.495,7) (15.536,2) Domestic loan Neto 2.178,0 1.621,2 1.690,6


Average exchange rate

TABLE 4.15INTEREST PAYMENT, 2014 - 2015

(billion Rupiah)

Details

2015

LKPP Unaudited

APBN APBNP

Changes

Chapter 4

4-23



Fuel, biofeul and LPG 3 KG subsidies in the 2015 APBNP is projected to be Rp64,674.8 trillion, a decrease of Rp211,338.4 trillion compared to its limitation in the 2015 APBN, which was Rp276,013.2 trillion. This decrease is caused by: (1) An increase in subsidized BBM prices in November 2014; and (2) A decrease of international crude oil prices. In 2015, aside from maintaining subsidy for kerosene, the government will also give a fixed subsidy for diesel. Meanwhile, other types of fuel are no longer subsidized.

Electricity subsidy in the 2015 APBNP is projected to be Rp73,149.2 trillion, an increase of Rp4,459.6 trillion compared to its limitation in the 2015 APBN, which was Rp68,689.7 trillion. This increase is caused by: (1) A change in the fuel mix; and (2) Allocation of estimated underpayment of electricity subsidy in 2014 (unaudited).

Budget allocation for fertilizer subsidy in the 2015 APBNP is projected to be Rp39,475.7 trillion, an increase of Rp3,772.6 trillion from it limitation in the 2015 APBN, which was Rp35,703.1 trillion. This change in the fertilizer subsidy is caused by the estimated underpayment of previous fertilizer subsidy, as audited by the BPL, in the amount of Rp3,772.6 trillion.

Meanwhile, credit interest subsidy will be continued in 2015, but there is no allocation for new KUPS and KPENRPAllocation for DTP taxes subsidy in the 2015 APBNP is projected to be Rp9,180.0 trillion, an increase of Rp530.0 trillion from its earlier limitation in the 2015 APBN, which was Rp8,650.0 trillion. This increase is caused by additional PPh budget on geothermal energy commodity and additional customs facilities.

2014

Nominal %

I. ENERGY 341.810,4 344.702,8 137.824,0 (206.878,8) (60,0)

1. Fuel, Biofuel and 3-kg LPG *) 239.994,1 276.013,2 64.674,8 (211.338,4) (76,6) 2. Electricity subsidy 101.816,3 68.689,7 73.149,2 4.459,6 6,5

II.NON ENERGY 50.152,2 69.977,7 74.280,3 4.302,6 6,1

1. Food subsidy 18.164,7 18.939,9 18.939,9 - -

2. Fertilizer subsidy 21.047,3 35.703,1 39.475,7 3.772,6 10,6

3. Seeds subsidy 308,6 939,4 939,4 - - 4. Public Service Obligation 2.085,1 3.261,3 3.261,3 - -

5. Credit Interest Program subsidy 2.760,0 2.484,0 2.484,0 - -

6. 5.786,5 8.650,0 9.180,0 530,0 6,1

TOTAL 391.962,6 414.680,6 212.104,4 (202.576,2) (48,9)

*) including LGV subsidy

Tax subsidy


TABLE 4.16 SUBSIDIES EXPENDITURE, 2014-2015

(billion Rupiah)

DETAILS

2015

LKPP Unaudited

APBN APBNPChanges



Chapter 4

Changes to the State Grant Management Programs in the 2015 APBNPBudget allocation for state grant management program in the 2015 APBNP is Rp4,644.4 trillion, an increase of Rp1,079.3 trillion from its limitation in the 2015 APBN, which was Rp3,565.1 trillion. This increase in budget allocation is mainly caused by plans to withdraw foreign debts and grants so that they can be channeled domestically; and grant awarded from domextic income and related spending from bankin comission is in the mount of Rp0.2 trillion.

Foreign debts that are channeled to domestic regions will increase by Rp63.6 trillion. This change will influence an increase on grant spending allocation for the Water Resources and Irrigation Sector Management Program II (WISMP-2) due to changes of the annual planning made by the local government and coordinated with the related ministries.

Foreign grants that are channeled to domestic regions will increase by Rp493.1 trillion caused by a plan to increase the withdrawal of the drinking water grant in the mount of Rp315.4 trillion and the waste water grant in the amount of Rp26.0 trillion. These changes are done to suit the closing dates of both grants. Changes in the state grants management program will also include outstanding grants from 2014 which are the development of Seulawah Agam grant in the amount of Rp54.6 trillion and the Microfinance Innovation Fund grant in the amount of Rp97.1 trillion.

In the 2015 APBNP there is also the allocation of grant budget for regions that is funded from domestic income from the Nationwide Water Hibah Program (NHWP) in the amount of Rp500.0 trillion. This program is implemented to improve drinking water services to the people; and this will include not just low income families as have been done so far through drinking water grants funded from foreign grants, but will also include everyone in regions with no access to clean water.

Aside from allocation and channeling for domestic grants, the government will also allocate grants to foreign states or institution, to be funded from domestic income. These grants are:

(1) Grants for the building of the Ahmad Shah Baba Mina mosque in Kabul, Afghanistan, in the amount of Rp5.0 trillion.

(2) Grants for the building of a mosque in Queensland, Australia, in the amount of

Rp5.0 trillion

(3) Grants given to the government of Palau in the amount of Rp12.5 trillion to support

the organizing of the 45th Pacific Island Forum and Other Forum Related Meetings;

Those grants are awarded as part of the Indonesian government’s commitment. These changes are elaborated more in Table 4.17.

Chapter 4

4-25



Changes to Other Spending Management Programs in the 2015 APBNPBudget allocation for other spending management in the 2015 APBNP is Rp50,147.6 trillion, a decrease of Rp22,616.6 trillion or 31.1% compared to its limitation in the 2015 APBN, which

2014

Nominal %

809,6 3.565,1 4.621,7 1.056,6 29,6

479,4 2.696,3 2.759,8 63,6 2,4

1. Mass Rapid Transit (MRT) Project 353,2 2.583,0 2.583,0 - -

2. Water Resources and Irrigation Sector Management Program Phase II (WISMP-2)

126,1 113,3 176,8 63,6 56,1

330,2 868,8 1.361,9 493,1 56,7

1. Drinking Water Grant 306,7 96,1 411,5 315,4 328,3

2. Sewage Grant 10,6 16,0 42,0 26,0 162,1

3. Infrastructure Enhancement Grant (IEG)-Sanitasi 3,9 - - - -

4. Development of Seulawah Agam - - 54,6 54,6 -

5. Australia-Indonesia grant for Sanitation - 334,6 334,6 - -

6. Provincial Road Improvement and Maintenance 5,6 284,6 284,6 - -

7. Crinking Water Grant Phase I 3,5 - - - -

8. Hibah Microfinance Innovation Fund - - 97,1 97,1 -

9. Increasing capacity for minimum standard services application in basic education

- 137,5 137,5 - -

- - 500,0 500,0 -

1. Nationwide Water Hibah Program - - 500,0 500,0 -

71,7 - 22,5 22,5 -

1. Grant on developing Insonesian student dorm in Al Azhar University Cairo Egypt

33,4 - - - -

2. Purchasing and renovation of a mosque for Indonesian Muslim Association in America (IMAAM) Maryland

34,5 - - - -

3. Grant on developing mosque Ahmad Shah Baba Mina, Kabul Afganistan

- - 5,0 5,0 -

4. Grant for developing mosque in Queensland, Australia - - 5,0 5,0 -

5 Grant for humanity for government of syria, Serbia, Bosnia Herzegovina and Palestine

3,7 - - - -

6. Grant for government of Palau - - 12,5 12,5 -

- - 0,2 0,2 -

1. Banking Commission - - 0,2 0,2 -

881,3 3.565,1 4.644,4 1.079,3 30,3

A. Grants to Local Governemnt

I. Foreign Loan subsidiary grant

II. Foreign grant subsidiary grant

III. Domestic Revenue Subsidiary Grant

B. Grant to Fooreign Government/International Institutions

C. Other grant management

Total

Source:Ministry of Finance

TABLE 4.17

GRANT MANAGEMENT PROGRAM, 2014 - 2015

(billion Rupiah)

Details

2015


Changes



Chapter 4

was Rp72,764.2 trillion. This decrease is caused by: (1) reallocation of social protection reserves to the K/L in the amount of Rp5,000.0 trillion; (2) A decrease in the allocation for K/L reward reserves to be Rp62.8 trillion; and (3) A cancelation of Rp9,268.1 trillion for the education spending reserve in accordance with a decrease in the government expenditure. Moreover, there are other reserve allocation for several new posts that are temporarily included in other spending magement like: reserves for the K/L naming changes and reserves for the creation of the creative economy department.

Changes to the Special Transaction Management Program in the 2015 APBNPBudget allocation for the special transaction management program in the 2015 APBNP is Rp101,441.5 trillion, a decrease of Rp712.8 trillion or 0.7% from its allocation in the 2015 APBN, which was Rp102,154.3 trillion. This decrease is caused by adjustments to estimates of spending on civil servant pension and the reallocation of social contribution funds, as well as changes on withdrawal plans of the “Dana Dukungan Kelayakan” by the responsible parties. This change in withdrawal plan is because the drinking water provision project cannot be implemented in two regions in 2014.

On the other hand, there are increases in the budget allocation of several posts in the special transaction programs. This is the increase of allocation for contribution to international intitutions due to changes in the Rupiah exchange rate to USD, and contributions to new international intitutionas, as well as budget allocation for PT SMI related to the facilitation of the KPS provision projected to be completed in 2016.

4.3 Policy Changes of Transfer to Region and Rural Fund in the 2015 APBNP

With changes to the core macroeconomic assumptions used in the making of the 2015 APBN and with the transition of the previous government (Kabinet Indonesia Bersatu II) to the new government (Kabinet Kerja), there was a need to adjust the transfer to region and rural funds policies, as well as their budget allocation in the 2015 APBN. These adjustments include the revenue sharing fund (DBH), the special allocation funds (DAK), the additional special autonomy fund for infrastructure in Papua and West Papua and the village fund.

The structure of the transfer to region and rural fund, as well as their changes from the 2015 APBN to the 2015 APBNP is elaborate in Table 4.18

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4.3.1 Changes in Policy and Budgeting for the Revenue Sharing Fund (DBH)

As mandated by Law No. 33 from 2004 about fiscal balance between the central and local government, DBH is allocated based on a certain percentage from the APBN that is shared out. In the 2015 APBN, DBH was allocated a budget of Rp127,692.5 trillion. In accordance with changes to the core macroeconomic assumptions, the allocation of DBH in the 2015 APBNP also needs to be changes. A few components of the DBH that are decreasing in the 2015 APBNP are: (1) DBH PPh article 25/29 on domestic individual taxpayer responsibilities; (2) DBH for crude oil; and (3) DBH for natural gas. On the other hand, a few components in the DBH that are increasing in the 2015 APBNP are: (1) DBH PPh article 21; (2) DBH on tabacco excise; and (3) DBH on mineral mining and coal. On the whole, the DBH in the 2015 APBNP is decreased by Rp17,640.5 trillion compared to its limitation in the 2015 APBN. As such, the total allocation for DBH in the 2015 APBNP is projected to be Rp110,052.0 trillion.

2014

Nominal %

Transfer to Region 573.702,9 637.975,1 643.834,5 5.859,5 0,9 I. Balanced Fund 477.052,7 516.401,0 521.760,5 5.359,5 1,0

A. Revenu Sharing Fund 103.938,9 127.692,5 110.052,0 (17.640,5) (13,8)

1. Tax 41.937,6 50.568,7 54.216,6 3.647,9 7,2

2. Natural Reasources 62.001,3 77.123,8 55.835,4 (21.288,5) (27,6)

B. General Allocation Fund 341.219,3 352.887,8 352.887,8 - -

C. Special Allocation Fund 31.894,5 35.820,7 58.820,7 23.000,0 64,2

II. Special Autonomy Fund 16.148,8 16.615,5 17.115,5 500,0 3,0

A. Special Autonomy Fund 13.648,8 14.115,5 14.115,5 - -

1. Special Autonomy Fund for Prov. Papua and Prov. West Papua6.824,4 7.057,8 7.057,8 - -

2. Special Autonomy Fund for Aceh 6.824,4 7.057,8 7.057,8 - -

B. Additional Special Autonomy Fund for Infrastructure 2.500,0 2.500,0 3.000,0 500,0 20,0

1. Province of Papua 2.000,0 2.000,0 2.250,0 250,0 12,5 2. Province of West Papua 500,0 500,0 750,0 250,0 50,0

III. Special Fund for D.I. Yogyakarta 419,1 547,5 547,5 - -

IV. Other Transfer 80.082,3 104.411,1 104.411,1 - -

Dana DesaRural Fund - 9.066,2 20.766,2 11.700,0 129,1

573.702,9 647.041,3 664.600,7 17.559,5 2,7


TOTAL

TABLE 4.18TRANSFER TO REGION AND RURAL FUND, 2014-2015

(billion Rupiah)

DETAILS

2015


Changes



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4.3.2 Changes in Policy and Budgeting for the Special Allocation Fund (DAK)

To help certain regions in funding public service facilities and infrastructures in accordance with efforts to accelerate development in peripheral regions and to reach the national priority, a DAK of Rp35,829.7 trillion was allocated in the 2015 APBN. This consisted of the regular DAK in the amoount of Rp33,000.0 trillion for regions that fullfill the general- , special- and technical criteria; and also the additional DAK in the amount of Rp2,820.7 trillion for affirma-tive policy for underdeveloped regions and/or border territories with relatively low financial capability. DAK allocation in the 2015 APBNP is planned to be Rp58,820.7 trillion, an increase of Rp 23,000.0 trillion from the 2015 APBN. This increase is caused by additional DAK alloca-tion for the following purposes:

1. To accommodate programs/activities directed at food sovereignty, revitalization of the traditional market, development of inter-region connectivity and increasing the quality of healthcare services for the people that are needed to support efforts to accelerate economic growth and the people’s wellbeing. To support those prioritized programs, there is an allocation of DAK for additional support for the Kabinet Kerja’s priority programs (P3K2) TA 2015;

2. To accommodate local government proposal that have been approved by the DPR.

As such, details of these DAK allocations can be seen in Table 4.19.

2014

APBNP APBN APBNP I. DAK 30.200,0 33.000,0 33.000,0 II. Additional Allocation for DAK 2.800,0 2.820,7 25.820,7

a. DAK Affirmative for Regions/Municipals 2.800,0 2.820,7 2.820,7 b. DAK Supporting for Kabinet Kerja Priorities - - 23.000,0

- Irrigation infrastructure - - 3.126,6 - Farming subdivision irrigation - - 4.000,0 - Transportation, subdivision road - - 12.153,9 - - - 892,4

- - - 2.827,1

33.000,0 35.820,7 58.820,7

Source: Ministry o Finance

Health, subdivision refferal health services

TOTAL

TABLE 4.19SPECIAL ALLOCATION FUND, 2014-2015

(billion Rupiah)

DETAILS2015

Trade Facilities, subdivision development and improvement of distribution facilities

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The extend of those DAK to support the Kabinet Kerja’s priority programs are as follows:

1. DAK for irrigation structures to support the achievement of an increased primary and secondary irrigation network that are under the jurisdiction of the local government to support food sovereignty: Surface irrigation, swamp irrigation, groundwater irrigation, pump irrigation and pond irrigation with their supporting facilities, as well as selective new developments that fall under the jurisdiction of the provincial and city government to support food sovereignty.

2. DAK for agriculture in irrigation to finish tertiary irrigation systems in provincial and city regions for up to 700,000 hectare along with their supporting facilities to support food sovereignty that include: (1) Rehabilitation of tertiary irrigation networks; (2) Development of tertiary irrigation networks; (3) Development of grounwater resources including: shallow groundwater, surface water, retention basins and dam trenches; and (4) Development/Rehabilitaion of farm roads.

3. DAK for transportation in the road subfield to increas connectivity and accessibility of people in border territories and underdeveloped regions, as well as to decrease regional gaps especially between West- and East Indonesia. This includes development/increasing/rehabilitaion or maintenance of roads and bridges that fall under the jurisdiction of the local government.

4. DAK for trade facilities in the subfield of trade facilities and infrastucture development to fullfill development/revitalization target of 1,000 public market in 2015.

5. DAK for healthcare in the subfield of referral services to fullfill the standard of service facilities and infrastructures. This is done to promote the quality of services fo mother and child healthcare in hospitals and also to reduce the death rate of mothers, babies and children. These matters are to be comprehensively covered in those referral hospitals through the following: (i) Hospitals for obstetric and neonatal comprehensive emergency care (PONEK); (ii) Emergency rooms (IGD) in hospitals including SPGTD ambulances, chemical and electrolyte labs, blood and hematology testing; (iii) Intensive care units (ICU) in hospitals; (iv) Blood transfusion units (UTD) in hospitals; (v) Blood banks in BDRS I hospitals; (vi) Class III beds.

The appointment of regions to receive additional DAK to support priority programs of the Ka-binet Kerja is done based on certain criteria that are determined by related technical ministries that mirror the needed facilities and infrastructures by individual fields for the additional DAK to support priority programs of the Kabinet Kerja. Meanwhile, determination of the size of the allocation for each region receiving additional DAK to support priority programs of the Kabinet Kerja is done based on general criteria (net fiscal index/IFN), special criteria (regional index/IWK) and technical criteria (technical index/IT).

Programs/activities funded from additional DAK to support priority programs of the Kabinet Kerja is done by following technical specifications made by the related technical ministries. Those technical specifications are focused on programs/activities that are priorities to the government in its respective fields. Additional DAK P3K2 and regional proposals that are ap-proved by the DPR can be used on spending to support the implementation of additional DAK programs that are non-physical like planning and controlling in the amount of 3-5% from the total additional DAK allocation for each respective field. This is mandated in the presidential decree that controls details of the 2015 APBNP that is furthermore elaborated in even more details in the technical specification for the implementation of the additional DAK. Meanwhile,



Chapter 4

local governments that receive additional DAK to support priority programs of the Kabinet Kerja and regional proposal DAKs that are approved by the DPR must provide matching fund in the 2015 APBD in the amount of 0%.

4.3.3 Changes to Policy and Budgeting of the Special Autonomy Fund

To support the implementation of the special autonomy in Aceh, Papua and West Papua, as mandated by Law No. 35 from 2008 that changed and confirmed the government decree in lieu of the law No. 1 from 2008 about changes to Law No. 21 from 2001 on special autonomy for Papua to Law, and as mandated by Law No. 11 from 2006 about the allocation of special autonomy fund to the government of Aceh. The two special autonomy funds allocated for the provinces of Papua and West Papua are equal in the amount of 2.0% of the national DAU limitation. The division of that special autonomy is divided as such: 70.0% for Papua, and 30.0% for West Papua, both to be used to fund education and healthcare. Also, for special funding of infrastructures, there is also another additional funds allocated for the special autonomy, the amount of which is discussed between the government and the DPR in accordance with the state’s finance. Meanwhile, the special autonomy fund for Aceh is also in the amount of 2.0% from the national DAU limitation; and it can be used to fund building and maintenance of infrastructures, economic empowerment, poverty alleviation, and provision of education, healthcare and social services.

In the 2015 APBNP there is an allocation of Rp17,115.5 trillion for the special autonomy fund, an increase of Rp500.0 trillion or 3.0% from its limitation in the 2015 APBN, which was Rp16,615.5 trillion. This rise in the allocation for the special autonomy fund is caused by an increase in the additional infrastructure fund for the special autonomy in the province of Papua and West Papua, each in the amount of Rp250.0 trillion. In the 2015 APBNP, the amount allocated for additional infrastructures is Rp.2,250.0 trillion for Papua and Rp750.0 trillion for West Papua.

4.3.4 Changes to Policy and Budgeting of the Rural FundsAs mandated by Law No. 6 from 2014 about the village, especially to support village earnings to fund matters under the jurisdiction of the village like village governance, village development, rural community development and the people’s empowerment, there is an allocation of village fund in the amount of Rp9,066.2 trillion in the 2015 APBNP. In accordance with the government’s vision to build Indonesia from the periphery within the unity of the NKRI, there is a need to allocate more fund to strengthen developments in regional- and village areas. For that purpose, there is additional allocation of village fund in the amount of Rp11,700.o trillion in the 2015 APBNP. With this additional fund, the total of village fund from the APBN is Rp20,766.2 trillion.

As mandated by Law No. 6 from 2014, that village fund will be allocated through a transfer mechanism to the regency/city government. Based on the allocation of village fund for each regency/city, the regent or mayor will allocate the village fund to every village based on the number of villages and by considering the number of citizen, poverty level, area and geographical difficulties to improve their wellbeing and to equalize rural development. Because there are differing numbers of villages in regency/city areas, to avoid relatively big gaps in the village fund allocation to each regency/city, the government must equally divide the funds, but they must also consider allocation based on the size of the population, the area, poverty level and geographical difficulties.

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Box 4.2PRIORITY PROGRAMS FOR RURAL FUNDS

Rural fund from the APBN is prioritized to fund the implementation of rural development and the empowerment of the people. Priorities related to rural development include development and maintenance like: (1) Village infrastructures like boat moorings and residential streets; (2) Rural roads that connect residential areas to farming areas and health facilities like clean water, environmental sanitation and posyandu; (3) Education and cultural facilities and infrastructures like public libraries, early childhood education and training centers; and (4) productive economic facilities and infrastructures like village markets, crops nurseries, village barns, agricultural land clearing and development of the fish and livestock business. Priorities related to the empowerment of the people include things like: (1) Training for economic business, agriculture, fishery and trade; (2) Training for related technologies; and (3) Increasing the capacity of the people by forming economic, agriculture, fishing, craftsmen and women cooperation.

4.4 Changes to Policy and Budgeting of the Education FundThere is a decrease of the government expenditure budget in the 2015 APBNP that is also followed by a decrease in the education budget, such that article 31 point (4) in the 4th Amendment to the 1945 Constitution can be fulfilled by maintaining fiscal balance. In the 2015 APBNP the education budget is Rp408,544.7 trillion. This amount reflects a ratio of 20.59% to the overall state spending budget. This is a decrease of Rp587.0 trillion from its allocation in the 2015 APBN, in line with the decreased government expenditure. This change is reflected by the education budget through the central government, as well as through transfer to region and rural funds.

Education budget through the central government expenditure increased by Rp127.5 trillion from the 2015 APBN and is now Rp154,363.8 trillion. This change is caused by: (1) Elimination of the education budget reserves that was allocated to be Rp9,268.1 trillion in the 2015 APBN as a result of adjustments to the decrease in government expenditure; (2) A decrease if budget allocation from debts and grants at eh ministry of education and culture in the amount of Rp625.7 trillion; (4) Additional priority budgeting for the development of basic education needs in the amount of Rp7,539.8 trillion; and (4) Additional budget for the ministry of research, technology and tertiary education in the amount of Rp1,200.0 trillion. This increase in budget for those core education needs is planned to be used to extend the KIP, including card printing fees, leaflets and KIP sending fees that are allocated through the ministry of education and culture in the amount of Rp7,102.8 trillion and through the ministry for religious affairs in the amount or Rp427.0 trillion. This extension in the KIP participants is to support the 9 year compulsory education and a universal high school education (compulsory 12 years of education).

Also, education budget through the transfer to region and rural funds is lower by Rp714.5 million from its allocation in the 2015 APBN to be Rp254,180.9 trillion in the 2015 APBNP. This decrease is caused by adjustments of the education fund through the education DBH due to a decrease in earnings from fuel resources in the 2015 APBNP. More details of the education budget in the 2015 APBNP can be founds in Table 4.20.



Chapter 4

4.5 Projection of the Medium Term Government Expenditure

4.5.1 Projection of the Medium Term Central Government Expenditure

In principle, the projection for the medium term central government expenditure in the period between 2016-2018 refers to medium term development plans by the government, as elaborated in the RPJMN 2015-2019. Also, the projection for the medium term central government expenditure is also planned while referring to two basic matters: (1) The size of the medium term core macroeconomic assumptions in line with the latest economic trends; and (2) Policies that have been and will be implemented by the government within the medium term time frame. For that, generally the central government policies are as follows:

First, central government expenditure is directed to support the implementation of missions and developments in the RPJMN 2015-2019. Second, to support the implementation of effective and efficient governance through the following: (1) Continuing bureaucratic reforms while still maintaining the wellbeing of civil servants and retired civil servants; (2) Controlling spending to support governance; and (3) spending efficiency, especially in matters concerning travel and meeting packages. Third, to support infrastructure development in line with priority agendas, to stir strategic domestic economy or to give a big chance for economic growth in several important sectors like food, energy, maritime; and other important regions like villages, peripheral regions and East Indonesia. Fourth, to support investment growth that increases the people’s productivity and competitiveness. Fifth, to continue the implementation of the healthcare and workforce SJSN. Sixth, to support efforts to increase the quality of education by maintaining budget allocation for education to fulfill the minimal ratio of the education budget of 20% as mandated by the 1945 Constitution. To support the efficiency and effectiveness of various government programs, there is also a need to synchronize between central- and regional development plans.

Also, from the budget allocation side, central government expenditure development and its projection to support medium term government programs between the period of 2010-2018 can be seen in Graph 4.1.

` ` ` `

Nominal %

I. Education Fund from Central Government 128.176,5 154.236,3 154.363,8 127,5 0,1

A. Education Fund from Line Ministries 128.176,5 144.968,2 154.363,8 9.395,5 6,5 B. Education Fund Reserves (General Treasury Account) - 9.268,1 - (9.268,1) (100,0)

II. Education fund from Transfer to Region and Rural Fund 238.839,0 254.895,4 254.180,9 (714,5) (0,3)

III. Education Fund from Financing Expenses 8.359,1 - - - -

Education Fund 375.374,5 409.131,7 408.544,7 (587,0) (0,1)

Government Expenditure 1.876.872,8 2.039.483,6 1.984.149,7 (55.333,9) (2,7)

Education Fund Ratio (%) 20,00 20,06 20,59 0,53 2,6


Components

2014

TABLE 4.20 EDUCATION FUND, 2014 - 2015

APBNP APBN APBNPChanges

2015

(billion Rupiah)

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Those central government expenditure policies are categorized mainly into K/L- and BA BUN spending policies.

Medium term K/L spending policies support the achievement of targets from programs that will be implemented as follows. First, to support the implementation of various medium term governmental priority programs as stated in the RPJMN 2015-2019. Second, to continue efforts to increase budget efficiency by limiting less productive spending (like travel and meeting packages, building construction, provision of vehicles and advertising) and to reallocate those funds for more productive spending. Third, to continue the improvement on the budgeting system through the following methods: (1) Application of budgeting based on performance and the medium term expenditure framework; (2) Program and budget refocusing; and (3) avoiding duplicate programs. Fourth, to improve the absorption and quality of K/L spending so that it can have optimal use for the economy. This is mainly done through improvement on the administration of budgeting like the completion of budget document revisions, the implementation of early auction processes, controlling of projects more intensively, as well as the implementation of a more transparent, professional and consistent reward and punishment system.

Also, the following are explanation for medium term spending through BA BUN (non K/L spending) for several programs:

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2.000

2010 2011 2012 2013 2014APBNP

2015APBNP

2016Proyeksi

2017Proyeksi

2018Proyeksi

Tri

llio

n R

p

Line Ministries


GRAPH 4.1DEVELOPMENT AND PROJECTION OF CENTRAL

GOVERNMENT EXPENDITURE, 2010-2018(Trillion Rupiah)



Chapter 4

Medium term policies on state debt management by the central government will continue to be allocated for debt interest payment as follows: (1) to fulfill the government’s obligations punctually and rightfully to maintain credibility and funding balance; and (2) to minimize and maintain the efficiency of debt interest payment through choosing the optimal debt instrument composition and by implementing hedging transactions.

Medium term policies on subsidy management are as follows: (1) to control the budget on energy subsidy (BBM and electricity) through controlling the consumption of subsidized BBM, continuing the conversion of BBM to BBG and supporting new and renewable energy like biofuel, as well as increasing the use of non BBM fuels in power plants; (2) to restructure subsidy policies so that it can become more just and right on target; (3) To use a subsidy accounting method that is based on transparent data; and (4) to restructure the distribution of subsidy so that it can become more accountable.

4.5.2 Projection of Medium Term Transfer to Region and Rural Funds

Since the beginning, the purpose and policies undertaken in relation to the transfer to region and rural funds are meant to accelerate regional development, to increase the quality of public services and to decrease the gap in inter-region public services. To reach a good quantity and quality in public services, there needs to be improvement in the transparency and accountability of the transfer to region and village fund policies, both its mechanism and its use must continue to be implemented and improved. Increasing the quantity and quality of regional public services will be done through fund allocations that are block grants and specific grants, through channeling from DBH underpayment that has been audited by the BPK, through a more effective, selective and optimal DAK allocation, through allocation of the special region of Yogyakarta fund for its autonomy, and through the allocation of the village fund to empower the people and to build the villages.

Allocation of block grants (DAU and DBH) is a part of the government’s effort to give local leaders full power to manage funds that are trusted to him. This means that the local governments are given full trust to harness those funds for development in its respective region and for public services. DAU management in the future is hoped to have an increased accountability to fulfill the minimum service standard (SPM) as one of the consequences of the transfer of power from the central- to the local government. The SPM achievement target must be implemented gradually, in its fields or level of activities to reach the targets. Therefore, to support efforts to optimally harness the DAU funds, local governments are hoped to always provide all the components of the fund management. This includes the human resources and implementation rules.

The capacity of the local government to support the achievement of the SPM is also helped by the strengthening of the DBH that will have an improved awarding system. However, underpayment of the DBH cannot be avoided every year. Underpayment is the right of the local government that must be granted to them. However, estimates of the underpayment must fulfill the accountability and governance qualifications. For that, DBH underpayment will be allocated in the APBN based on BPK audits.

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4-35



Aside from block grants, the government also sees fit the allocation of transfer to region fund in the form of specific grants. This is to support the achievement of the national priority in the DAK region as funds that are categorized as specific grants. This is to allocate funds to the local government such that it can be used for physical development of those regions according to technical specification that have been predetermined. Allocation and harnessing of the DAK will always be strengthened by targeting the DAK fields, from field coverage, the funded programs and the receiving local governments. The DAK allocated to local regions are hoped to be used by the local government to support the achievement of the national priority according to technical specifications that have been predetermined. However, to ensure a more effective DAK implementation, technical specification will be planned to be flexible while keeping things accountable and transparent. Outstanding DAK that are not absorbed into the budget implementation can hinder the achievement of targets and can lead to the accumulation of budget financing surpluses (SiLPA). Therefore, to encourage regions to focus using DAKs that they have received, the government will count unabsorbed DAK as a decrease in DBH or DAU that will be received by those regions. Also, fields to be funded by DAK will be selected in line with priority programs of the Kabinet Kerja.

In the period between 2016-2018, the transfer to region and rural funds are projected to increase significantly (see Graph 4.2). This is done to achieve Nawacita, the President’s visions and missions, as well as to increase regional development. Fiscal decentralization implementation will also be strengthened by ensuring that the funding is in line with the principle of money follows functions. Also, as mandated by Law No. 6 from 2014, the village fund will gradually be increased until it reaches 10.0% of and outside of the transfer to region fund. In its fulfillment, performance accountability and the economic scale from the funding must be closely controlled. On the other hand, the government also tries to increase government income to support allocation increases for the transfer to region and rural funds.

28,0

29,0

30,0

31,0

32,0

33,0

34,0

35,0

36,0

37,0

0

200

400

600

800

1.000

1.200

2010 2011 2012 2013 2014APBNP

2015APBNP

2016Proyeksi

2017Proyeksi

2018Proyeksi

Pe

rce

nt

GRAPH 4.2DEVELOPMENT AND PROJECTION OF TRANSFER TO REGION AND RURAL FUND,

2010-2018

Balanced Fund Special Autonomy Fund Special Fund for DIYOther Transfer Rural Fund % to Government Expenditure


tril

lio

n R

up

iah


Chapter 5Budget Deficit, Budget Financing, Medium Term Projection, and Fiscal Risk Policies Revised

CHAPTER 5BUDGET DEFICIT, BUDGET FINANCING, MEDIUM TERM PROJECTION, AND FISCAL RISK POLICIES

REVISED5.1 General In APBNP 2015, government plans to lessen budget deficit from 2.21 percent to 1.90 percent of GDP. It is primarily devoted to maintain fiscal sustainability. With the decline in the budget deficit, budget financing also declines by 9.51 percent or Rp23,387.8 billion.

In addition, financing policy in APBNP 2015 refers to APBN 2015, with some improvement to accommodate basic assumptions of macroeconomics policy and the additional allocations or new allocation. The changes are addressed to budget financing and revenue financing. Changes in budget financing are: (1) additional allocation of state capital (PMN) on SOEs, (2) allocation of investment financing for the establishment of a BLU Manajemen Aset, (3) anticipation allocation fund to PT Lapindo Brantas Inc. / PT Minarak Lapindo Jaya, and (4) allocation of PMN and reserve financing to social security agency (BPJS Kesehatan) for social security fund program (DJS Kesehatan). The allocation of additional PMN to SOEs is greater than others. The allocation of additional PMN to SOEs is supported so those SOEs as agents of development may support the agenda of national priorities (NAWACITA). The allocation of additional PMN to SOEs is used to increase the capacity of businesses and to improve the capital structure, so the ability of companies regarding funding can be improved. Priority programs which are supported by SOEs, such as maritime development program, food sovereignty program, infrastructure and connectivity development, security and defence industry development, and the sovereignty of national economy.

With an increase in budget financing, revenue financing is also planned to increase in order to fund budget financing. Those changes are: (1) increase of revenue from repayments of subsidiary loans, (2) increase in government bonds (Net SBN), and (3) increase in foreign loan drawing (gross). Main source of revenue financing to fund an increase in budget financing is increasing government bonds issuance, regarding to limitations of other financing sources. In fulfilling the target of an increase in government bonds, the government will apply the principle of caution and will consider various factors, such as costs and credit risk, financial market conditions, the capacity of market absorption, and the needs of the state treasury.

5.2 Deficit and FinancingThe decline in the budget deficit from Rp245,894.7 billion or 2.21 percent to GDP to Rp222,506.9 billion or 1.90 percent resulted in decreasing budget financing with the same amount.

However, in budget financing there are some changes, either in loan financing and non loan financing. Non loan financing in APBNP 2015 is estimated at negative Rp56,874.0 billion or changesfor Rp47,912.7 billion compared with the target in APBN 2015 at negative Rp8,961.3 billion.While loan financing in APBNP 2015 is targeted at Rp279,380.9 billion or increased by Rp24,524.9 billion compared with the target in APBN 2015 at Rp254,856.0 billion. Deficit details and budget financing in 2014-2015 are presented in Table 5.1.


Chapter 5

Budget Deficit, Budget Financing, Medium Term Projection, and Fiscal Risk Policies Revised

An increase in the loan financing is caused by an increase in nonloan financing, especially for PMN. This has led to an increase in amount of a government loan. As an illustration, the growth of the deficit and the government loan to GDP ratio are served on a Graph 5.1 and Graph 5.2.

2014

Nominal %

A. REVENUES 1.550,1 1.793,6 1.761,6 (31,9) (1,8)

B. EXPENDITURES 1.770,6 2.039,5 1.984,1 (55,3) (2,7)

C. BUDGET SURPLUS/DEFICIT (A - B) (220,5) (245,9) (222,5) 23,4 (9,5)

% Deficit to GDP (2,18) (2,21) (1,90) - -

D. BUDGET FINANCING (I + II) 245,0 245,9 222,5 (23,4) (9,5) I. Non Loan (4,3) (9,0) (56,9) (47 ,9) 534,7 II. Loan 249,4 254,9 27 9,4 24,5 9,6

Sou rce: Min ist ry of Fin a n ce

TABLE 5.1DEFICIT AND BUDGET FINANCING, 2014-2015

(trillion rupiah)

Description

2015

LKPP Unaudited

APBN APBNPDifference

0,7

1 ,1

1 ,9

2,3 2,2 2,2

1 ,9

0,0

0,5

1,0

1,5

2,0

2,5

(50,0)

0,0

50,0

100,0

150,0

200,0

250,0

300,0

2010 2011 2012 2013 2014LKPP

Unaudited

2015 APBN 2015 APBNP

triillion rupiah persen

Non Loan Loan Budget Financing % Deficit to GDP (RHS)

GRAPH 5.1DEFICIT AND BUDGET FINANCING DEVELOPMENT,

2010-2015

Sou rce: Ministry of Finance



5.2.1 Non Loan Financing Non loan financing policy changes in APBNP 2015 are:

1) Supporting national priorities on the new government agenda which were set out in the concept of NAWACITA, such as increasing productivity of the people and competitiveness on the international market, enhancing the role of SOEs as an agent of development and improving investment governance;

2) Supporting the welfare program completion policy, such as allocation for PT Lapindo Brantas Inc./ PT Minarak Lapindo Jaya to ensure land and building to the victim community in Sidoarjo mudflow affected area and the addition of PMN and funding reserve to BPJS Kesehatan for the sustainability of the health insurance program (JKN); and

3) Allocating investment financing in order to support the asset management formation of BLU.

Non loan financing in APBNP 2015 is estimated at negative Rp56.874,0 billion, changed by Rp47,912.7 billion compared to the target in APBN 2015 of negative Rp8,961.3 billion. This is caused by an increase domestic bank funding and an increase in allocation of non domestic bank funding. The increase in domestic bank funding is derived from repayments of subsidiary loans, whereas changes in non domestic bank funding are in the government investment, the allocation for PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya, funding reserve to BPJS Kesehatan for the sustainability of the health insurance program (JKN), and the decrease in the government’s mandatory obligation. Meanwhile, other nonloan financing components, which is revolving fund allocation has not changed. Non loan financing details in APBNP 2015 can be shown in Table 5.2.

2 4,5%

2 3,1% 2 3,0%

2 4,9%2 4,7% 2 4,3%

2 5,2%

21,5%

22,0%

22,5%

23,0%

23,5%

24,0%

24,5%

25,0%

25,5%

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2010 2011 2012 2013 2014LKPP

Unaudited

2015 APBN 2015 APBNP

Outstanding Loan GDP* Debt to GDP Ratio (RHS)

(t riliun rupiah) (%)

GRAPH 5.2DEVELOPMENT AND PROJECTION OF GOVERNMENT DEBT RATIO,

2010-2015

*Nominal GDP using 2010 seriesSou rce: Ministry of Finance


Chapter 5


5.2.1.1 Domestic Bank Budget deficit financing from non-loan sources from domestic banks in APBNP 2015 is from the repayments of subsidiary loanswhich is estimated at Rp4.785,4 billion.This increased by Rp317,9 billion compared with the target in APBN 2015 at Rp4.467,5 billion.The increase is primarily caused by revenue from PT BPUI payments which will be converted into PMN to PT BPUI, and the rupiah exchange rate against the United States dollar which was using an assumption that was set in APBN 2015.

5.2.1.2 Non Domestic BankBudget deficit financing from nonloan sources from nondomestic bank in APBNP 2015 is estimated to reach negative Rp61,659.3 billion, which changed byRp48,230.6 billion from its allocation in APBN 2015 at negative Rp13,428.8 billion. The increase is mainly because of the government investment fundadditional allocations. In the meantime, government’s mandatory obligation is decreasing. Details explanation about the allocation of government investment fundand the government’s mandatory obligationwill be described as follows.

5.2.1.2.1 Government Investment Fund In APBNP 2015, government investment fund is estimated at negative Rp58,844.1 billion, changes by Rp46,197.0 billion compared to the target in APBN 2015 at negative Rp12,647.1 billion. The adjustment is caused by additional investment yield, additional allocations to PMN, and the additional allocations for investment financing in order to support the asset management formation of BLU. Meanwhile, revolving fund allocation has not changed. Details about government investment fund in APBN 2015 and APBNP 2015 are presented in Graph 5.3.

2014

Nom inal %

A. Dom estic Banking 5,0 4,5 4,8 0,3 7 ,1 1 . SLA Principal Pay ment 5,0 4,5 4,8 0,3 7 ,1 2. Budget Surplus - - - - -

B. Dom estic Non Banking (9,3) (13,4) (61,7 ) (48,2) 359,2 1 . Privatization 0,0 - - - - 2. Assets Management Return 0,5 0,4 0,4 - - 3. Government Investment Fund (8,9) (12,6) (58,8) (46,2) 365,3 4. Mandatory Guarantee (1 ,0) (1 ,1) (0,8) 0,3 (25,5) 5. Contigency Fund for PT Lapindo Brantas Inc./PT Minarak Lapindo Jay a - - (0,8) (0,8) - 6. Financing Reserve for BPJS Kesehatan for DJS Kesehatan Program - - (1 ,5) (1 ,5) -

(4,3) (9,0) (56,9) (47 ,9) 534,7


T otal

TABLE 5.2NON LOAN FINANCING, 2014-2015

(trillion rupiah)

Description

2015

APBN APBNPDifferenceLKPP

Unaudited



Investment Yield

The additional allocations of investment yield in APBNP 2015 are the government investment funds which were allocated for government investment centre (PIP) in the past 2006 until 2013 will be allocated to be PMN toPT SMI (Persero). Investment yield refers government plan to increase the financing capacity of PT SMI (Persero) in the infrastructure development.

Capital Participation (PMN)

In the APBNP 2015, PMN allocation is planned to reach Rp70,372.8 billion, or increases by Rp63,053.6 billion from its allocation in APBN 2015 Rp7,319.2 billion. The increase of PMN allocation is used for PMN to SOEs and other PMN, while PMN to international organization/institution (LKI) decreased. An explanation on changes to the PMN will be described as follows.

A. PMN to SOEs

PMN allocation to SOEs government in APBNP 2015 is expected to reach rp64.883,9 billion, increased by Rp59.776,6 billion compared to its allocation in APBN 2015 at Rp5.107,3 billion.This allocation is used to support the national priorities through several priorities program, such as: (1) food sovereignty program to Perum Bulog, PT Pertani, PT Sang Hyang Seri, PT Perikanan Nusantara, Perum Perikanan Indonesia, PT Garam, PTPN III, PTPN VII, PTPN IX, PTPN X, PTPN XI, and PTPN XII; (2) infrastructure and connectivity development program to PT Angkasa Pura II, PT Hutama Karya, Perum Perumnas, PT Waskita Karya Tbk, PT Adhi

- - - - - 0,8

19,1

6,0

9,3 8,5

4,0 5,4

7 ,3

7 0,4

5,3

8,8 7 ,0

3,3 3,5

6,1 6,1

- - -

4,6

- - -- - - - - -2,0

-

10,0

20,0

30,0

40,0

50,0

60,0

70,0

80,0

2010 2011 2012 2013 2014LKPP Unaudited

2015APBN

2015APBNP

GRAPH 5.3GOVERNMENT INVESTMENT FUND, 2010 - 2015

(trillion rupiah)

Investment Return

Government Participation

Revolving Fund

Investment Financing for PT Inalum takeover

Investment Financing in regard of establishing AssetesManagement BLU



Chapter 5


Karya Tbk, PT Kereta Api Indonesia, PT Penjaminan Infrastruktur Indonesia, PT Sarana Multi Infrastruktur, and PT Perusahaan Listrik Negara; (3) maritime development program to PT Pelindo IV, PT Pelni, PT Djakarta Lloyd, PT ASDP, PT Dok dan Perkapalan Kodja Bahari, PT Dok dan Perkapalan Surabaya, and PT Industri Kapal Indonesia; (4) security and defence industry development program to PT Dirgantara Indonesia and PT Pindad; (5) the sovereignty of national economy program to PT Permodalan Nasional Madani, PT Perusahaan Pengelola Aset, PT Pengembangan Pariwisata Indonesia, PT Aneka Tambang, PT Askrindo, and Perum Jamkrindo; and (6) non cash to PT Bahana Pembinaan Usaha Indonesia.

PMN additional details to SOEs per program in APBNP 2015 are served in Graph 5.4 and PMN to SOEs details in 2014-2015 are presented in Table 5.3.

8.170,0

5.150,0

1 .100,0

38.356,6

6.7 50,0 250,0

GRAPH 5.4ADDITIONAL GOVERNMENT PARTICIPATION IN

APBNP 2015(billion rupiah)

Food Sovereignty

Maritime

Defence and SecurityIndustry

Infrastructure andConnectivity

National EconomicIndependence

Non-cash




Whereas PMN explanation to each SOEs is served as follows.

2014

Nominal %1 Perum Jamkrindo 1.300,0 2 PT Askrindo 700,0 3 PT Sarana Multigriya Finansial 1.000,0 1.000,0 1.000,0 - - 4 PT Geo Dipa Energi - 607,3 607,3 - - 5 PT PAL Indonesia - 1.500,0 1.500,0 - - 6 PT Garam - - 300,0 300,0 - 7 PT Pertani - - 470,0 470,0 - 8 PT Sang Hyang Seri - - 400,0 400,0 - 9 PT Perikanan Nusantara - - 200,0 200,0 -

10 Perum Perikanan Indonesia - - 300,0 300,0 - 11 Perum Bulog - - 3.000,0 3.000,0 - 12 PTPN III - - 3.150,0 3.150,0 - 13 PTPN VII - - 17,5 17,5 - 14 PTPN IX - - 100,0 100,0 - 15 PTPN X - - 97,5 97,5 - 16 PTPN XI - - 65,0 65,0 - 17 PTPN XII - - 70,0 70,0 - 18 PT Permodalan Nasional Madani - - 1.000,0 1.000,0 - 19 PT Angkasa Pura II - - 2.000,0 2.000,0 - 20 PT ASDP - - 1.000,0 1.000,0 - 21 PT Pelni - - 500,0 500,0 - 22 PT Djakarta Lloyd - - 350,0 350,0 - 23 PT Hutama Karya - - 3.600,0 3.600,0 - 24 Perum Perumnas - - 2.000,0 2.000,0 - 25 PT Waskita Karya Tbk - - 3.500,0 3.500,0 - 26 PT Adhi Karya Tbk - - 1.400,0 1.400,0 - 27 PT Dok dan Perkapalan Surabaya - - 200,0 200,0 - 28 PT Dok dan Perkapalan Kodja Bahari - - 900,0 900,0 - 29 PT Indutri Kapal Indonesia - - 200,0 200,0 - 30 PT Pelindo IV - - 2.000,0 2.000,0 - 31 PT Sarana Multi Infrastruktur - 2.000,0 20.356,6 18.356,6 917,8 32 PT Kereta Api Indonesia - - 2.000,0 2.000,0 - 33 PT Penjaminan Infrastruktur Indonesia - - 1.500,0 1.500,0 -

34 PT Pengembangan Pariwisata Indonesia - - 250,0 250,0 - 35 PT Dirgantara Indonesia - - 400,0 400,0 - 36 PT Pindad - - 700,0 700,0 - 37 PT BPUI - - 250,0 250,0 - 38 PT Antam - - 3.500,0 3.500,0 - 39 PT Perusahaan Pengelola Aset - - 1.000,0 1.000,0 - 40 PT Perusahaan Listrik Negara - - 5.000,0 5.000,0 -


3.000,0 5.107,3 Total 64.883,9 59.776,6 1.170,4

Difference

1.000,0 - - -

TABLE 5.3GOVERNMENT PARTICIPATION TO SOEs, 2014-2015

(billion rupiah)

No. SOEs

2015

LKPPUnaudited

APBN APBNP


Chapter 5


PMN to Support Food Sovereignty Program

PMN to SOEs to support sovereignty food program, is allocated to support food self-supported program, seed procurement, sugar and salt productions, and national fishing. PMN details to support sovereignty food programare served on Graph 5.5.

PT Garam (Persero) is the only SOE which working in the area of salt trade and industry. The position is strategic in terms of its existence in the salt delivery. PT Garam has its own salt land in Madura which about 5,340 ha.In the normal condition, it can produce salt for average of 300,000 tons which contribute about 20 percent of national salt consumption needs.The national current salt production volume is 2.2 million tons, while the demand is of 3.9 million tons, so Indonesia has a shortage of salt around 1.7 million tons. The use and benefitof PMN to PT Garam (Persero) are shown in Table 5.4.

3.000,0

47 0,0

400,0 200,0 300,0 300,0

3.150,0

17 ,5

100,0 97 ,5 65,0 7 0,0

GRAPH 5.5GOVERNMENT PARTICIPATION FOR FOOD SOVEREIGNTY

PROGRAM (billion rupiah)

Perum Bulog PT Pertani PT Sang Hyang SeriPT Perikanan Nusantara Perum Perikanan Indonesia PT GaramPTPN III PTPN VII PTPN IXPTPN X PTPN XI PTPN XII


No.I

-

---

II---------

Sources: Ministry of SOE

Controlling salt price in the marketsIncreasing folk-produced saltCreating employment opportunities

Increasing production facilities and capacities of good quality saltStrengthening capital structure ang improving financial state

Benefits:

Increasing contribution to the country through tax and dividenLessening imported salt dependencyAccelerating PT Garam nearby economic sector Supporting food soverignty program and national salt self-production program

Centralization of salt processing plant and industry to increase its quality.Incrementation on absorbtion of folk-produced salt with competitive price.Management on potential salt field in Teluk Kupang in order to increase national production on industrial quality salt.

TABLE 5.4OBJECTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION TO PT GARAM

DetailsObjectives:

Installment of high density polyethylene (HDPE) Geomembrane in crystalized table on salt field, which affect on increasing high quality salt.



PT Pertani (Persero) is SOE which operates in the agricultural sector, through the on-farm activities and off-farm.All business activities of the company are integrated in the central warehouse agribusiness (PPA) as a center of business control business of PT Pertani. On-farm activities which have been done by the company covering agriculture production medium, agriculture machinery procurement, and land management. Meanwhile, off-farm activities are covering the process, the warehouse, the trade, and the management of assets. The use and benefit of PMN to PT Pertani (Persero) can be shown in Table 5.5.

PT Sang Hyang Seri (Persero) is SOE who provides agricultural seed, including seeds of food crops, horticulture, plantation, forestry, livestock, and fishery. The core businesses of PT Sang Hyang Seri (Persero) are produce, trade, export/import seeds and/or crops, research services, certification , education, counseling, and other service in the seeds field. The use and benefit of PMN to PT Sang Hyang Seri (Persero) are presented in Table 5.6.

No.I

---

IIA

- Increasing capacity- Increasing production facilities utilization- Increasing potential margin

B

C for society


To increase production and marketing of unhulled paddy

TABLE 5.5OBJECTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION TO PT

PERTANI (Persero)

DetailsObjectives:

To increase production and marketing of seeds

increasing job opportunities and productivity as well as farmers' welfare

To increase production capacity through investment on production means Benefits

for the company

for governmentaccelerating rice self-sufficient accomplishment

No.I

-

-

-

IIA. - increasing production capacity

- increasing seeds availability, either subsidized (PSO) or market seeds (nonPSO)

- increasing industry capacityincreasing stakeholder trust- Assuring company sustainability

B- Assuring government PSO accomplishment - increasing development of micro enterprises - increasing tax contribution


TO revitalize farming machinery and processing machinery owned by individual Benefits:For the company:

For the government:

To build seeds processing plant in four location in order to increase company's production capacity


SANG HYANG SERI (Persero)

DetailsObjectives:

To strengthen capital structure in order to facilitate company to obtain production materials to comply with captive market PSO


Chapter 5


PT Perikanan Nusantara (Persero) is SOE which operates in fisheries field. The business and fishery activity are integrated from upstream to downstream (integrated fisheries industry) including preproduction, production, diversified products, and local and international marketing. PT Perikanan Nusantara (Persero) has the infrastructure like fishing equipment, integrated processing, marketing, and the supporting infrastructure such as ice factory, docking, ports, and other fishery services. The use of and benefits PMN fisheries to PT Nusantara (Persero) presented in Table 5.7.

Perum Perikanan Indonesia is a company that owns major business in goods, services, and business system development of fisheries service to users of fishing ports, which are fishermen in particular and the fishery community in general. Perum Perikanan Indonesia has a strategic position to boost regional economic growth or national through the development of fisheries and maritime sectors. The use and benefit of PMN toPerum Perikanan Indonesia are explained in Table 5.8.

No.I

-

II-

-

-

-

-


increasing export growth and decreasing imported fish, so that Indonesia's fishery potential becoming national economic booster strengtheing production with increasing quality control in order to give value added for fisheries industry efficiency in cathcing and processing using technology, hence improving global competitiveness and optimizing profit market assurance for fishermen while PT Perikanan Nusantara acting as off taker , so that could increase fishermens' wellbeingbridging individual and coorporation through fishermen-coorporation partnership program

Benefits:


PERIKANAN NUSANTARA (Persero)

DetailsObjectives:

To increase purchasing capacity of fishermen's fish and downstreaming fisheries industry through improvement of product value added, in-land processing facilities and logistic as well as marketing system

No.I

-

-

IIA

- improving capital structure- increasing capacity through increasing production so that can contribute

more dividend

B- increasing employment opportunities in maritime sector- fish and prawn price stabilisation, as well as national facilities

simultaneously giving benefits to society and fishermen Sources: Ministry of SOE

For the governement

For the company:

TABLE 5.8OBJECTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION TO

PERUM PERIKANAN INDONESIA

DetailsObjectives:

Benefits:

To support government food sovereignty and maritime development sector program To support aforementioned program through ships docking rehabilitation, ice plantation recondition, water tunnels rehabilitation, fish and prawn feeding factory in 8 (eight) company regions



Perum BULOG is a state corporate that works in food logistics field.The scope of the business covers logistics business/a warehouse, survey and pest eradication, plastic sacks provision, transportation business, food trading and retail business.Government has also mandated several duties to Perum BULOG which are: (1) implement the policy of the purchase of grain/rice in the country correspond to the government purchasing price (HPP) in domestic grain and rice procurement program; (2) provide and distribute the subsidized rice for low income society in Raskin program; and (3) provide and distribute the rice to maintain price stability, cope emergency cases, natural disaster, and food security.The use and benefit of PMN toPerum BULOG are explained in Table 5.9.

PT Perkebunan Nusantara III (Persero) is SOE which was set as the holding company of all plantation SOEs, so the business is the consolidation activities of agro business and agro industrial sector for palm oil, the rubber plant, tea, cane, and various plants.

Considering that PTPN III (Persero) as the holding company so to keep the effectiveness of the holding operation, government will add its PMN by Rp3.500 billion with the scheme: (1) 90 percent or Rp3.150 billion will be given to PTPN III (Persero) and will be delivered to each subsidiary company (PTPN VII, PTPN IX, PTPN X, PTPN XI and PTPN XII) as what they proposed; and (2) by 10 percent or Rp350 billion are given directly to PTPN VII, PTPN IX, PTPN X, PTPN XI and PTPN XII. So that the stock composition ownership of PTPN III and the subsidiary company will not be changed, which are 90 percent shares are owned by PTPN III (Persero) and 10 percent is owned by the state.The use and benefit of PMN toPT Perkebunan Nusantara III (Persero) are explained in Table 5.10.

PT Perkebunan Nusantara VII (Persero) is SOE, which set into a subsidiary of PTPN III with their business activities such as agro business and agro industrial for palm oil, the rubber, tea and cane. The use and benefit of PMN toPTPN VII (Persero) are explained in Table 5.11.

No.I

-

-

II--

--


food price stabilisation to with hold inflationincreasing farmers' wellbeing through purchasing unhulled/hulled paddy based on government purchasing price (HPP)acceleration on purchasing unhulled/hulled paddy during harvest season interest efficiency from using bank's fund which charged comercial interest, so that could lessen expenses bear by the government


PERUM BULOG

Details

Benefits:

to lessen dependency on banking credit for capital on Public Service Obligation (PSO) activitiesincreasing capacity in order to give assurance for Perum Bulog in making purchase of 417.473 ton paddy and distribution of Raskin of 696.000 ton for 3 months

Objectives:


Chapter 5


PT Perkebunan Nusantara IX (Persero) is SOE which was set into a subsidiary of PTPN III with their business activities of cultivation and the productionof the rubber tea, coffee, tea, and cane. The use and benefit of PMN toPTPN IX (Persero) are explained in Table 5.12.

No.I

-

-

II-

---


to increase on farm- and off farm-based cane production quality activities in PTPN VII, PTPN IX, PTPN X, PTPN XI, dan PTPN XII


PERKEBUNAN NUSANTARA III (Persero)

DetailsObjectives:

physical investment on sugar plant in order to support domestic sugar self-sufficient and renewable energy from cane

Benefits:increasing national sugar production in order to support domestic sugar self-sufficient and renewable energy from cane lessen intrest expense and increase profit through reducing capital cost increasing tax and dividend contribution to the countryincreasing employment opportunities in surrounding areas

No.I

--

II--


Benefits:reducing interest expenses ang producing more profits from lower capital cost increasing company's contribution through tax and dividend


PERKEBUNAN NUSANTARA VII (Persero)

DetailsObjectives:

Increasing sugar factory capacityincreasing cane production and cane productivity in Bungamayang, Lampung dan Cinta manis, Sumatera Selatan plantations

No.I

-

-

II--

--


to revitalize Mojo sugar factory, Sragen, Central Java and Rendeng sugar factory Kudus Central Java in order to increasi production capacity


PERKEBUNAN NUSANTARA IX (Persero)

DetailsObjectives:

to build investment on two sugar factories with capacity of 10.000 TCD in Central Java in order to support sugar self-sufficiency

Benefits:reducing interest expenses ang producing more profits from lower capital cost increasing investment through capacity or build new factory which are integrated to support sugar self-sufficiency and renewable energy

increasing company's contribution through tax and dividend increasing employment opportunities in surrounding areas



PT Perkebunan Nusantara X (Persero) is SOE which was set into a subsidiary of PTPN III with their business activities such as agro business and agro industrial of cane. The use and benefit of PMN toPTPN X (Persero) are explained in Table 5.13.

PT Perkebunan Nusantara XI (Persero) is SOE which was set into a subsidiary of PTPN III with their business activities such as agro business and agro industrial of cane. The use and benefit of PMN toPTPN XI (Persero) are explained in Table 5.14.

PT Perkebunan Nusantara XII (Persero) is SOE which was set into a subsidiary of PTPN III with their business activities such as the cultivation of plants, production, trade, and business development especially for the rubber plant, coffee, cocoa, tea sugar cane. The use and benefit of PMN toPTPN XII (Persero) are explained in Table 5.15.

No.I

-

-

II----


to develop renewable energy from cane ang cogeneration in Tjoekir sugar factory, Jombang Jawa Timur


PT PERKEBUNAN NUSANTARA X (Persero)

DetailsObjectives:

to optimalize on-farm and off-farm based capacity and quality of cane production in Ngadirejo sugar factory Kediri Jawa Timur dan Gempolkerep sugar factory Mojokerto Jawa Timur

Benefits:more employment opportunities from linked industries economic growthSMEs growth from livestocks and biofertilizer produce by farmerscontribution from tax of sugar industry

No.I

-

--

II---


developing bioethanol and cogenerated power plant


PERKEBUNAN NUSANTARA XI (Persero)

DetailsObjectives:

investment on developing cane-besed industries around Jatiroto sugar factory in Lumajang East Java in order to increase milling capacity

increasing production capacity of Asembagus sugar factory in Situbondo East Java Benefits:increasing service delivery to farmers in Asembagus surrounding supporting the existence of folk-based cane for sugar industry in Java supporting government program in using renewable energy


Chapter 5


PMN to Support Infrastructure and Connectivity Development

PMN for SOEs is directed to support the infrastructure and connectivity including airport development, land bank provision, housing development, support monorail project and the stations, trans sumatra, java, and trans kalimantan rolling stock train provision, the highways and trans Sumatraconstructions. PMN explanation to support the infrastructure and connectivity program are served on a Graph 5.6.

PT Angkasa Pura II (Persero) was established in 1984. It is one of SOE that engaged in airport services and services that related to airport services in west Indonesia.PT Angkasa Pura II manages 13 airports, namely Soekarno-Hatta airport, Halim Perdanakusuma, Kualanamu, Supadio, Minangkabau, Sultan Mahmud Badaruddin II, Sultan Syarif Kasim II, Husein

No.I

--

II--

---


Benefits:

TABLE 5.15OBJECTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION TOPT

PERKEBUNAN NUSANTARA XII (Persero)

DetailsObjectives:

to develop on farm in PTPN XII cane plantation in order to support cane supply and sugar factory

to invest in Glenmore sugar factory in Banyuwangi East Java

creating job vacancies multiplier effect for the nearby economy

increasing tax revenue from trade or regional retribution increasing sugar production +/- 100.000 per annum producing bio ethanol as part of renewable energy

2.000,0

3.600,0

1 .000,0

3.500,0

1 .400,0

2.000,0

18.356,6

1 .500,0

5.000,0

GRAFIK 5.6GOVERNMENT PERTICIPATION FOR INFRASTRUCTURE AND

CONNECTIVITY PROGRAM(billionrupiah)

PT Angkasa Pura II PT Hutama Karya Perum PerumnasPT Waskita Karya Tbk PT Adhi Karya Tbk PT KAIPT SMI PT PII PT PLN




Sastranegara, Sultan Iskandar Muda, Raja Haji Fisabilillah, Sultan Thaha, Depati Amir, and Silangit. The use and benefit of PMN toPT Angkasa Pura II (Persero) are presented in Table 5.16.

PT Hutama Karya (Persero) is one of the SOE which operates in the construction technology which nationalized in 1961. It has produced the high tech products such as bridge, building, dam, port, and airport.PT Hutama Karya (Persero) has produced the historical and monumental construction includingparliament building, Pancoran sculpture, and Semanggi overpass.The use and benefit of PMN toPT Hutama Karya (Persero) are presented in Table 5.17.

Perum Perumnas is SOE that works in the property sector, residential development, and public housing in Indonesia.One of its duty is to support life quality of Indonesian through the provision of affordable house. Core businessof Perum Perumnas covering 7 field, namely: (1) non-commercial houses selling (with subsidized mortgage interest rate facilities); (2) commercial houses selling (with market mortgage interest rate); (3) non-commercial rent flats construction(rusunawa); (4) commercial rent flats construction; (5) flats construction of non-commercial ownership; (6) flats construction of commercial ownership; and (7) commercial land selling.The use and benefit of PMN toPerum Perumnas are presented in Table 5.18.

No.I

-

II----


increasing airport capacityoptimaliZing airport's capacityincreasing safety and security as well as anticipation for future demand supporting regional economic growth around the airport and increasing connectivity either regionally or internationally

TABLE 5.16OBEJCTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION TO PT

ANGKASA PURA II (Persero)

DetailsObjectives:

land clearing phase I in 2015 in regard of Soekarno-Hatta Airport development

Benefits:

No.I

-

-

II---

-


to strengthen company's capital as for increasing its leverage in order to obtain more capitalization


HUTAMA KARYA (Persero)

DetailsObjectives:

to accelerate the development of Sumatera's toll roads i.e. Medan – Binjai, Pekanbaru – Dumai, Palembang – Indralaya, dan Bakaheuni – Terbanggi Besar

Benefits:increasing mobilization and developing better access in residence area increasing goods mobilization as well as materials to be more efficient increasing land's value added and developing economic activities in industrial, commercial and residecial areas increasing tax revenue


Chapter 5


PT Waskita Karya (Persero) Tbkis one of the largest construction company in Indonesia that established in 1961, and have a long experience to work with government and private projects.Until now the company has done its business activities in the field of construction services, industry, realty, and trade.In addition, the company also has strategic role in the infrastructure projects by developing the centre of energy business and highways.The use and benefit of PMN toPT Waskita Karya (Persero) are presented in Table 5.19.

PT Adhi Karya (Persero) Tbk is SOE working in the construction industry in Indonesia.In addition to working in the construction industry, the company also runs in the consulting management and engineering (engineering, procurement, and construction/EPC) , general trade, services procurement, real estate and agro factory industry, and services in technology information.In their operations, PT Adhi Karya (Persero) Tbk is supported by eight divisions across Indonesia and abroad besides its subsidiary companies. The use and benefit of PMN toPT Adhi Karya (Persero) are presented in Table 5.20.

No.I

---

II----


increasing revenue and profit of the company so that company may sustain to provide affordable housing

TABLE 5.18OBJECTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION TO PERUM

PERUMNAS

DetailsObjectives:

to improve company's capitalizaton structureto increase companys's capacity to improve company's capitalizaton structure

Benefits:reducing backlog of national residentials demand through folk housing forming green residence through integrated residences and city restructuring increasing private contribution as residensial providers in order to obtain better residential quality

No.I

-

-

-

II

A---

B---


providing infrastructure financing, which creating multiplier effect and incresing Indonesia's competitiveness

TABLE 5.19OBJECTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION TO PT WASKITA

DetailsObjectives:

to strengthen company's capital as for increasing its leverage in order to obtain more capitalization eventually will result on company's expenses

to increase companys capacity as leverage in order to win projects in toll roads and transmission to support completion of stategic toll roads and to support of new toll roads development as well as 500 KV transmission in Sumatera

Benefits:

for the Government:increasing government investmentforming new potential of newly developed region passed by company's projects

for the company:increasing company's competitiveness as construction company in domestic and regional marketincreasing company's reputation through on schedule projects completion reducing company's exposure on debt



PT Kereta Api Indonesia (Persero), hereinafter called PT KAI(Persero), is SOE with business activities covering: (1) the train infrastructure covering development activities, the operation, handling, and the operational infrastructure; (2) the train facilities covering the provision, the operation, and handling facilities, the passengers transportation business and/or goods, pre and post business, and unloading; (3) rental business facilities and/or train facilities; (4) services procurement for other railways handling; (5) services business expertise in train sector and services transportation consulting; (6) business agency in goods and passengers transportations; and (7) education and training services in train sector. The use and benefit of PMN to PT KAI (Persero) are presented in Table 5.21.

PT Penjaminan Infrastruktur Indonesia (PT PII) (Persero) was established by Government Regulation No. 35 in 2009 about Capital Participation of the Republic Indonesia to Establish the Company (Persero) in Insurance Infrastucture Field.The initial capital of PT PII (Persero) was Rp9 trillion, while paid up capital in PT PII (Persero) is worth Rp4.5 trillion.

No.I

-

-

-

II-----


to increase infrastructure investment as company's active participation to the nation


PT ADHI KARYA (Persero) Tbk

Details

to increase PT Adhi Karya capitalization through equity right issue and increasing company's leveraging

Objectives:

providing transportation facilities to reduce Jakarta's traffic

to finance Jakarta monorail project which its presidential decree is still on going

Benefits:maintaining government share on SOE increasing state revenue from tax and non tax revenue restructuring company's capitalization as leverage to obtain bigger financial capacity increasing capacity and strengthening its long term investment in infrastructure

No.I

-

IIA

- increasing and revitalizing production capacity - returning company's production capacity to its prime condition based on capacity

design - increasing human resourses and integrate information system design, production, finance, and human resource in order to support company's activity

B- to support government program to increase public service - distribution of national transportation - creating job vacancies- implementing Public Service Obligation (PSO)- increasing tax revenue- increasing national economy


for the government:


PT KERETA API INDONESIA (Persero)

Details

Benefits:for the company

to revitalize and to facilitate rolling stock for TransSumatera, TransJava and TransKalimantan

Objectives:


Chapter 5


PT PII (Persero) is 100 percent owned by the Indonesian government.PT PII (Persero) is SOE under the Ministry of Finance that has a mandate duty to insure infrastructure projects with government private cooperation scheme (KPS). Infrastructure projects that can be secured by PT PII (Persero) are transportation infrastructure, roads, irrigation, drinking water, water waste, telecommunications, electricity, oil and gas.The use and benefit of PMN toPT PII (Persero) are presented in Table 5.22.

PT Sarana Multi Infrastruktur (PT SMI) (Persero)is SOE that founded in 2009 to be a catalyst in order to accelerate infrastructure development.Meanwhile, visions and missions of PT SMI (Persero) is to encourage the acceleration of national infrastructure financing with private partnership and/or multilateral financial institution.

Additional PMN to PT SMI is derived from all investment that has been allocated to government investment center (PIP), including investments that have been distributed to PT PLN (Persero) and others. Furthermore, the government will combine PT SMI and PIP to become a potent financing institution in infrastructure, which has its own regulation, and which is supported by government financing. The use and benefit of PMN toPT SMI (Persero) are presented in Table 5.23.

No.I

-

IIA

- accelerating PPP infrastructure projects - becoming ring-fencing APBN towards potential claim of PPP projects

B- increasing its capacity so that more projects can be guaranteed - increasing market confidence on PPP projects by PT PII (Persero)

C- increasing bankability of infrastructure project using PPP scheme in order to obtain

funding


for the government

for the company:

for the private sector:


PT PENJAMINAN INFRASTRUKTUR INDONESIA (Persero)

Details

increasing company's capacity as a guarantor of PPP infrastructure projects

Benefits:

Objectives:

No.I

--

II- financing strategic infrastructure projects - carry out advisory activities-


preparing projects and supporting PPP infrastructure projects funding


PT SARANA MULTIINFRASTRUKTUR (Persero)

Details

maximizing government investment fund which is managed from APBN

Benefits:

strengthening PT Sarana Multi Infrastruktur to become an anchor in financing infrastructure projects in indonesia

Objectives:



PT Perusahaan Listrik Negara (PT PLN) (Persero)is the largest providerof electricity in Indonesia.According to the Government RegulationNo.30 in 2009 about electricity and based on the Company Basic Budget, a series of activities of PT PLN (Persero) coverelectricity supply business, electricity business supporting, management and the use of natural resources, and other energy sources for electricity supply.The use and benefit of PMN toPT PLN (Persero)are presented in Table 5.24.

PMN to Support Maritime Development Program

PMNto support maritime development program has a purpose to develop ports in east of Indonesia, providing a passenger ship and cargo shipping, repair and improveferry terminal, and construct,improve and maintenance the ships. PMN explanation to support maritime development program are served on a Graph 5.7.

No.I

-

II---


accelerating electricity infrastructure development in peripheral islands and border regions reducing funding gap in financing power plant delevopment and transmission projects improving company's ledger and improving financing for PLN in order to expand electricity infrastructure


PERUSAHAAN LISTRIK NEGARA (Persero)

Details

Benefits:

strenghtening PT PLN capitalization in order to support 35.000 MW funding untill 2019 based on Electricity Provision Working Plan (RUPTL) period 2013-2022

Objectives:

1 .000,0

500,0

350,0

200,0

900,0 200,0

2.000,0

GRAPH 5.7GOVERNMENT PERTICIPATION FO MARITIME DEVELOPMENT

PROGRAM(billion rupiah)

PT ASDP

PT Pelni

PT Djakarta Lloyd

PT Dok dan PerkapalanSurabayaPT Dok dan PerkapalanKodja BahariPT Industri KapalIndonesiaPT Pelindo IV



Chapter 5


PT Pelindo IV (Persero) is SOE that engaged in port services which was established to locomote and drive economic growth in center and east of Indonesia.The use and benefit of PMN toPT Pelindo IV (Persero) are presented in Table 5.25.

PT Pelni (Persero) established on April 28 1952 is one of SOE which works in the sea service providers for passengers transportation and cargo shipping with largest of national network, with the number of port transit around 95 ports.PT Pelni (Persero) has a core business in the cruise which currently operates around 26 passenger ships (21 PSO ship and 5 non PSO ship) and 3 cargo ships (Caraka Jaya Niaga type).The use and benefit of PMN toPT Pelni (Persero) are presented in Table 5.26.

PT Djakarta Lloyd (Persero) is the first commercial company that founded in 1950 which currently majoring its business in synerging with other state companies in the field of cargo shipping, with a container and a bulk, especially coal from PT PLN (Persero) and PT Antam (Persero) and other cargo SOEs. In addition, PT Djakarta Lloyd (Persero) also has the agency business, to be an agent of foreign ships landed at the port of Indonesia, as well as business activities of the terminal, warehouse, expedition,and reparations serviceshandled by 2 subsidiary companies .The use and benefit of PMN toPT Djakarta Lloyd (Persero) are presented in Table 5.27.

No.I

-

II-

----


noncontainer service provision by providing noncontainer loading equipment to shortened dwelling time


PELINDO IV (Persero) Details

Benefits:facilitating capacity improvement to meet up with demand for passenger terminal in Nunukan, Fak-fak, Makassar and service improvement by providing garbarata

facilitating service in container terminals by providing container field procuring container loading equipment so that could accelerate dwelling time in ports continuing unfinished ports development

to develop port infrastructure in East Indonesia in order to lessen price disparity and supporting distribution of goods

Objectives:

No.I

--

II-----


reducing class action due to social jealousy from price disparity especially in East Indonesia

TABLE 5.26OBEJCTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION TO

PT PELNI (Persero)

DetailsObjectives:

to hasten economic growth in Central and East Indonesia to purchase 6 ships which two of them is 700 TEUs containers and the rest is 350 TEUs containers

Benefits:Increasing tax revenue for the governmentsupporting government program to lessening regional disparityreducing price disparty in throughout Indonesia supporting government program of national logistic program/sea toll



PT Angkutan Sungai Danau dan Penyeberangan (PT ASDP) (Persero)is SOE that engaged in the port services sector business, river and lake transportation, sea transportation, and optimization of compan resources.The use and benefit of PMN to PT ASDP (Persero) are presented in Table 5.28.

PT Dok dan Perkapalan Kodja Bahari (PT DKB) (Persero)is SOE which works in ships industry especially in planning, developing, repairing, maintenance of the ship, buoyancy equipment and off shore buildings construction, and supporting services.The core business of the company is ships industry and offshore facilities, that includes: (1) marine engineering and manufacturing, which are development activities of the new ships, maintenance activities and ships repairing, fabrication and supporting maritime equipment repairing; (2) marine services, which is the activities of the maintenance and repairing shipsduring the operation and maintenance and repairing services and offshore facilities.The use and benefit of PMN toPT DKB (Persero) are presented in Table 5.29.

No.I

--

II-

-

--


to purchase one new Handymax ship

TABLE 5.27OBJECTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION

TO PT DJAKARTA LLOYD (Persero)

DetailsObjectives:

to revitalize few broken ships

Benefits:supporting government program of utilizing sea as main transportation for goods and services creating employment vacancies from loading activities and increasing operated ships

reducing transportation expense increasing tax and dividend revenues

No.I

--

II-

-----


to increase operated ships to increase transportation of goods and people and vehicle from Java to Sumatera vice versa


ANGKUTAN SUNGAI DANAU DAN PENYEBERANGAN (Persero)

UraianObjectives:

to build Merak and Bakauheni port area from development their facilities

increasing state revenue on tax and dividend

Benefits:supporting governemnt program to employing sea transportation to increase vehicle, goods and people transportation improving people's economy increasing competitiveness and strenghtening shipbuilding industries in Indonesia creating employment vacancies nationally reducing transportation expenses


Chapter 5


PT Dok dan Perkapalan Surabaya (PT DPS) (Persero) was founded on September 22, 1910,which is a SOE that engaged in the manufacture and ships reparations field which has the businesses: (1) ship buildingwith the building capability of 12.500 DWT; (2) ship repair and docking until8.500 DWT; (3) fabrication and repairing the supporting tools of steel structures; and (4) maintenance and repairingof sailing and running repear.The use and benefit of PMN toPT Dok dan Perkapalan Surabaya (PT DPS) (Persero) are presented in Table 5.30.

PT Industri Kapal Indonesia (PT IKI) (Persero)is SOE that operates in shipbuilding, reparring ships, buoyancy equipment, other product and service related to the ship.In the period of 1996-2014, PT IKI (Persero) hadexperienced in building and repairing various type of ships, like a goods ship, tanker ship, fishing ship, passenger ship, ferry boat, tugs, ship and barge .To support the development and ship reparation, PT IKI (Persero) has produced facilities like graving dock, slipway, skip lifting, buliding berth and tower crane.The use and benefit of PMN toPT Industri Kapal Indonesia (PT IKI) (Persero) are presented in Table 5.31.

No.I

-

-

II-------


adding more docks of 50.000 DWT capacity to maintain and repair ships over 25.000 DWT


PT DOK DAN PERKAPALAN KODJA BAHARI (Persero)

DetailsObjectives:

finishing Batam shipyard by building 70mx240m graving dock gradually so that docking capacity would increase by 6.8 times and could build ships by 80.000 DWT size

incrasing employment oppportunitiesboosting linkage industries

Benefits:increasing production capacity to increase company's revenue increasing production efficiencyincreasing competitiveness in shipbuilding industry in Indonesiasupporting maritime sector utilizationincreasing governemnt investment

No.I

--

II-----


creating employment vacancies


PT DOK DAN PERKAPALAN SURABAYA (Persero)

DetailsObjectives:

increasing production capacity by procuring floating dock capacity 8.500 DWTimproving efficiency through modernize equipment

Benefits:improving production capacity to increase company's revenues improving production efficiencysupporting maritime main access and sea toll nurturing shipbulding industries



PMN to Support Defense and Security Industry Program

PMN to support defense and security industry that are given to SOE are devoted to increase capacity of production, production facilities modernization, anticipate a flourishing market, and improve human resources ability. PMN explanation to support defense and security industry are served on a Graph 5.8.

PT Dirgantara Indonesia (PT DI) (Persero)was established by the Indonesian government to develop strategic industry in the air show, particularly in matters of developing aircraft industry.PT DI (Persero) has a vision to be in the world class aerospace industry based on the highest level technology and to compete in the global market by cost advantage.Mission of PT DI (Persero) is to be in the middle of aerospace industry especially in engineering, designing, manufacturing, production and maintenance for commercial and military and also application

No.I

-

---

II-

--


increasing job vacancies


PT INDUSTRI KAPAL INDONESIA (Persero)

DetailsObjectives:

increasing working capacity from additional main production capacity of airbag 4x6.500 DWT, 8.500 DWT floating dock or increasing capacity of Graving Dock Iadding dockingyard supporting infrastructure and facilities increasing human resource capacitystrengthening company's capitalization

Benefits:boosting economy especially from shipping sector in East Indonesia which needs more docking yard increasing tax revenue from payment of unpaid tax bill and future tax payment

7 00,0

400,0

GRAPH 5.8GOVERNMENT PARTICIPATION FOR DEFENCE AND

SECURITY INDUSTRY PROGRAM(billion rupiah)

PT Pindad PT DISource: Ministry of Finance


Chapter 5


outside an aerospace industry, doing business and commercial, so that it can produce the products and services with cost advantage .The use and benefit of PMN toPT DI (Persero) are presented in Table 5.32.

PT Pindad (Persero) is SOE which producs weapons, ammunition, defence system equipment, and produces other components for transportation, agriculture/plantations, mining and industry sector.The use and benefit of PMN toPT Pindad (Persero) are presented in Table 5.33.

PMN to Support Sovereignty of National Economy

PMN to support sovereignty of national economy that are given to SOE are devoted to support the financing, credit insurance and SMEs/UMKM assistance, restructuring and SOEs revitalization, developing the Mandalika area, and smelter development. PMN explanation to support sovereignty of national economy are served on a Graph 5.9.

No.I

-

--

II Benefits:- incrasing working capability and capacity- supporting infrastructure and maritime development program - supporting aerospace industry


production facilities investment to increse assembly capacity and aircraft maintenance


PT DIRGANTARA INDONESIA (Persero)

DetailsObjectives:

increasing leverage for banking purposes and replacing parts of capital that has been paid by PT PPAsupporting maritime investment to develop aircraft for maritime surveillence purposes

No.I

----

II Benefits:-

---


supporting Minimum Essential Force program


PINDAD (Persero)

DetailsObjectives:

to develop and to revitalize production lines to develop industrial product business to increase product development and processing facilities and learning center human resources development on soft competence

improving production capacity, modernize production facilities, market development and human resources supporting domestic defence and security industry increasing defence and security industries product in international market



PT Permodalan Nasional Madani (PT PNM) (Persero)is SOE that founded to support financial services including credit programs and managerial services for small, medium, and enterprises (UMKMK) development by giving financing and managerial services directly and especially to the one who has not served by banks.Core businesses of PT PNM (Persero) are: (1) direct financing service to of micro and small enterprises (UMK) through capital micro unit (UlaMM) and indirectly funding to UMK through syari’a micro unit (LKM/S); (2) managerial services/capacity development services with a view to improve the performance of UlaMM and LKM/S financing in order to increase their value added; and (3) venture capital financing and investment management.The use and benefit of PMN toPT Permodalan Nasional Madani (PT PNM) (Persero) are presented in Table 5.34.

1 .000,0

1 .000,0

250,0

3.500,0

1 .000,0

GRAPH 5.9GOVERNMENT PARTICIPATION FOR NATIONAL ECONOMIC

INDEPENDECE PROGRAM(billion rupiah)

PT PNM

PT PPA

PT PPI

PT Antam

PT Askrindo &Perum Jamkrindo


No.I

---

II--

-

-

-Sources: Ministry of SOE

Benefits:


PT PERMODALAN NASIONAL MADANI (Persero)

DetailsObjectives:

increasing SME financing capitalization developing capacity in order to increase company's network and services increasing capability to funding program integrated industrial clustering empowerment by teritorial and sectoral approach

increasing services coverage in 34 provinces including in the poorest regions improving financing to agriculture, farm, and fisheries/maritime sectors to support food security

increasing SME competitiveness in manufacturing sectors by integrated empowerment of prime product of cluster industry

reducing interest for micro funding gradually and reducing dependency SME to sharks increasing SME awareness of green industry from trainings and coaching


Chapter 5


PT Perusahaan Pengelola Aset (Persero) was founded in 2004 with business activities that includes state asset management from Badan Penyehatan Perbankan Nasional, company restructuring and/or revitalization, investment activities and company asset management. The use and benefit of PMN toPT Perusahaan Pengelola Aset (Persero) are presented in Table 5.35.

PT Pengembangan Pariwisata Indonesia (Persero) was called PT Pengembangan Pariwisata Bali (Persero) is SOE which doing business in tourism, and resource optimization which was owned by company to produce goods and/or services with high quality and competitiveto gain profit to increase the value of the company by applyingPerseroan Terbatas principles. The use and benefit of PMN to PT Pengembangan Pariwisata Indonesia (Persero) are presented in Table 5.36.

PT Aneka Tambang (PT Antam) (Persero) Tbkwas founded in 1968 with the name of “Perusahaan RNegara (PN) Aneka Tambang” based on a Government regulation No. 22 in 1968 as a merger companyof Badan Pimpinan Umum Perusahaan-perusahaan Tambang Umum Negara, Perusahaan Negara Tambang Bauksit Indonesia, Perusahaan Negara Tambang Emas Tjikotok, Perusahaan Negara Logam Mulia, PT Nikel Indonesia, Proyek Intan, and Bapetamb projects.The use and benefit of PMN toPT Antam (Persero) are presented in Table 5.37.

No.I

---

II---


optimizing SOEs role in national industries from restructuring and revitalizing increasing assets value by giving added value to the owners or stakeholders contributing to economic growth in SOEs surrounding areas


PT PERUSAHAAN PENGELOLA ASET (Persero)

DetailsObjectives

Benefits:

SOE structuring and revitalizingenergy and petrochemical security investment and expansion to increase assets value from BPPN/government owned

No.I

-

II Benefits:-------


absorbing and increasing employment quality


PT PENGEMBANGAN PARIWISATA INDONESIA (Persero)

DetailsObjectives

financing and developing tourism object in Mandalika Lombok (Mandalika Resort)

capital restructuring and increasing capacity Mandalika Developmentdeveloping tourism objectsdeveloping others tourism objectsincreasing state revenue and reservesnurturing tourism linkage industries



PT Askrindo and Perum Jamkrindo are the companies that give an insurance to society’s business (KUR).In order to empower small, medium enterprises and cooperatives (UMKMK), job creation, and poverty reduction, the government issued policy package to increase the real sector role and to empower UMKMK.The policy for developing and empoweringUMKMK includes: (1) an increase in a source of funding, (2) enterpreneurdevelopment, (3) increasing the market for UMKMK products, (4) reform UMKMK regulations.

Financing source improvements are undertaken by giving a credit insurance for UMKMK through KUR program. KUR is a loan provided by banks to UMKMK which is feasible but not bankable.That means the efforts which have a good prospects and have the ability to payback.The targets of UMKMK are the one who work in the productive business sector, such as: agriculture, fishery, industry, forestry, saving and loan services.In November 2007 - November 2014, the number of KUR were distributed reached Rp159,2 trillion to 12.145.201 debtors.The use and benefit of PMN toPT Askrindo (Persero) and Perum Jamkrindoare presented in Table 5.38.

PMN Non Cash which allocated to PT BPUI is not a fresh money, but is derived from debt accounts conversion ofRekening Dana Investasi (RDI)/SLA.PT Bahana Pembinaan Usaha Indonesia (PT BPUI) (Persero)is the holding company of subsidiary companies, that provide finance services throughVenture Capitalists (PT Bahana Artha Ventura), Securities (PT Bahana Securities), Investment Management (PT Bahana TCW Investment Management) and

No.I

--

II----


boosting regional economic growth especially Eastern Indonesia and remote area increasing market share in Asia Pacific maintaining government share increasing tax and non tax revenue significantly


PT ANEKA TAMBANG (Persero)

DetailsObjectives

Benefits

maintaining governement share through right issue disbursing feronikel project fund in East Halmahera which is one of MP3EI project for corridor Papua and Maluku, Anoda Slime project and Grade Alumina Smelter Mempawah

No.I

-

II--


improving accessibility of funding for UMKMKcreating employment vacancies

TABLE 5.38 OBJECTIVES AND BENEFITS OF GOVERNMENT PARTICIPATION TO

PT ASKRINDO (Persero) DAN PERUM JAMKRINDO

DetailsObjectives

increasing company's capacity from disbursing Kredit Usaha Rakyat (KUR) to micro, small, medium and cooperatives (UMKMK) by operating bank

Benefits


Chapter 5


Building Management (PT Graha Niaga Tatautama).The use and benefit of PMN toPT Bahana Pembinaan Usaha Indonesia (PT BPUI) (Persero) are presented in Table 5.39.

B. PMN Allocation to International Financial Organizations/Institutions (LKI)

PMN allocations to LKI in APBNP 2015 are expected to reach Rp250,5 billion, decrease Rp183,0 billion compared to its target in APBN 2015 at Rp433,5 billion.It is caused by declining pmn allocation to IDA.

PMN to IDA, the changes of PMN allocation are caused not only because of the rescheduling PMN payments to IDA from previously paid in 2015 to be paid periodically in 2015-2020, and were also caused by Rupiah to USD exchange rates adjustment that will be used in APBNP 2015.

While PMN to IBRD and IFAD increased as a result of Rupiah to USD exchange rates adjustment that will be used in APBNP 2015.PMN explanation to LKI is served on Table 5.40.

C. Other PMN

The other PMN allocations in APBNP 2015 are expected to reach Rp5.238,3 billion, increased by Rp3.460,0 billion compared to its target in APBN 2015 at Rp1.778,3 billion.The increase comes from the allocation for PMN to BPJS Kesehatan that had not been allocated in APBN 2015.

No.I

-

II Benefits-


capital reformation of PT BPUI (Persero) so that its equity and its subsidiary becoming bankable to support optimalizing financial and operational performance


PT BAHANA PEMBINAAN USAHA INDONESIA (Persero)

DetailsObjectives

conversing instalment principal from Investment Fund Account (RDI)/redistribution of government loan to PT BPUI (Persero)

2014

Nominal %1 The Islamic Corporation for the Development of Private Sector (ICD) 2,2 - - - - 2 216,7 169,4 177,9 8,5 2,5 3 508,1 - - - - 4 44,3 47,6 50,0 2,4 2,5 5 18,8 - - - 6 International Development Association (IDA) - 216,6 22,6 (194,0) (89,8)

790,0 433,5 250,5 (183,0) (42,2)

TABLE 5.40DEVELOPMENT OF GOVERNMENT PARTICIPATION TO ORGANIZATIONS, 2014-2015

(bilion rupiah)

No. Details2015

LKPPUnaudited

APBN APBNP

Asian Development Bank (ADB)

Difference

International Bank for Reconstruction and Development (IBRD)

International Fund for Agricultural and Development (IFAD)International Finance Corporation (IFC)

Total




PMN allocation to BPJS Kesehatan is to sustain social security funds (DJS) Kesehatan because of the imbalance between its premium and its benefitcost.The imbalance is particularly caused by the imbalance of contribution paid by workerparticipants who are not a wage receiver(PBPU) and the cost of the health services provided by BPJS Kesehatan. This PMN will be used to finance BPJS Kesehatan operational as a operational fundthat is charged to DJS Kesehatan at Rp3.460,0 billion.Without the operational fund that is charged to DJS Kesehatan, the robustness of DJS Kesehatan is expected to be maintained. Other PMN explanation in APBNP 2015 is served on Table 5.41.

D. The Allocation of Investment Financing for the Establishment of BLU Manajemen Aset

Public Service organization (BLU) Manajemen Aset was planned as an operator of the goods (as referred to Government Regulation No. 27 in 2014 on The Goods Management of the State Government/Local Government) in optimizing the potential assets to serve the asset management, especially property to the public, government, private and society in general.BLU was established to become a solution for asset managementto be optimal.BLU is expected to use potential assets such as rent, utilizationpartnership, operational partnership, building utilization and government private partnership/KPS, procurement and handover of potential assets in optimizing the state assets. BLU Manajemen Aset also can serve as a land bank to provide assets/infrastructure in order to the public service and implementation of the government function. BLU has a flexibility in financial management and flexibility in the management of assets to provide services by applying healthy business practices.

To support the formation of BLU and duty implementation, the government allocated their budget in investment funding that will be used to utilize and assets up grading assets and to provide the land.The Benefits of the budget are: (1) for BLU, to support the improvements of the assets by granting value added in order to the use of assets, to secure and to increase the assets status into free and clear, and the initial capital to land procurement, (2) for the government, separating regulator function and operators so that can be more effective, efficient, and accountable, increasingPNBP, and supporting the needs of assets in the future.

5.2.1.2.2 Government’s Mandatory Obligations To support infrastructure development acceleration projects, the Government will give guarantee to banking creditors/business entities that used coal, the acceleration of drinking water supply, and government partnership projects with business entities through Badan

2014

Nominal %1 Asean Infrastructure Fund (AIF) 591,4 - - - -

2 1.000,0 1.000,0 1.000,0 - -

3 31,1 - - - -

4 - 778,3 778,3 - -

5 - - 3.460,0 3.460,0 -

1.622,5 1.778,3 5.238,3 3.460,0 194,6

TABEL 5.41PERKEMBANGAN PMN LAINNYA, 2014-2015

(miliar rupiah)

No. Uraian2015

LKPPUnaudited

APBN APBNP

Lembaga Pembiayaan Ekspor Indonesia (LPEI)

International Rubber Consortium Limited (IRCo)

Selisih

Bank Indonesia

Badan Penyelenggara Jaminan Sosial Kesehatan (BPJS Kesehatan)

JUMLAH



Chapter 5


Usaha Penjaminan Infrastruktur. Government’s mandatory obligations in 2010-2015 are served in Graph 5.10. In 2010-2012, there was no budget realization. This was mainly because PT PLN and PDAM as guaranteed parties by the government had not experienced the default condition. In addition, regulations implementation related to the transfer of government’s mandatory obligations to insurance backup fund account have not been completed.

Furthermore, in fiscal year 2013, based on regulation that applied, if PT PLN and PDAM had not experienced default until the third quarter in the same budget year, the total government’s mandatory obligations in APBN/APBNP can be transferred to insurance backup fund account that opened in Bank Indonesia for the next payment of an government’s mandatory obligations in the future. Account balances of insurance backup fund in the end of 2014 is Rp1.670,1 billion, came from budget transfer of government’s mandatory obligations in 2013 and 2014, with the details in Table 5.42.

In APBNP 2015, government’s mandatory obligations change.The changes mainly due to an adjustment of some parameters for government’s mandatory obligations, which are Rupiah exchange rate, insurance exposure, and probability of default matrix as they are served in Table 5.43.

No. Year Amount

1 Carry over of governmnet guarantee fund in APBN/APBNP FiscalYear 2013

706,0

2 Carry over of governmnet guarantee fund in APBN/APBNP FiscalYear 2014

964,1

1.670,1 Source: Ministry of Finance

TABLE 5.42GOVERNMENT FINANCING RESERVE ACCOUNT 2014

(billion rupiah)

Total

-

200,0

400,0

600,0

800,0

1.000,0

APBNP APBNP APBNP LKPP LKPPUnaudited

APBNP

2010 2011 2012 2013 2014 2015

1.000,0 889,0

623,3 611,2

913,7 792,0

50,0 15,0 10,0 35,0 2,2 1,8 0 0 059,8 48,2 49,7

GRAPH 5.10DEVELOPMENT OF MANDATORY GUARANTEE FUND, 2010 - 2015

(billion rupiah)

Development acceleration for coal power plant

Acceleration for drinking water provision

Government partnership project with enterprises through Infrastructure Guarantee Agency




Adjustment of some parameters for government’s mandatory obligations impact on changes in the budget of government’s mandatory obligations in APBNP 2015 as served in Table 5.44.

5.2.1.2.3 The Anticipation Fund of PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya

To pay the people whose have land and building in affected area of Sidoarjo mud, the government allocated anticipation fund to PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya. The funds are prepared by the government as a direct payment to the people who own land and building in affected area of Sidoarjo mud. If the funds are used be, then it will be a loan for PT Lapindo Brantas Inc./PT Minarak Lapindo Jaya.

The anticipation fund can be used in terms of PT Lapindo Brantas Inc./ PT Minarak Lapindo Jaya could not pay the repayment of the land and buildings located in the affected area by the examination report from Board of Financial Supervision and Development (BPKP). Further provisions of the anticipation fund will be regulated in the Presidential Decree. Materials that will be regulated by the Presidential Decree are the criteria of anticipation fund, matters that will be committed between the government and PT Lapindo Brantas Inc./ PT Minarak Lapindo

2 Exposure Penjaminan Exposure Penjaminan

a. FTP 1 : Outstanding debt per Des 2013 a. FTP 1 : Outstanding debt per Sept 2014b. PDAM : Outstanding debt per Des 2013 b. PDAM : Outstanding debt per Sept 2014c. KPS : Nilai Investasi tahun ke-2 c. KPS : Nilai Investasi tahun ke-1

3 Probability of Default Probability of Default

a. PLN : Study Standard & Poor 2012 a. PLN : Study Standard & Poor 2013b. PDAM : Pefindo 2012 b. PDAM : Pefindo 2012


1 Exchange rate assumption Rp11.900 Exchange rate assumption Rp12.500

TABLE 5.43PARAMENTER OF COMPUTATION OF GOVERNMENT GUARANTEE FUND

APBN AND APBNP 2015

No APBN 2015 APBNP 2015

2014

LKPP Unaudited

APBN APBNP Nominal %

1. Development Acceleration of Coal Power Plant 913,7 833,2 792,0 (41,2) (4,9)

2. acceleration of drinking water provision 2,2 1,9 1,8 (0,1) (6,7)

3. Partnership project of Government and SOE through Infrastructure Guarantee Enterprise

48,2 296,5 49,7 (246,8) (83,2)

964,1 1.131,6 843,5 (288,1) (25,5)


Total

TABLE 5.44GUARANTEE FUND BUDGET 2014 AND 2015

NO Details of Guarantee Fund2015 Difference


Chapter 5


Jaya, the type of collateral which will be paid by PT Lapindo Brantas Inc./ PT Minarak Lapindo Jaya to the government, payment mechanism to society who have land and buildings in the affected area, refund anticipation fund mechanisms of PT Lapindo Brantas Inc./ PT Minarak Lapindo Jaya to the government. The redemption payments to society who have land and buildings in the affected area of sidoarjo mud will be implemented by Badan Penanggulangan Lumpus Sidorajo.

5.2.1.2.4 Funding Reserve to Social Security Agency (BPJS Kesehatan) for the Social Security Funds (DJS Kesehatan)

Funding Reserve to BPJS Kesehatan for DJS Kesehatan program in APBNP 2015 is predicted to be used when there is still a negative net asset that can disrupt sustainability social security funds (DJS Kesehatan) program.

5.2.2 Debt FinancingIn APBNP 2015, debt financing is estimated at Rp254.856,0 billion, which comes from government bonds (net) by Rp277.049,8 billion, foreign loan (net) by negative Rp23.815,0 billion, and domestic loans (net) by Rp1.621,2 billion. Debt financing in APBNP 2015 is planned to be increased by Rp24.524,9 billion or 9,6 percent to become Rp279.380,9 billion.The increase is especially to increase the PMN to SOEs policy in order to support NAWA CITA priorities. In addition, the increase of debt financing will be used to accommodate the change of basic assumptios of macro economics, the drawing and payments, the current financial markets condition, and other policies that will be taken. Additional debt financing will be mainly funded by government bonds (net) issuance. Overall, debt financing in APBNP 2015 is estimated as following: (1) government bonds (net) Rp297.698,4 billion; (2) loans (net) negative Rp20.008,1 billion; and (3) domestic loans (net) Rp1.690,6 billion. Details on debt financing will be presented in Table 5.45.

2014

Nominal %

I. SBN (Neto) 264.628,9 277.049,8 297.698,4 20.648,6 7,5

II. Foreing Loan (Neto) (16.211,3) (23.815,0) (20.008,1) 3.806,9 (16,0)

1 . Foreign Loan Drawing (Bruto) 47 .982,0 47 .037 ,1 48.647 ,0 1 .609,9 3,4

a. Loan Program 1 7 .7 7 7 ,0 7 .1 40,0 7 .500,0 360,0 5,0

b. Project Loan 30.205,0 39.897 ,1 41 .1 47 ,0 1 .249,9 3,1

Central Gov ernment Project Loan 28.37 7 ,8 35.57 7 ,7 36.67 5,1 1 .097 ,3 3,1

- Subsidiary Loan Rev enue(SLA) 1 .827 ,2 4.31 9,4 4.47 1 ,9 1 52,6 3,5

2. Subsidiary Loan (SLA) (1 .827 ,2) (4.31 9,4) (4.47 1 ,9) (1 52,6) 3,5

3. Principal Pay ment of Foreign Loan (62.366,1 ) (66.532,8) (64.1 83,2) 2.349,6 (3 ,5)

III.Domestic Loan (Neto) 939,6 1.621,2 1.690,6 69,4 4,3

1 . Domestic Loan Drawing (Bruto) 1 .080,9 2.000,0 2.000,0 - -

2. Principal Pay ment of Domestic Loan (1 41 ,3) (37 8,8) (309,4) 69,4 (1 8,3)

249.357,3 254.856,0 279.380,9 24.524,9 9,6


Total

TABLE 5.45LOAN FINANCING 2014 AND 2015

(billion rupiah)

Loan Financing Types

2015

LKPP Unaudited

APBN APBNPDifference



According to the agreement between the government and the parliament in APBNP 2015, debt financing policies in APBNP 2015 are: (1) controlling the debt ratio; (2) prioritising debt financing from domestic to optimize the role of the community ( financial inclusion ) and deepening government bonds domestic market; (3) directing the use of debt to productive activities include sukuk issuance project; (4) use foreign loans selectively, especially for the infrastructure and energy; (5) use emergency loans as an alternative fund in the financial markets to support the issuance of government bonds when deficit increases; and (6) implement debt management actively within the framework of asset liabilities management (ALM)

5.2.2.1 Government Bond (SBN Net)Issuance of government bond (net) in APBNP 2015 is expected to reach Rp297.698,4 billion or 7,5 percent. This increase is caused mainly by the additional PMN to a number of SOEs. Although the issuance of government bond (net) increases , the government tries to fulfill the need by applying the prudential principle whether a variety of factors, including costs and credit risk, financial markets developments, capacity absorptiveness of the government bonds , and needs of the treasury. The issuance of government bonds in the last five years is served on Graph 5.11.

5.2.2.2 Foreign Loans NetLoan drawing in APBNP 2015 is estimated at negative Rp20.008,1 billion or increased by Rp3.806,9 billion compare to its drawing in APBN 2015. Changes in foreign loans (net) are affected by the drawing of project loans, adjustment of instalments plan on foreign loan, and depreciation of the Rupiah exchange rate to USD.

Program loans drawing in APBNP 2015 in currency as planned are USD600,0 million. However, when it is converted into Rupiah, the value will be Rp360,0 billion or 5,0 percent compared with its target in APBN 2015. Program loans are increasing because of Rupiah depreciation. In 2015, this loan commitment is obtained from World Bank and Asian Development Bank. Program loans drawing in 2010-2015 are presented in Graph 5.12.

91 ,11 19,9

1 59,7

224,7

264,6 277,0297,7

0,0

50,0

100,0

150,0

200,0

250,0

300,0

350,0

2010 2011 2012 2013 2014LKPP

Unaudited

2015APBN

2015APBNP

GRAPH 5.11ISSUANCE OF SBN (NETO), 2010-2015

(billion rupiah)



Chapter 5


The drawing of project loan government in 2015 was estimated at Rp41.147,0 billion, changed by Rp1.249,9 billion (3,1 percent) compared with its target in APBN 2015. The changes of project loan drawing plan have related to the adjustment of central government project loan drawing (implemented by K/L and granted to the local government), and an increase in subsidiaries project loan (subsidiaries loan agreement/SLA) to local governments and/or SOEs. An increase in project loan implemented by K/Lc was caused by the presence of the schedule adjustment for implementing the projects that are funded by loans, the implementation of the pipeline loan which is expected to be signed and implemented in 2015, the expansion of the project scope, the allocation of loans that had not been absorbed in 2014, and extended closing date for some loans so that it has to be allocated in 2015. Some of K/L which have an increasing loans drawing are Police of the Republic of Indonesia; Ministry of Education and Cultural; Ministry of the Village, Underdeveloped Regions and Transmigration; Ministry of Public Works and Housing; Ministry of Health; and Institute of Knowledge of Indonesia (LIPI).

Loan drawing plan that granted to the local government is expected to increase, especially for Water Resources and Irrigation Sector Management Program II (WISMP-2), while loan drawing plan for the Jakarta Mass Rapid Transit project (MRT) do not echange.

Loan drawing plan adjustment was also made for the subsidiariy loans, especially on the project by PT Perusahaan Listrik Negara (Persero) and PT Pertamina.The adjustments are caused by depreciationof Rupiah exchange rate to USD. The growth of loan project drawing in 2010-2015 is presented in Graph 5.13.

The drawing of foreign loans was based on some policies management which are: (1) project loan committments are intended to fund government productive expenditure in order to increase the potential of an output that can add higher multiplier effect in the future; (2) improve the quality of preparing activities and foreign loan procurement through role improvement and in preparation of cooperation with lender; (3) foreign cash loan to fund the state budget deficit selectively considering lender capacity and the preparation of foreign cash loan complexity; and (4) improve the performance of loans through monitoring and evaluation loans optimization, handling the problems which have any significant impact on APBN.

3.209,0

1 .511,0 1 .566,2 1 .552,0 1 .475,0

600,0 600,0

-

500,0

1 .000,0

1 .500,0

2.000,0

2.500,0

3 .000,0

3 .500,0

201 0 2011 201 2 201 3 201 4 LKPP

Unaudited

201 5APBN

201 5APBNP

GRAPH 5.12PROGRAM LOAN, 2010‒2015

Jerman Perancis

Jepang ADB

World Bank Pinjaman Program

(million USD)




In addition to the loans drawing, the government was also making the instalments payment of principle foreign loans. The growth of Rupiah exchange rate against some foreign currencies especially JPY and USD in 2015 cause the adjustment of principle foreign loan allocation in APBNP 2015. From currency side, instalments of principle foreign loan allocation in 2015 will be paid especially in JPY, USD, and EUR. In terms of largest creditor, instalments of principle foreign loan which due in 2015 would be paid to Japan, ADB, World Bank, Germany, and France.

5.2.2.3 Domestic Loans NetLoan based financing from domestic loan net will be made with gross drawing to domestic loans and principal payment of domestic loans. For 2015, the Government plans to make domestic loans from banking SOEs/Regional SOEs at Rp2.000,0 billion. Policy for the spending of these domestic loans will remain focused on domestic industry empowerment and for projects of the Ministry of Defence and National Police (POLRI).

The drawing of domestic loan will be made as follows: (1) optimizing domestic loan spending by considering technology priority and domestic industry capacity, and domestic financing sources capacity; (2) enhancing the quality of project preparation and domestic loan procurement selectively and to ensure the feasible criteria; and (3) improving performance of domestic loan spending through monitoring and evaluation optimization, and take proactive steps in handling slow disbursement.

The government also will be doing instalments payment of principle loans by negative Rp309,4 billion or 18,3 percent because there are adjustment of instalments on the drawing some loans calculation last year. Thus, the drawing of domestic loans net in the APBNP 2015 is up to 4,3 percent compared to its target in APBN 2015. Domestic loans growth for the past five years are served on Graph 5.14.

1 7 .034

1 4.250 1 2.629

31 .7 37

28.37 8

32.881 33.91 5

8.7 86

4.224 3.7 53 3.881 1 .827

4.31 9 4.47 2

- 7 1 8 1 .235 47 9 2.696 2.7 60

0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

2010 2011 2012 2013 2014LKPP

Unaudited

APBN 2015 APBNP 2015

GRAPH 5.13PROJECT LOAN, 2010 - 2015

(billion rupiah)

Line Ministries Loan Subsidiary loan Subsidiary grant

Sou rce: Ministry of FInance


Chapter 5


5.2.2.4 Loan Based Financing with Standby LoansTo anticipate the impacts of global economic crisis to fiscal conditions, the Government with other development partners of multilateral institutes (World Bank and ADB) and bilateral institutes (Australia and Japan) have prepared standby loan facility of USD5,0 billion from 2012 to 2014. This facility is as financing backup especially when the Government gets difficulties in accessing domestic financing sources, i.e. SBN issuance and budget deficit realization exceeds the target set in State Budget (APBN). Until now, the Government not yet uses this facility. Standby loan commitments in 2015 will be presented in Table 5.46.

3 94 6 19

9 13 6 16

1 .081

2 .000 2 .000

(113) (141) (141) (379) (309)

3 94 6 19

8 00

47 4

9 40

1 .621 1 .691

(500)

0

500

1 .000

1 .500

2.000

2.500

201 0 2011 201 2 201 3 201 4 LKPP

Unaudited

201 5 APBN

201 5 APBNP

GRAPH 5.14DOMESTIC LOAN 2010‒2015

Drawing (Bruto) Principal Payment Domestic Loan (Neto)

(billion Rp)


(billion USD)

(billion Rp)(billion

USD)(billion Rp)

1 . 2,0 23 .800,0 2,0 25.000,0 Program for Economic Resilience, Investment and Social Assistance in Indonesia (PERISAI)

2. Asian Dev elopment Bank 0,5 5.950,0 0,5 6.250,0 Program Precationary Financing Facility dan /atau Countercyclical Support Facility

3. - - 1 ,5 1 8.7 50,0 Program JBIC Contingent Loan Facility

4. - - 1 ,0 1 2 .500,0 Supporting Program World Bank, ADB and Government of Japan/JBIC Contingent Loan Facility

2,5 29.750,0 5,0 62.500,0

Note: Ex ch a n g e r a te a ssu m ption Rp1 1 ,9 00/USD for A PBN a n d Rp1 2 ,5 00.0/USD for A PBNP.Sou r ce: Min istr y of Fin a n ce

World Bank

Japan Gov ernment (Japan Bank International Corporation/JBIC)Australian Gov ernment

Total

TABLE 5.46STANDBY LOAN COMMITMENT 2015

No. Creditor ProgramAPBN APBNP

Commitment



5.3 Medium Term Budget Deficit and FinancingIn Draft Medium Term State Budget (RAPBN) (2016 – 2018) budget deficit is expected to decline and primary balance turns to positive trend. Accordingly budget financing in such period will also drop. This lower budget financing will be however correlated with fiscal resilience and sustainability and of maintaining the downward debt to GDP ratio trend.

Budget financing trend and projection in 2010 – 2018 is presented in Graph 5.15.

Regarding the effort to reduce debt ratio to GDP, Graph 5.16 presents the growth and projection of the government debt-to-GDP ratio in 2010- 2018.

To meet budget financing requirements as envisaged in Draft Medium Term State Budget (RAPBN) the Government will use loan and non-loan sources. Associated with the management of budget financing, policies that will be taken are: (1) using budget surplus (SAL) as a financing

0

1

2

3

0

50

100

150

200

250

300

2010 2011 2012 2013 2014 2015APBNP

2016Projection

2017Projection

2018Projection

GRAPH 5.15DEVELOPMENT AND PROJECTION OF DEFICIT AND BUDGET FINANCING , 2010-2018

Budget Financing % Deficit to GDP (RHS)

(%)


(t rillion Rp)

15

17

19

21

23

25

27

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

2010 2011 2012 2013 2014 2015APBNP

2016Projection

2017Projection

2018Projection

GRAPH 5.16DEBT TO GDP RATIO, 2010-2018

Outstanding Debt PDB*) Debt to GDP ratio (RHS)

Note: *) using Nominal GDP of 2010 seriesSource: Ministry of Finance

(trillion Rp) (%)


Chapter 5


source and fiscal buffer to anticipate potential crisis; (2) optimizing the planning and the use of loans for productive activities including Sukuk issuance; (3) managing state bonds through state bonds domestic market development and development of the issuance of foreign currency state bonds to be more flexible; (4) integrated risk management; (5) the merger of investment insurance institutions to fund high risk projects; (6) active debt management within ALM framework.

Meanwhile, strategy of debt financing will be still in line with policy which was set out in the strategy of the medium-term debt management, which includes: (1) optimizing potential debt financing from domestic sources and utilizing foreign loan as a complement; (2) expanding the instruments and expanding the basis of debt investors so there will be a flexibility in choosing a source of loan that are better suited to the needs with minimal cost and restrained risk; (3) using flexibility debt financing with optimal costs and risks; (4) maximizing the use of loans for capital spending especially infrastructure development; (5) active debt management within ALM framework.; and (6) improving the transparency and accountability.

With regard to budget financing from on-loan sources in Draft State Budget for medium term, the Government will take the following policies: (1) using budget surplus (SAL) as a financing source and fiscal buffer to anticipate potential crisis; (2) allocating Capital Participation (PMN) in SOEs, revolving fund and mandatory guarantee to accelerate infrastructure development and to expand the business capacity of SOEs; (3) support Cooperatives and Micro Small Medium Enterprises empowerment with PMN allocation and revolving fund; (4) expand business capacity of SOEs with PMN allocation; (5) support the compliance of Indonesia as member of International Financial Organizations (LKI) and other legal entities and maintain the percentage of capital portions with PMN allocation; (6) support the provision of low-cost houses for low-income households with allocation for revolving fund; (7) continue the allocation of national education development fund (DPPN); and (8) optimize revenue from subsidiary loan repayments.

5.4 Fiscal Risk 5.4.1 Basic Assumptions of Macro Economics Risk in APBNP

2015 Basic assumptions of macro economics in APBNP 2015 come from the deviation between assumptions set and their realization.The Deviation of the assumption will impact on the realization of the budget, for instance on government revenue, government expenditure, budget financing, and the difference between deficit target with their realization.If the realization of deficit is exceeding the target set in APBNP 2015, then the financing sources have to be anticipated. Table 5.47 presents the deviation between the basic assumptions of macroeconomic with their realization from 2010 to 2014.

The impact of deviation from the basic assumption of macroeconomic in APBNP 2015 can be transmitted in the form of sensitivity analysis. There is a change in sensitivity of APBNP 2015 compares to its target in APBN 2015. This was particularly caused by changes in the basic assumption of macro economics, posture of APBNP 2015, and the implementation of the new government policy. The new government policy on the fuel subsidy scheme in 2015 is from the fixed selling price into fixed subsidy per liter particularly for diesel fuel, and without subsidy for gasoline (Premium). The policy changes affect the fuel subsidy, especially the changes in crude oil price and Rupiah exchange rate, so that our budget is more stable. The Influence of macro economics to 2015’s budget can be described in sensitivity analysis as follows.



Increasing growth of economy will have a positive impact on APBNP posture 2015. It will give a direct impacts to the tax revenue and give an indirect impact to the budget of Transfer to Regions especially DBH. Transfer to region budget has impacted government expenditure and it will be needed an aditional adjustment on education expenditure.Tax revenue increases higher than government expenditure, so in total of increasing economic growth would have a positive impact on posture of APBNP 2015, which is the addition of budget surplus.

In line with this, rising inflation rate, oil and natural gas lifting, crude oil prices, and depreciation of Rupiah exchange rate will also give a positive impact on posture APBNP in 2015. Rising inflation rate affects APBNP 2015 through a nominal GDP. On the other hand, the depreciation of Rupiah exchange rate against USD has an impact on all sides of APBNP 2015, either government revenue, government expenditure, and budget financing especially in the budget that use USD as a component of the calculation. Next, the rise in oil and gas lifting will affect APBNP 2015 from the sale of Indonesia crude oil, especially from PPh oil and natural gas, PNBP of oil and natural gas, and DBH oil and natural gas.Crude oil price affects APBNP 2015 especially on oil and natural gas revenue, energy subsidy, and DBH oil and natural gas. Overall, government revenue from the rise of inflation rate, oil and natural gas lifting, crude oil prices, and depreciation of Rupiah exchange rate are higher than government expenditure, so this could increase the budget surplus.

Furthermore, the rising of SPN 3 months interest rate has a negative impact on the APBNP 2015 posture. This will have an impact on government expenditure, especially loan interest payments, so the rising of SPN 3 months interest rate will add budget deficit.

The sensitivity of APBNP 2015 is especially used to perform rapid calculations of APBNP posture. Rapid calculations are expected to absorb the impact of the change of the basic assumptions of macro economics to provide a view on the budget deficit in APBNP 2015. Nevertheless, posture could not be based on the results of the sensitivity calculations, because it is not only affected by the basic assumptions of macroeconomic, but also to accomodate some policies. The potential impact of basic assumptions of macroeconomic on APBNP posture in 2015 will be presented in Table 5.48 and Graph 5.17.

2010 2011 2012 2013 2014**

Economic Growth (%) 0,4 0,0 0,2 (0,5) (0,5)

Inflation (%) 1,7 (1 ,9) 2,7 1 ,2 0,9

Interest Rate of SPN 3 months (%) 0,1 (0,8) 1 ,8 (0,5) (0,2)

Exchange Rate (Rp/USD) (113,0) 7 9,0 (384,0) 860,0 27 8,0

Oil Price (USD/barel) (0,6) 16,5 (7 ,7 ) (2,0) (8,0)

Oil Lifting (million barrel/day ) (0,0) (0,0) (0,1) (0,0) (0,0)

Natural Gas Lifting (million barrel/day ) - - - (0,0) 0,0

Notes:*

**

Details

Positive number means realization surpass its assumption. For exchange rate, positive number means depreciation.

Deviation of LKPP unaudited with its assumptions in APBNP 2014


T ABLE 5.47 DEVIAT ION BET WEEN MACROECONOMIC ASSUMPT IONS

AND REALIZAT ION, 2010-2014*


Chapter 5


The economic growth increases by 0,1 percent would have an impact on the government revenues for Rp1,1 trillion-Rp1,3 trillion and on the government expenditure for Rp0,0 trillion-Rp0,1 trillion. Because of the government revenues rises higher than the government expenditure, so there is a surplus of budget financing for Rp1,0 trillion-Rp1,2 trillion. On the contrary, if the the economic growth decreases by 0,1 percent, then there will be an additional deficit of Rp1,0 trillion-Rp1,2 trillion and it needs a source of funding. In line with this, other basic assumptions of macro economics would have an impact on APBNP posture in 2015 as shown on Graph 5.17.

A. State Revenue 1,1 - 1,3 8,0 - 8,6 - 3,7 - 4,1 3,8 - 4,0 2,3 - 2,3 a. Tax Revenue 1 ,1 - 1 ,3 8,0 - 8,6 - 2 ,0 - 2,3 0,8 - 0,8 0,4 - 0,4 b. Non Tax Revenue - - 1 ,8 - 1 ,8 3,1 - 3,2 1 ,9 - 1 ,9

b. Governm ent Expenditure 0,0 - 0,1 0,2 - 0,2 1,2 - 1,4 1,5 - 1,7 2,4 - 2,8 0,3 - 0,7 a. Central Government 0,0 - 0,0 0,0 - 0,0 1 ,2 - 1 ,4 1 ,1 - 1 ,1 1 ,8 - 1 ,9 0,1 - 0,2 b.Transfer to Region and Rural Fund0,0 - 0,0 0,1 - 0,2 - - 0,4 - 0,6 0,6 - 0,9 0,3 - 0,5

C. Surplus/(Deficit) Budget 1,0 - 1,2 7,8 - 8,4 (1,4) - (1,2) 2,2 - 2,7 1,2 - 1,4 1,6 - 1,9

Financing (0,5) - (0,3)

Excess/(Shortage) Financing 1,0 - 1,2 7 ,8 - 8,4 (1,4) - (1,2) 1,7 - 2,5 1,2 - 1,4 1,6 - 1,9 Source: Ministry of Finance

+10.000 ba rel/h a ri

TABLE 5.48POTENTIAL EFFECT OF MACROECONOMIC ASSUMPTIONS DEVIATION TO APBNP 2015

(trillion rupiah)

DET AILS

Econ om ic Growt h ↑

In fla t ion ↑ SPN ↑ Exch a n ge Ra t e ↑ ICP ↑ Lifting ↑

+0,1% +1% +1% +Rp100/USD +USD1/ba rel

1 ,1

8,0

3,7 3,8

2,3

1 ,3

8,6

4,1

-0,2

1,2 1,5

2,4

0,3 0,1 0,2

1 ,4 1 ,7

2,8

0,7

-0,5-0,3

1 ,0

7 ,8

(1 ,4)

1 ,2 1 ,6

1 ,2

8,4

(1 ,2)

2,5

1 ,4

1 ,9

(2,0)

-

2,0

4,0

6,0

8,0

10,0

Economic Growth↑+0,1% Inflation ↑+1% SPN ↑ +1% Exchange Rate ↑ +Rp100/USD ICP ↑+USD1/barel Lifting ↑ +10.000barel/hari

GRAPH 5.17SENSITIVITY APBNP 2015 TO DEVIATION OF MACROECONOMIC ASSUMPTIONS

(trillion)

Government Revenue Government Expenditures Financing Surplus/Deficit


4,0

2,3



5.4.2 Medium Term Risk of Basic Assumptions of Macro Economics

Medium term posture of APBNP is developed based on developments and prospects of national and global economic performance, especially the prospect of basic assumptions of macro economics. When the basic assumptions of macro economics have changed, thus the government revenue, the government expenditurte, and the budget financing in medium term posture will also change. Table 5.49 to shows an impact of basic assumptions of macroeconomic in medium term of 2016-2018.

A. State Revenue 1,2 - 1,7 11,6 - 11,9 5,1 - 5,4 4,0 - 4,0 2,3 - 2,3a. Tax Revenue 1 ,2 - 1 ,7 1 1 ,6 - 1 1 ,9 2,5 - 2,8 0,8 - 0,8 0,4 - 0,4b. Non Tax Revenue 2,6 - 2,6 3,2 - 3,2 1 ,9 - 1 ,9

B. Governm ent Expenditure 0,2 - 0,5 3,4 - 4,2 1,36 - 1,39 2,3 - 2,7 2,8 - 3,0 0,5 - 0,6a. Central Government 0,0 - 0,1 0,8 - 0,8 1 ,36 - 1 ,39 1 ,3 - 1 ,52 1 ,9 - 2 ,1 0,1 - 0,2 b.Transfer to Region and Rural Fund 0,1 - 0,4 2,5 - 3,4 - 1 ,0 - 1 ,2 0,8 - 0,9 0,4 - 0,5


D. Financing 0,0 (0,5) - (0,3)

1,06 - 1,14 7,7 - 8,2 (1,39) - (1,36) 2,1 - 2,8 1,0 - 1,2 1,7 - 1,8

A. State Revenue 1,4 - 1,9 13,5 - 14,0 5,4 - 5,7 3,9 - 4,0 2,3 - 2,3a. Tax Revenue 1 ,4 - 1 ,9 1 3,5 - 1 4,0 2,8 - 3,1 0,8 - 0,8 0,4 - 0,4b. Non Tax Revenue 2,6 - 2,6 3,2 - 3,2 1 ,9 - 1 ,9

B. Governm ent Expenditure 0,2 - 0,6 3,9 - 5,0 1,4 - 1,5 2,3 - 2,9 2,8 - 3,0 0,5 - 0,6a. Central Government 0,0 - 0,1 1 ,0 - 1 ,0 1 ,4 - 1 ,5 1 ,3 - 1 ,6 1 ,9 - 2,1 0,1 - 0,2b.Transfer to Region and Rural Fund 0,1 - 0,5 2,9 - 4,0 1 ,0 - 1 ,3 0,8 - 0,9 0,4 - 0,5


D. Financing (0,4) - (0,3)

1,2 - 1,3 9,0 - 9,6 (1,5) - (1,4) 2,1 - 3,2 1,0 - 1,2 1,7 - 1,8

A. State Revenue 1,6 - 2,2 16,4 - 17,9 5,7 - 6,1 3,9 - 4,0 2,3 - 2,3a. Tax Revenue 1 ,6 - 2,2 1 6,4 - 1 7 ,9 3,1 - 3,5 0,8 - 0,8 0,4 - 0,4b. Non Tax Revenue 2,6 - 2,6 3,2 - 3,2 1 ,9 - 1 ,9

B. Governm ent Expenditure 0,2 - 0,7 5,1 - 6,0 1,4 - 1,8 2,4 - 3,0 2,8 - 3,0 0,5 - 0,7a. Central Government 0,1 - 0,1 1 ,2 - 1 ,3 1 ,4 - 1 ,8 1 ,3 - 1 ,6 1 ,9 - 2,1 0,1 - 0,2b.Transfer to Region and Rural Fund 0,2 - 0,6 3,9 - 4,7 1 ,0 - 1 ,4 0,8 - 0,9 0,4 - 0,5


D. Financing (0,4) - (0,3)

1,4 - 1,5 10,6 - 12,7 (1,8) - (1,4) 2,2 - 3,4 1,0 - 1,2 1,7 - 1,8

Sou rce: Min ist ry of Fin a n ce

+0,1% +1% +1% +Rp100/USD +USD1/barel

ICP ↑

POTENTIAL EFFECT OF MACROECONOMIC ASSUMPTIONS DEVITAION TO MEDIUM TERM BUDGET

Lifting ↑

+10.000 barel/hari

Econ om ic Growt h ↑

In fla t ion ↑ SPN ↑ Exch a n ge Ra t e ↑ Lifting ↑

TABLE 5.49

(trillion rupiah)

2016

2018 Econ om ic Growt h ↑

In fla t ion ↑ SPN ↑ Exch a n ge Ra t e ↑ ICP ↑ Lifting ↑

+10.000 barel/hari

+0,1% +1% +1% +Rp100/USD +USD1/barel

2017 Econ om ic Growt h ↑

In fla t ion ↑ SPN ↑ Exch a n ge Ra t e ↑ ICP ↑

+10.000 barel/hari

+0,1% +1% +1% +Rp100/USD +USD1/barel

Excess/(Shortage) Financing



Details

Details

Details


Chapter 5


5.4.3 Risk Mitigation of Basic Assumptions of Macro Economics

To mitigate the risk of additional deficit deviation from deviation of basic assumptions of macro economics, the government allocates a backup fund. This serves as a cushion to reduce the potential of budget deficit. The backup fund was calculated by considering the probability/possibility of deviation of the basic assumptions of macro economics, deviation measurement, and the impact of the change on APBNP posture in 2015.

Annex I:Law Number 3 of 2015

Concerning Amendment of The Law of The

Indonesian Budget For Fiscal Year 2015

LAW OF THE REPUBLIC OF INDONESIA

NUMBER 3 OF 2015

CONCERNING

AMENDMENT OF THE LAW NUMBER 27 OF 2014 CONCERNING THE

INDONESIAN BUDGET FOR FISCAL YEAR 2015

BY THE MERCY OF GOD THE ALMIGHTY

THE PRESIDENT OF THE REPUBLIC OF INDONESIA,

Considering : a. whereas the 2015 Indonesian Budget prepared in

accordance with the need for the government

administration and the ability to collect

government revenues in order to support the

realization of national economics based on

economic democracy with the principles of

togetherness, efficiency, justice, sustainability,

environmental friendliness, independence, and by

maintaining the balance of advancement and unity

of the national economics;

b. whereas after Law Number 27/2014 concerning

The Indonesian Budget for Fiscal Year 2015 has

been stipulated there are some changes in

macroeconomics assumptions accompanied by

changing in fiscal policies and shifting on

interorganization unit and/or on interorganization

programs which has significant impact to 2015

Indonesian Budget;

c. whereas to protect 2015 budget execution, it is

needed an adjustment regarding revenues,

expenditures, deficit as well as financing in order

to become more realistic and supportive to meet

2015 development objectives and medium term

objectives;

d. whereas based on the premises as referred to in

letters a, b, and c, and implementing the

provisions of Article 23 paragraph (1) of the 1945

Constitution of the Republic of Indonesia, it is

necessary to stipulate an amendment of Law

27/2017 on the Indonesian Budget of the Fiscal

Year 2015;

Bearing in mind : 1. Article 5 paragraph (1), Article 20 paragraph

(2) and paragraph (4), Article 23 paragraph

(1) and paragraph (2), Article 31 paragraph

(4), and Article 33 paragraph (1), paragraph

(2), paragraph (3), and paragraph (4) of the

1945 Constitution of the Republic of

Indonesia;

2. Law Number 17/2003 concerning

Government Finance (State Gazette of the

Republic of Indonesia Number 47/2003,

Supplement to State Gazette of the Republic

of Indonesia Number 4286);

3. Law Number 17/2014 concerning People’s

Consultative Assembly, the House of

Representatives, Council of Regional

Representatives, and Regional Legislative

Assembly (State Gazette of the Republic of

Indonesia Number 182/2014, Supplement

to State Gazette of the Republic of Indonesia

Number 5568) which has been revised by

Law Number 42/2014 concerning

Amendment of Law Number 17/2014

concerning People’s Consultative Assembly,

the House of Representatives, Council of

Regional Representatives, and Regional

Legislative Assembly (State Gazette of the

Republic of Indonesia Number 383/2014,

Supplement to State Gazette of the Republic

of Indonesia Number 5650);

4. Law Number 27/2014 concerning The Indonesian

Budget for Fiscal Year 2015 (State Gazette of

the Republic of Indonesia Number

259/2014, Supplement to State Gazette of

the Republic of Indonesia Number 5593);

With the Joint Agreement between

THE HOUSE OF REPRESENTATIVES OF THE REPUBLIC OF INDONESIA

and

THE PRESIDENT OF THE REPUBLIC OF INDONESIA

HAS DECIDED:

To stipulate: LAW ON AMENDMENT OF LAW 27/2014 CONCERNING THE

INDONESIAN BUDGET OF FISCAL YEAR 2015.

Article I

Some provisions on Law Number 27/2014 concerning The

Indonesian Budget for Fiscal Year 2015 (State Gazette of

the Republic of Indonesia Number 259/2014,

Supplement to State Gazette of the Republic of

Indonesia Number 5593) has been changed as

follows:

1. Provision on Article 3 has been changed as follows:

Article 3

Indonesian budget fiscal year 2015 is planned to be

Rp1.761.642.817.235.000,00 (one quadrillion seven

hundred sixty one trillion six hundred fourty two

billion eight hundred seventeen million two

hundred thirty five thousand rupiah), consists of:

a. Tax revenue;

b. Non tax revenue; and

c. Grants

2. Provision in Article 4 is changed as follows:

Article 4

(1) Tax Revenues as referred to in Article 3 point a shall be

planned to be in the amount

Rp1.489.255.488.129.000,00 (one quadrillion

four hundred eighty nine trillion two hundred

fifty five billion four hundred eighty eight

million one hundred twenty nine thousand

rupiah), consists of:

a. Domestic Tax Revenue; and

b. International Trade Tax Revenue.

(2) Domestic Tax Revenue as referred to in paragraph (1)

letter a shall be planned to be in the amount of


four hundred thirty nine trillion nine hundred

ninety eight billion five hundred ninety eight

million two hundred thirty nine thousand

rupiah), consists of:

a. income tax revenue;

b. revenue from goods and service value added

tax and tax on sale of luxurious items;

c. land and building tax revenue;

d. excise revenue; and

e. other tax revenues.

(3) Income Tax Revenue as referred to in paragraph (2)

letter a shall be planned in the amount of

Rp679.370.136.164.000,00 (six hundred

seventy nine trillion three hundred seventy

billion one hundred thirty six million one

hundred sixty four thousand rupiah) including

income tax paid by the Government (PPh DTP) for:

a. geothermal commodity in the amount of

Rp2.190.000.000.000,00 (two trillion one

hundred ninety billion rupiah) including PPh

DTP shortfall in period 2012-2014 in the

amount of Rp1.068.970.000.000,00 (one

trillion sixty eight billion nine hundred

seventy million rupiah) the implementation of

which shall be provided in a Regulation of Minister

of Finance; and

b. interest, counter proceeds, and third party’s income

for the services given to the Government in the

issuance and/or repurchase/exchange of SBN in

international market, but excluding the service of

local legal consult, in the amount of

Rp5.990.000.000.000,00 (five trillion nine

hundred ninety billion rupiah) including PPh

DTP shortfall in period 2012-2013 in the

amount of Rp748.350.000.000,00 (seventy

hundred fourty eight billion three hundred

fifty million rupiah) the implementation of which

shall be provided in a Regulation of Minister of

Finance.

(4) The Goods and Service Value Added Tax and Tax on

Sale of Luxurious Items as referred to in paragraph (2)

letter b shall be planned to be in the amount of

Rp576.469.166.972.000,00 (five hundred

seventy six trillion four hundred sixty nine

billion one hundred sixty six million nine

hundred seventy two thousand rupiah).

(5) Land and Building Tax revenue as referred to in

paragraph (2) letter c shall be planned to be in the

amount of Rp26.689.881.492.000,00 (twenty six

trillion six hundred eighty nine billion eight

hundred eighty one million four hundred

ninety two thousand rupiah).

(6) Excise revenue as referred to in paragraph (2) letter d

shall be planned to be in the amount of

Rp145.739.923.240.000,00 (one hundred

fourty five trillion seven hundred thirty nine

billion nine hundred twenty three million two

hundred fourty thousand rupiah).

(7) Other tax revenues as referred to in paragraph (2) letter

e shall be planned to be in the amount of

Rp11.729.490.371.000,00 (eleven trillion

seven hundred twenty nine billion four

hundred ninety million three hundred seventy

one thousand rupiah).

(8) International Trade Tax Revenue as referred to in

paragraph (1) letter b shall be planned to be in the

amount of Rp49.256.889.890.000,00 (fourty nine

trillion two hundred fifty six billion eight

hundred eighty nine million eight hundred

ninety thousand rupiah), consists of:

a. import duty revenue; and

b. export duty revenue.

(9) Import duty revenue as referred to in paragraph (8)

letter a is planned to be in the amount of

Rp37.203.870.000.000,00 (thirty seven trillion

two hundred three billion eight hundred seventy

million rupiah) including import duty facility paid by

the Government (BM DTP) in the amount of

Rp1.000.000.000.000,00 (one trillion rupiah).

(10) Export duty revenue as referred to in paragraph (8)

letter b shall be planned to be in the amount of

Rp12.053.019.890.000,00 (twelve trillion fifty

three billion nineteen million eight hundred

ninety thousand rupiah).

(11) The breakdown of Tax Revenues of the Fiscal Year 2015

as referred to in paragraph (2) and paragraph (8) shall

be provided further in Presidential Decree.


Article 5

(1) PNBP as referred to in Article 3 letter b shall be planned

to be in the amount of Rp269.075.425.159.000,00

(two hundred sixty nine trillion seventy five

billion four hundred twenty five million one

hundred fifty nine thousand rupiah), consists of:

a. natural resource revenue;

b. revenue from the portion of BUMN’s profit;

c. other PNBP; and

d. BLU revenue.

(2) Natural resource revenue as referred to in

paragraph (1) letter a shall be planned to be in the

amount of Rp118.919.130.259.000,00 (one

hundred eighteen trillion nine hundred nineteen

billion one hundred thirty million two hundred

fifty nine thousand rupiah), consists of:

a. revenue from oil and gas natural resource (SDA

migas); and

b. revenue from non-oil and gas natural resource (SDA

nonmigas).

(3) Revenue from the portion of BUMN’s profit as referred to

in paragraph (1) letter b shall be planned to be in the

amount of Rp36.956.500.000.000,00 (thirty six

trillion nine hundred fifty six billion five

hundred million rupiah).

(4) In order to optimize the Government revenue from the

portion of BUMN’s profit in the field of banking,

settlement of non-performing receivables at BUMN in

the business field of banking is conducted:

a. in accordance with the provision of the prevailing

laws and regulations in the field of Limited Liability

Company (PT), BUMN, and Banking;

b. by observing the good corporate governance

principles; and

c. the Government shall perform supervision of

settlement of non-performing receivables at BUMN

in the business field of banking.

(5) Other PNBP as referred to in paragraph (1) letter c shall

be planned to be in the amount of

Rp90.109.584.375.000,00 (fninety trillion one

hundred nine billion five hundred eighty four

million three hundred seventy five thousand

rupiah).

(6) BLU revenue as referred to in paragraph (1) letter d


Rp23.090.210.525.000,00 (twenty three

trillion ninety billion two hundred ten million

five hundred twenty five thousand rupiah).

(7) The breakdown of PNBP of Fiscal Year 2014 as referred

to in paragraph (2), paragraph (3), paragraph (5), and

paragraph (6) shall be provided further by Presidential

Decree.


Article 6

Grant Revenue as referred to in Article 3 letter c shall be

planned to be in the amount of

Rp3.311.903.947.000,00 (three trillion three

hundres eleven billion nine hundred three million

nine hundred fourty seven thousand rupiah).


Article 7

Budget of Government Expenditures of the Fiscal Year

2015 shall be planned to be in the amount of


ninehundred eighty four trillion one hundred fourty

nine billion seven hundred fourteen million eight

hundred sixty five thousand rupiah), consists of:

a. budget of Central Government’s Expenditures; and

b. budget of Transfer to Region and Rural Fund.

6. Provisions in paragraph (1), paragraph (2), and

paragraph (5) A r t i c l e 8 is changed as follows:

Article 8

(1) Budget of Central Government’s Expenditures as

referred to in Article 7 letter a shall be planned to be in

the amount of Rp1.319.548.973.690.000,00 (one

quadrillion three hundred nineteen trillion five

hundres fourty eight billion nine hundred

seventy three million nine hundred ninety

thousand rupiah).


referred to in paragraph (1) shall include state grant

management program in the amount of

Rp4.621.727.025.000,00 (four trillion six

hundred twenty one billion seven hundred

twenty seven million twenty five thousand

rupiah) which are granted and/or forward granted to

regions.


referred to in paragraph (1) shall be classified as

follows:

a. Central Government’s Expenditures

according to Organization;

b. Central Government’s Expenditures

According to Function; and

c. Central Government’s Expenditures

According to Program.


referred to in paragraph (1) includes the granting of

reward and imposition of punishment for the

implementation of budget of expenditures of State

Ministry/Institution of 2013 based on the results of

audit of the Supreme Audit Agency (BPK).

(5) The breakdown of budget of Central Government’s

Expenditures according to Organization, Function, and

Program as referred to in paragraph (3) shall be

provided further by a Presidential Decree.


Article 9

(1) Budget of Transfer to Regions and Village Fund as

referred to in Article 7 letter b shall be planned to be in

the amount of Rp664.600.741.175.000,00 (six

hundred sisty four trillion six hundred billion

seven hundred fourty one million one hundred

seventy five thousand rupiah), consists of:

a. Transfer to region; and

b. Rural Fund.

(2) Transfer to Regions as referred to in paragraph (1) letter

a shall be planned to be in the amount of

Rp643.834.541.175.000,00 (six hundred

fourty three trillion eight hundred thirty four

billion five hundred fourty one million one

hundred seventy five thousand rupiah),

consists of:

a. Balance Fund;

b. Special Autonomy Fund;

c. Special Fund for Special Region of Yogyakarta;

and

d. Other Transfer Funds.

(3) Rural Fund as referred to in paragraph (1) letter b shall

be planned to be in the amount of

Rp20.766.200.000.000,00 (twenty trillion

seven hundred sixty six billion two hundred

million rupiah).

8. Provisions in paragraph (1), paragraph (2), paragraph

(3), paragraph (5), paragraph (6), and paragraph (7)

Article 10 are changed, between paragraph (7) and

paragraph (8) is added 1 (one) paragraph that is

paragraph (7a), after paragraph (8) is added 1 (one)

paragraph that is paragraph (9), hence Article 10 is as

follows:

Article 10

(1) Balance Fund as referred to in Article 9 paragraph (2)

letter a shall be planned to be in the amount of

Rp521.760.517.233.000,00 (five hundred

twenty one trillion seven hundred sixty billion

five hundred seventeen million two hundred

thirty three thousand rupiah), consists of:

a. DBH;

b. DAU; and

c. DAK.

(2) DBH as referred to in paragraph (1) letter a shall be


Rp110.051.993.705.000,00 (one hundres ten

trillion fifty one million nine hundred ninety

three seven hundred five thousand rupiah).

(3) DAU as referred to in paragraph (1) letter b shall be

allocated in the amount of 27,7% (twenty seven point

seven percent) of the net Domestic Revenue (PDN) or


Rp352.887.848.528.000,00 (three hundred fifty

two trillion eight hundred eghty seven billion

eight hundred fourty eight million five hundred

twenty eight thousand rupiah).

(4) Net PDN as referred to in paragraph (3) shall be

calculated based on the addition of Taxation Revenue

and PNBP, less State Revenue Shared with the Regions.

(5) In case of any change in APBN which results in the

decrease or increase of Net PDN, the amount of DAU

will not change.

(6) DAK as referred to in paragraph (1) letter c shall be


Rp58.820.675.000.000,00 (fifty eight trillion

eight hundred twenty million six hundred

seventy five million rupiah), consists of:

a. DAK in the amount of Rp.33.000.000.000.000,00

(thirty three trillion rupiah); and

b. Additional DAK in the amount of

Rp25.820.675.000.000,00 (twenty five

trillion eight hundred twenty billion six hundred

seventy five million rupiah), consists of:

1. DAK affirmative to underdeveloped and

near border regency/municipal that has

relatively low financial capability

Rp2.820.675.000.000,00 (two trillion eight

hundred twenty billion six hundred seventy

five million rupiah); and

2. DAK Priority Program Support for

Kabinet Kerja (P3K2) and DAK Local

Government proposals approved by

House of Representatives of Republic

Indonesia in the amount of

Rp23.000.000.000.000,00 (twenty three

trillion rupiah).

(7) Additional DAK as referred to in paragraph (6) letter b

number 1 shall be used to fund the activities as follows:

a. transportation infrastructure in the amount of

Rp.1.812.171.000.000,00 (one trillion eight

hundred twelve billion one hundred seventy one

million rupiah);

b. irrigation infrastructure in the amount of

Rp.496.405.000.000,00 (four hundred ninety six

billion four hundred five million rupiah);

c. sanitation and potable water infrastructure in the

amount of Rp.512.099.000.000,00 (five hundred

twelve billion ninety nine million rupiah);

(7a) Additional DAK as referred to in paragraph (6) letter

b number 2 shall be used to fund the activities as

follows:

a. farming in the amount of

Rp4.000.000.000.000,00 (four trillion

rupiah);

b. irrigation infrastructure in the amount of

Rp3.126.596.993.000,00 (three trillion one

hundred twenty six billion five hundred

ninety six million nine hundred ninety

three thousand rupiah);

c. transportation in the amount of

Rp12.153.853.343.900,00 (twelve trillion

one hundred fifty three billion eight

hundred fifty three million three hundred

fourty three thousand nine hundred

rupiah);

d. trade facilities in the amount of

Rp892.410.299.600,00 (eight hundred

ninety two billion four hundred ten million

two hundred ninety nie thousang six

hundred rupiah); dan

e. health in the amount of

Rp2.827.139.363.500,00 (two trillion eight

hundred twenty seven billion one hundred

thirty nine million three hundred sixty

three thousand five hundred rupiah).

(8) Viability-gap fund for additional DAK as referred

to in paragraph (7) shall be stipulated based on

regional financial capability in underdeveloped

and near borders regency/municipal provided as

follows:

a. very low regional financial capability is to

provide viability-gap fund at least

amounting to 0% (zero percent);

b. low regional financial capability is to


amounting to 1% (one percent);

c. medium regional financial capability is to


amounting to 2% (two percent).

(9) Viability-gap fund for regency/municipal

receives additional DAK as referred to in

paragraph (7a) is to provide viability-gap fund at

least amounting to 0% (zero percent).


Article 11

(1) Special Autonomy Fund as referred to in Article 9 letter

b shall be planned to be in the amount of

Rp17.115.513.942.000,00 (seventeen trillion

one hundred fifteen billion five hundred

thirteen million nine hundred fourty two

thousand rupiah), consists of:

a. Special Autonomy Fund Allocation of Papua

Province and West Papua Province in the amount

of Rp.7.057.756.971.000,00 (seven trillion fifty

seven billion seven hundred fifty six million nine

hundred seventy one thousand rupiah) mutually

agreed to be distributed respectively 70% (seventy

percent) for Papua Province and 30% (thirty

percent) for West Papua Province with details as

follows:

1. Special Autonomy Fund of Papua Province in

the amount of Rp.4.940.429.880.000,00 (four

trillion nine hundred forty billion four hundred

twenty nine million eight hundred eighty

thousand rupiah).

2. Special Autonomy Fund of West Papua

Province in the amount of

Rp.2.117.327.091.000,00 (two trillion one

hundred seventeen billion three hundred

twenty seven million ninety one thousand

rupiah).

b. Special Autonomy Fund Allocation of Aceh


Rp.7.057.756.971.000,00 (seven trillion fifty seven

billion seven hundred fifty six million nine hundred

seventy one thousand rupiah); and

c. Additional infrastructure fund with respect to

special autonomy of Papua Province and West

Papua Province in the amount of

Rp3.000.000.000.000,00 (three trillion rupiah)

with details as follows:

1. Additional infrastructure fund for Papua


Rp2.250.000.000.000,00 (two trillion two

hundred fifty billion rupiah); and

2. Additional infrastructure fund for West Papua


Rp750.000.000.000,00 (seven hundred fifty

billion rupiah).

(2) The Special Fund of Yogyakarta Special Region as

referred to in Article 9 paragraph (2) letter c shall be in

the amount of Rp.547.450.000.000,00 (five hundred

forty seven billion four hundred fifty million rupiah).

(3) Other Transfer Funds as referred to in Article 9

paragraph (2) letter d shall be planned to be in the

amount of Rp.104.411.060.000.000,00 (one hundred

four trillion four hundred eleven billion sixty million

rupiah), with details as follows:

a. Teacher Profession Allowance (TPG) of Regional

PNS (Government Civil Servants) in the amount of

Rp.70.252.670.000.000,00 (seventy trillion two

hundred fifty two billion six hundred seventy

million rupiah);

b. Additional Income Fund for Teachers of Regional

PNS (Government Civil Servants) in the amount of

Rp.1.096.000.000.000,00 (one trillion ninety six

billion rupiah);

c. School Operation Assistance (BOS) in the amount

of Rp.31.298.300.000.000,00 (thirty one trillion

two hundred ninety eight billion three hundred

million rupiah);

d. Regional Incentive Fund (DID) in the amount of

Rp.1.664.510.000.000,00 (one trillion six hundred

sixty four billion five hundred ten million rupiah);

and

e. Local Government Project and Decentralization

Fund (P2D2) in the amount of

Rp.99.580.000.000,00 (ninety nine billion five

hundred eighty million rupiah.


Article 12

The breakdown of Budget of Transfer to Regions and

Village Fund as referred to in Article 9, Article 10, and

Article 11, shall be provided further by Presidential

Decree.

11. Provisions in paragraph (1), paragraph (3),

paragraph (4), and paragraph (6) Article 13 is

changed as follows:

Article 13

(1) Subsidy Management Program in the Fiscal Year of

2015 shall be planned in the amount of

Rp212.104.385.353.000,00 (two hundred twelve

trillion one hundred four billion three hundred

eighty five million three hundred fifty three

thousand rupiah).

(2) Budget for Subsidy Management as referred to in

paragraph (1) shall be used effectively right on target.

(3) Budget for subsidy as referred to in paragraph (1) may

be adjusted with the realization requirement of the

corresponding fiscal year based on changes to the

parameter and/or realization of Indonesia Crude Price

Price (ICP) and rupiah exchange rate.

(4) In case the change of parameter as referred to in

paragraph (3) is in term of change of volume of

subsidized Fuel (BBM), the Government shall discuss

such change of condition with the People of

Representative of the Republic of Indonesia (DPR RI) in

order to obtain approval.

(5) Allocation as referred to in paragraph (1) includes the

shortfalls in the previous fiscal year payable according

to the result of audit of the Supreme Audit Agency

(BPK).

(6) The breakdown of Subsidy Management Program of

Fiscal Year 2015 as referred to in paragraph (1) shall be

provided further by Presidential Decree.


Article 17

(1) Education Budget shall be planned to be in the

amount of Rp408.544.684.304.000,00 (four

hundred eight trillion five hundred fourty four

billion six hundred eighty four million three

hundred four thousand rupiah).

(2) The percentage of Education Budget shall be 20,59%

(twenty point fifty nine percent), which constitutes

the comparison of the allocation of Education Budget as

referred to in paragraph (1) to the total Budget of

Government Expenditures amounting to


ninehundred eighty four trillion one hundred

fourty nine billion seven hundred fourteen

million eight hundred sixty five thousand

rupiah).

(3) The details of Education Budget as referred to in

paragraph (1) shall be provided further by Presidential

Decree.

13. Provision in paragraph (1), paragraph (2), and

paragraph (4) Article 18 are changed, besides after

paragraph (4) is added 1 (one) paragraph that is

paragraph (5), hence Article 18 is as follows:

Article 18

(1) The amount of budget of Government

Revenues of Fiscal Year 2015 as referred to in

Article 3 shall be less than the amount of

budget of the Government Expenditures as

referred to in Article 7, so that in the Fiscal

Year 2015 there is a budget deficit amounting

to Rp222.506.897.630.000,00 (two hundred

twenty two trillion five hundred six billion

eight hundred ninety seven million six

hundred thirty thousand rupiah) which will be

financed from the Budget Financing.

(2) The Budget Financing of Fiscal Year 2015 as referred to

in paragraph (1) shall be obtained from the following

sources:

a. Domestic Financing amounting of

Rp242.515.005.350.000,00 (two hundred

fourty two trillion five hundred fifteen billion

five million three hundred fifty thousand

rupiah); and

b. Net Foreign Financing amounting to negative

Rp20.008.107.720.000,00 (twenty trillion

eight billion one hundred seven million seven

hundred twenty thousand rupiah).

(3) Net Foreign Financing as referred to in paragraph (2)

letter b shall cover foreign loan financing, but exclude

issuance of SBN in the international market.

(4) The breakdown of the Budget Financing of Fiscal Year

2015 as referred to in paragraph (2) shall be that as set

out in the Annex herein.

(5) Further provision regarding the breakdown of

Budget Financing that as set out in the annex

herein shall be provided in the Presidential

Decree.

14. Between Article 23 and Article 24 is inserted 2

(two) article, article 23A and article 23B as

follows:

Article 23A

(1) All investment made by Pusat Investasi

Pemerintah will be transferred to PT Sarana

Multi Infrastruktur (Persero).

(2) Transference as referred to paragraph (1) shall

be provided further by Presidential Decree.

Article 23B

(1) For settlement of land and building affected by

mud in Sidoarjo, fund is allocated in the amount

of Rp781.688.212.000,00 (seven hundred eighty

one billion six hundred eighty eight two hundred

twelve thousand rupiah).

(2) Fund as referred in paragraph (1) is contigency

fund to resolve purchase on land and building

affected by mud in Sidoarjo that included in

affected map of PT Lapindo Brantas Inc./PT

Minarak Lapindo Jaya responsibility.

(3) Contigency fund as referred in paragraph (2) can

only be used should PT Lapindo Brantas Inc./PT

Minarak Lapindo Jaya cannot fulfill the

settlement of affected area based on audit of

Badan Pengawasan Keuangan dan

Pembangunan.

(4) Contigency fund as referred in paragraph (2) and

paragraph (3) shall be provided further by

Presidential Decree.

15. Provison in Article 26 is remain with change in

elucidation of Article 26 paragraph (3), hence

elucidation of Article 26 is as become article by

article elucidation in the Law herein.

16. Between Article 31 and Article 32 is inserted 1

(one) article that is Article 31A, hence as follows:

Article 31A

Presidential Decree on the breakdown of Budget

Fiscal Year 2015 is stipulated no longer than

March 17th, 2015.


Article 32

The Government shall, in implementing the APBN

of Fiscal Year 2015, endeavor for the fulfillment of

the target of quality economic growth, which is

reflected in:

a. the decrease of poverty to 10,3% (ten point

three percent);

b. each 1% (one percent) of economic growth

which can employ around 250,000 (two

hundred fifty thousand) workers;

c. level of open unemployment becomes 5.6%

(five point six percent);

d. the decrease of Gini Ratio becomes 0,40 (zero

point fourty); and

e. the increase of human development index

(HDI) to become 69,4 (sixty nine point four).

Article II

This Law shall come into effect on the day it is

enacted.

In order for everyone to take cognizance of it, we hereby order

the enactment of this Law by its placement in the State

Gazette of the Republic of Indonesia.

Authenticated in Jakarta

dated March 6th, 2015


signed

JOKO WIDODO

Enacted in Jakarta

on March 6th, 2015

MINISTER OF LAW AND HUMAN RIGHTS OF THE REPUBLIC OF INDONESIA,

Signed

YASONNA H. LAOLY

STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2014 NUMBER 259

ELUCIDATION

OF

LAW OF THE REPUBLIC OF INDONESIA

NUMBER 3 OF 2015

CONCERNING

AMENDMENT OF THE LAW NUMBER 27 OF 2014 CONCERNING THE

INDONESIAN BUDGET FOR FISCAL YEAR 2015

I. GENERAL

Budget Fiscal Year 2015 as being stipulated in the Law Number

27 of 2014 concerning Indonesian Budget for Fiscal Year 2015

is implemented in reference of Law Number 17 of 2003 on

Public Finance, based on Government Work Plan (RKP) Year

2015 and Macroeconomic Design and Fundamentals of Fiscal

Policy Year 2015.

After Law Number 27 the Law Number 27 of 2014 concerning

Indonesian Budget for Fiscal Year 2015 is being enacted, there

are changes in (a) Government Work Plan (RKP) Year 2015 in

result of changing in fundamental fiscal policy among others

realocation of subsidy to more productive expenditure in order

to boost up economic growth in 2015; (b) the need to adjust

budget allocation interorganization units; and (c) the need to

finance new line ministries.

In regard of global economic weakening, 2015 domestic

economy is still performing and hopefully will be well-

maintained. Economic growth in 2015 will be maintained

around 5.7% (five point seven percent). In order to reach target,

governemet will optimize productive expenditure in strategic

sectors.

Inflation rate during 2015 is estimated around 5.0% (five point

zero percent) or slightly higher that the assumption in APBN

2015 that is 4.4% (four point four percent). The increase of

inflation rate among others is influenced by fuel subsidy policy

in 2014. Government and central bank are working together to

control inflation within 2015 targeted inflation threshold, 4.0% ±

1.0% (four point zero percent with one point zero percent

deviation).

On the other hand, on average Rupiah exchange rate to US

dollar in 2015 is expected to reach new equilibrium point

around Rp12.500 (twelve thousand five hundred rupiah) for

each US dollar or is depreciated compare to its assumption in

APBN 2015, Rp11.900 (evelen thousand nine hundred rupiah)

for each US dollar. In line with it, interest rate for 3-month

treasury bill (SPN) in 2015 is expected to encounter some

pressure and to reach higher rate from 6.0% (six point zero

percent) in assumption of APBN 2015 to 6.2% (six point two

percent). Pressure to exchange rate and 3-month SPN interest

rate is triggered by global tight liquidity especially in result of

increase in The Fed intereset rate in 2015.

Indonesia Crude Oil Price (ICP) in 2015 is expected to reach

US$60 (sixty US dollar) per barrel or lower than its assumption

in APBN 2015, US$105 (one hundred five US dollar) per barrel.

It is caused by significant fall in world oil price, especially due to

abundant oil supply from utilization of shale oil and

substitution of gas. On the other hand, expected realization of

oil lifting realization in 2015 is only 825 (eight hundred twenty

five) thousand barrel per day below its assumption in APBN

2015 target, 900 (nine hundred) thousand barrel per day.

Meanwhile, natural gas lifting is expected to reach 1.221 (one

thousand two hundred twenty one) thousand barrel oil

equivalent per day. Main reasons of these assumptions being

lower are due to natural caused of production capacity and

underutilization of new oil fields.

Modification on basic macroeconomic assumptions in turn will

affect APBN posture as well as change in fiscal policy in order to

improve APBN through deficit management.

Conducive domestic economic condition hopefully will support

to achieve national development goals in 2015, among others,

69.4 (sixty nine point four) of human development index and

0.40 (zero point fourty) of gini coefficient.

Session on Law of Amendment of Law Number 27 of 2014

concerning Budget Fiscal Year 2015 is conducted between

House of Representative and Government with valuing concern

from House of Regional Representatives (DPD) as listed in the

letter Number 16/DPD RI/II/2014-2015 dated January 28th,

2015.

Based on provision in Article 27 Law Number 17 of 2003

concerning Public Finance juncto Article 29 Law Number 27 of

2014 concerning Budget Fiscal Year 2015, modifications of

Budget on Fiscal Year 2015 shall be stipulated on a Law.

Session regarding this Law is conducted by the government and

DPR concerning adjudication of Constitution Council (MK)

Number 35/PUU-XI/2013 dated May 22nd, 2014.

II. ARTICLE BY ARTICLE

Article I

Number 1

Article 3

Self-explanatory.

Number 2

Article 4

Paragraph (1)

Self-explanatory.

Paragraph (2)

Self-explanatory.

Paragraph (3)

Letter a

Self-explanatory

Letter b

As referred by “the third-party tax bear by

government” is third-party who has given

their services in regard of SBN offering

and/or buy-back/exchange in

international market, among others broker

service and international legal consultant

and exchanger agent/buyer.

Paragraph (4)

Self-explanatory.

Paragraph (5)

Self-explanatory.

Paragraph (6)

Self-explanatory.

Paragraph (7)

Self-explanatory.

Paragraph (8)

Self-explanatory.

Paragraph (9)

Self-explanatory.

Paragraph (10)

Self-explanatory.

Paragraph (11)

Self-explanatory.

Number 3

Article 5

Paragraph (1)

Self-explanatory.

Paragraph (2)

Letter a

Self-explanatory.

Letter b

Non oil and gas natural resources revenue

comes from forestry sector not only

intended to achieve revenue target, but

also to preserve forests.

Paragraph (3)

Self-explanatory.

Paragraph (4)

While waiting for amendment of Law Number

49 Prp of 1960 concerning State Recievable

Affairs Committee and to accelerate

nonperforming loan in banking SOEs,

executing recievables management based on

enacted Law on limited liability company and

Law on banking sector.

Whereas, in regard of granting authority to

shareholders meeting and government

supervision to settle non performing loan in

banking SOEs based on Law on SOE.

Paragraph (5)

Self-explanatory.

Paragraph (6)

Self-explanatory.

Paragraph (7)

Self-explanatory.

Number 4

Article 6

Self-explanatory.

Number 5

Article 7

Self-explanatory

Number 6

Article 8

Self-explanatory.

Number 7

Article 9

Paragraph (1)

Transfer to Region for Fiscal Year 2015 to New

Autonomous Region (DOB) established in 2014

is sets as follows:

1. DBH

a. DBH of Tax

1) Allocation of DBH PPh Individual, and

DBH PBB non migas obtained by

parent region shall be distributed to

DOBs according to the receiving plan.

2) Allocation of DBH PBB Oil and Gas

obtained by parent region shall be

distributed to DOBs proportionally

based on the number of population

and the area.

3) Allocation of DBH Tax as the result of

equalization obtained by the parent

region shall be distributed to DOBs

evenly.

4) Allocation of DBH CHT obtained by

parent region shall be distributed to

DOBs proportionally based on the

number of population.

b. DBH of Natural Resources (SDA)

1) Allocation of DBH SDA of parent region

being the producer region shall be

distributed to DOB proportionally

according to the number of population

and the area.

2) Allocation of DBH SDA of parent region

non producer shall be distributed to

DOBs evenly.

2. DAU

a. DAU for DOB shall be allocated after the

authentication of the Establishment Law.

b. The computation of DAU shall be

conducted by dividing proportionally

(split) with parent region using data on

the number of population, the area, and

employee’s expenditures.

3. DAK

a. Pursuant to the mandate of the Law on

Establishment of DOB, DOB shall be

prioritized to receive allocation of DAK of

Regional Government Facility and

Infrastructure.

b. Parent region affected by expansion shall

be prioritized to receive allocation of DAK

of Regional Government Infrastructure.

c. DAK of other fields shall be allocated on

the second year by taking into

consideration the readiness of regional

apparatus to implement DAK activities.

4. Other Transfer Funds

Teacher Profession Allowance and additional

income of PNSD Teacher shall be allocated

based on data on the number of teacher

between parent region and DOBs.

Paragraph (2)

Self-explanatory.

Paragraph (3)

Rural Fund is allocated to regency/municipal

based on allocation shared evenly to all village

and formula based allocation concerning

population, poverty rate, area and geographical

difficulty index.

Data on number of village, number of

population, rural poverty rate, area, and

geographical difficulty index come from

government and/or statistics bureau.

Number 8

Article 10

Paragraph (1)

Self-explanatory.

Paragraph (2)

This DBH includes individual domestic tax

income Article 25 and Article 29 which its

collection is final based on Government

Regulation Number 46 of 2013 on tax income

of earnings received by taxpayers’ business

which has certain gross circulation.

In order to control the implementation of the

budget, DBH distribution can not be entirely

channeled from allocation, and subsequently

accounted for as underpayment DBH

Paragraph (3)

Self-explanatory.

Paragraph (4)

PDN net of Rp1.273.963.352.085.000,00 (one

quadrillion two hundred and seventy-three

billion nine hundred and sixty-three billion

three hundred and fifty-two million eighty five

thousand dollars) is calculated based on the

sum of tax revenues amounted to Rp1.379.991.

627,125,000.00 (one quadrillion three hundred

seventy-nine billion nine hundred ninety one

billion six hundred twenty-seven million one

hundred twenty five thousand rupiah) and non-

tax revenues amounted to

Rp410.340.976.934.000,00 (four hundred ten

billion three hundred forty billion nine hundred

and seventy-six million nine hundred thirty

four thousand rupiah), is deducted by the

Revenue-sharing fund to region, which consists

of:

a. Individual domestic tax income Article 25 and

Article 29 and article 21 in the amount of

Rp115.707.082.589.000,00 (one hundred

fifteen trillion seven hundred seven billion

eighty two million five hundred eighty-nine

thousand rupiah);

b. Land and Building tax (PBB) in the

amount of Rp26.684.096.175.000,00

(twenty six trillion six hundred eighty-four

billion ninety six million one hundred

seventy five thousand rupiah);

c. Tobacco excise in the amount of

Rp120.557.190.000.000,00 (one hundred

twenty trillion five hundred fifty seven

billion, one hundred and ninety million

rupiah);

d. Natural resources revenue from oil and gas

in the amount of

Rp224.263.060.000.000,00 (two hundred

twenty four trillion two hundred sixty three

billion sixty million rupiah);

e. Natural resources revenue from mineral

and coal in the amount of

Rp24.599.745.000.000,00 (twenty four

trillion five hundred ninety nine billion

seven hundred fourty five million rupiah);

f. Natural resources revenue from forestry in

the amount of Rp3.724.400.000.000,00 (

three trillion seven hundred twenty four

billion four hundred million rupiah);

g. Natural resources revenue from fishery in

the amount of Rp250.000.001.000,00 (two

hundred fifty billion one thousand rupiah);

dan

h. Natural resources revenue from geothermal

in the amount of Rp583.678.209.000,00

(five hundred eighty three billion six

hundred seventy eight million two hundred

nine thousand rupiah).

Paragraph (5)

Self-explanatory.

Paragraph (6)

Letter a

Self-explanatory.

Letter b

Number 1

Marginalized and perypheral

regions/municipals are regulated with

separate regulations.

The amount of Affirmated DAK for

marginalized and peripheral areas

measured by general criteria, special

criteria and technical criteria.

Number 2

Regions receiving DAK supporting

priority programs of Kabinet Kerja is

set by special criteria based on each

sector priorities.

The amount of each DAK supporting

priority programs of Kabinet Kerja for

each area is measured by technical

criteria on each sector priorities.

Regions receiving DAK region’s

proposal and agreed by DPR RI is

based on criteria and/or regions

proposal, where its allocation is based

on the proposal concerning available

DAK fund.

Paragraph (7)

Self-explanatory.

Paragraph (7a)

Self-explanatory.

Paragraph (8)

Self-explanatory.

Paragraph (9)

Self-explanatory.

Number 9

Article 11

Self-explanatory.

Number 10

Article 12

Self-explanatory.

Number 11

Article 13

Self-explanatory.

Number 12

Article 17

Paragraph (1)

Besides education funs, government also

managing national education development fund

(DPPN), which also part of accumulation of

education fund in previous years as

endowment fund and managed by Lembaga

Pengelola Dana Pendidikan.

The output of endowment fund aims to ensure

education program for the next generation as

intergenerational responsibility, among others

in term of scholarship, research fund and

reserve fund to anticipate rehabilitation of

education facilities due to natural disaster.

Paragraph (2)

Self-explanatory.

Paragraph (3)

Self-explanatory.

Number 13

Article 18

Paragraph (1)

Self-explanatory.

Paragraph (2)

Domestic financing components among others

are government capital participation (PMN) to

Central Bank (BI) as follow up ownership quota

or government capital in IMF toward BI

consisted of promissory notes and hard

currency. Transferred record of aforementioned

component is using assets neto which part of

net value of government hard currency in IMF

using BI reserves fund to capital participation

in International Financial Institution and

promissory notes.

Paragraph (3)

Self-explanatory.

Paragraph (4)

Self-explanatory.

Paragraph (5)

Self-explanatory.

Number 14

Article 23A

Paragraph (1)

Government investment in Government

Investment Centre is investment from APBN

year 2006 to 2013 including investment to PT

PLN and other parties.

Allocation to each government participation is

based on audit by the Development Finance

Controller Agency

Paragraph (2)

Self-explanatory.

Article 23B

Paragraph (1)

Payment to the owner of land and building in

map of affected areas by Sidoarjo mud is

executed by Badan Penanggulangan Lumpur

Sidoarjo.

Paragraph (2)

Anticipation fund is government fund for direct

payment to the owner of land and building in

map of affected areas by Sidoarjo mud, which

should be used as loan to PT Lapindo Brantas

Inc/ PT Minarak Lapindo Jaya towards

Government.

Paragraph (3)

Self-explanatory.

Paragraph (4)

Regulated material in Presidential Decree

among others:

3. Criteria for issuing anticipation fund from

government to PT Lapindo Brantas Inc/ PT

Minarak Lapindo Jaya.

4. Engagement items among government and

PT Lapindo Brantas Inc/ PT Minarak

Lapindo Jaya in term of anticipation fund

disbursement

5. PT Lapindo Brantas Inc/ PT Minarak

Lapindo Jaya collaterals in regard of

anticipation fund in term of compensation

for land, which has been paid by PT Lapindo

Brantas Inc/ PT Minarak Lapindo Jaya.

6. Payment mechanism to the owners of land

and building affected by the mud

7. Mechanism of repayment of anticipation

fund from PT Lapindo Brantas Inc/ PT

Minarak Lapindo Jaya to government

Number 15

Article 26

Paragraph (1)

Expense overs its ceiling due to among others:

1. Macroeconomic condition deviated from its

expectation when forming Revised APBN

and/or realization report of First semester

APBN year 2015;

2. Loan restructuring in term of loan managing

portfolio;

3. Effect of loan drawing acceleration;

4. Effect of hedging on interest payment and

principal payment

Paragraph (2)

Hedging transaction is reported on Central

Government Financial Report (LKPP) Year 2015

Paragraph (3)

Self-explanatory.

Paragraph (4)

“Not part of government financial loss” due to

heging is aiming to protect interest payment and

principal payment from exchange rate and interest

fluctuation, also hedging is not aiming to rent

seeking action

Paragraph (5)

Self-explanatory.

Number 16

Article 31A

Self-explanatory.

Number 17

Article 32

Poverty line is set by national poverty line method

conducted by Statistic Bureau

Article II

Self-explanatory.

SUPPLEMENTARY STATE GAZETTE OF THE REPUBLIC OF INDONESIA

NUMBER 5669

SUPPLEMENT

LAW OF THE REPUBLIC OF INDONESIA NUMBER 3 YEAR 2015 CONCERNING REVISION OF LAW NUMBER 27 YEAR 2014

CONCERNING BUDGET FISCAL YEAR 2015

Formerly Becoming

BUDGET FINANCING 245.894.690.062.000,00 222.506.897.630.000,00

1. DOMESTIC FINANCING 269.709.700.514.000,00 242.515.005.350.000,00 1.1 Domestic Banking 4.467.479.293.000,00 4.785.365.489.000,00

1.1.1 Subsidiary loan repayment revenue 4.467.479.293.000,00 4.785.365.489.000,00 1.2 Domestic Nonbanking 265.242.221.221.000,00 237.729.639.861.000,00 1.2.1 Assets management 350.000.000.000,00 350.000.000.000,00 1.2.2 Government Bond (neto) 277.049.800.000.000,00 297.698.382.000.000,00 1.2.3 Domestic Loan (neto) 1.621.190.000.000,00 1.690.600.000.000,00 1.2.3.1 Domestic Loan Drawing bruto 2.000.000.000.000,00 2.000.000.000.000,00

1.2.3.2 Domestic loan Principal payment -378.810.000.000,00 -309.400.000.000,00

1.2.4 Government Investment Fund 12.647.146.779.000,00 -58.844.130.927.000,00 1.2.4.1 Return of Investment 778.320.274.000,00 19.134.920.274.000,00 1.2.4.2 Government Participation (PMN) -7.319.167.053.000,00 -70.372.751.201.000,00

1.2.4.2.1 PMN to SOEs -5.107.307.000.000,00 -64.883.907.000.000,00 1.2.4.2.1.1 PT PAL Indonesia -1.500.000.000.000,00 -1.500.000.000.000,00 1.2.4.2.1.2 PT Sarana

Multigriya Finansial

-1.000.000.000.000,00

-1.000.000.000.000,00 1.2.4.2.1.3 PT Geo Dipa Energi -607.307.000.000,00 -607.307.000.000,00 1.2.4.2.1.4 PT Sarana Multi

Infrastruktur

-2.000.000.000.000,00

-20.356.600.000.000,00

1.2.4.2.1.5 PT Penjaminan Infrastruktur Indonesia

0,00

-1.500.000.000.000,00 1.2.4.2.1.6 Perum Bulog 0,00 -3.000.000.000.000,00 1.2.4.2.1.7 PT Pertani 0,00 -470.000.000.000,00 1.2.4.2.1.8 PT Sang Hyang

Seri 0,00 -400.000.000.000,00 1.2.4.2.1.9 PT Perikanan

Nusantara

0,00

-200.000.000.000,00 1.2.4.2.1.10 Perum Perikanan

Indonesia

0,00

-300.000.000.000,00

1.2.4.2.1.11 PT Garam 0,00 -300.000.000.000,00 1.2.4.2.1.12 PT Perkebunan

Nusantara III

0,00

-3.150.000.000.000,00 1.2.4.2.1.13 PT Perkebunan

Nusantara VII

0,00

-17.500.000.000,00 1.2.4.2.1.14 PT Perkebunan

Nusantara IX

0,00

-100.000.000.000,00 1.2.4.2.1.15 PT Perkebunan

Nusantara X

0,00

-97.500.000.000,00 1.2.4.2.1.16 PT Perkebunan

Nusantara XI

0,00

-65.000.000.000,00 1.2.4.2.1.17 PT Perkebunan

Nusantara XII

0,00

-70.000.000.000,00 1.2.4.2.1.18 PT Permodalan

Nasional Madani

0,00

-1.000.000.000.000,00 1.2.4.2.1.19 PT Angkasa Pura

II 0,00 -2.000.000.000.000,00 1.2.4.2.1.20 PT Angkutan

Sungai, Danau, dan Penyeberangan

0,00

-1.000.000.000.000,00

1.2.4.2.1.21 PT Pelni 0,00 -500.000.000.000,00 1.2.4.2.1.22 PT Djakarta Lloyd 0,00 -350.000.000.000,00 1.2.4.2.1.23 PT Hutama Karya 0,00 -3.600.000.000.000,00 1.2.4.2.1.24 Perum Perumnas 0,00 -1.000.000.000.000,00 1.2.4.2.1.25 PT Waskita Karya

Tbk.

0,00

-3.500.000.000.000,00 1.2.4.2.1.26 PT Adhi Karya

Tbk. 0,00 -1.400.000.000.000,00 1.2.4.2.1.27 PT Dok dan

Perkapalan Surabaya

0,00

-200.000.000.000,00

1.2.4.2.1.28 PT Dok dan Perkapalan Kodja Bahari

0,00

-900.000.000.000,00 1.2.4.2.1.29 PT Industri Kapal

Indonesia

0,00

-200.000.000.000,00 1.2.4.2.1.30 PT Dirgantara

Indonesia

0,00

-400.000.000.000,00 1.2.4.2.1.31 PT Aneka

Tambang Tbk.

0,00

-3.500.000.000.000,00

1.2.4.2.1.32 PT Pindad 0,00 -700.000.000.000,00

1.2.4.2.1.33 PT Kereta Api Indonesia

0,00

-2.000.000.000.000,00

1.2.4.2.1.34 PT Perusahaan Pengelola Aset

0,00

-1.000.000.000.000,00

1.2.4.2.1.35 PT Pelabuhan Indonesia IV

0,00

-2.000.000.000.000,00

1.2.4.2.1.36 PT Bahana PembinaanUsaha Indonesia

0,00

-250.000.000.000,00 1.2.4.2.1.37 PT Pengembangan

Pariwisata Indonesia

0,00

-250.000.000.000,00

1.2.4.2.1.38 PT Perusahaan Listrik Negara

0,00

-5.000.000.000.000,00

1.2.4.2.1.39 PT Askrindo dan Perum Jamkrindo

0,00

-1.000.000.000.000,00

1.2.4.2.2 PMN towards organization/ international

financial institution

-433.539.779.000,00

-250.523.927.000,00

1.2.4.2.2.1 International Bank

for Reconstruction And Development (IBRD)

-169.359.779.000,00

-177.898.927.000,00

1.2.4.2.2.2 International Fund for Agricultural Development (IFAD)

-47.600.000.000,00

-50.000.000.000,00

1.2.4.2.2.3 International

Development Association (IDA)

-216.580.000.000,00

-22.625.000.000,00

1.2.4.2.3 Other PMN -1.778.320.274.000,00 -5.238.320.274.000,00

1.2.4.2.3.1 Bank Indonesia (BI) -778.320.274.000,00 -778.320.274.000,00

1.2.4.2.3.2 Lembaga Pembiayaan Ekspor Indonesia (LPEI)

-1.000.000.000.000,00

-1.000.000.000.000,00

1.2.4.2.3.3 Badan Penyelenggara Jaminan Sosial (BPJS) Kesehatan

0,00

-3.460.000.000.000,00

1.2.4.3 Revolving Fund -6.106.300.000.000,00 -6.106.300.000.000,00

1.2.4.3.1 LPDB KUMKM -1.000.000.000.000,00 -1.000.000.000.000,00

1.2.4.3.2 Housing Finance center -5.106.300.000.000,00 -5.106.300.000.000,00 1.2.4.4 Investment finance on establishing

Assets Management BLU

0,00

-1.500.000.000.000,00 1.2.5 Mandatory Guarantee -1.131.622.000.000,00 -843.523.000.000,00 1.2.5.1 Accelerating development for coal

Power plant

-833.230.000.000,00

-792.026.000.000,00 1.2.5.2 Accelerating of drinking water

provision -1.903.000.000,00 -1.772.000.000,00

1.2.5.3 Partnership project between government and enterprises through Infrastructure Guarentee Penjaminan Infrastruktur

-296.489.000.000,00

-49.725.000.000,00 1.2.6 Anticipation fund for PT Lapindo Brantas

Inc./PT Minarak Lapindo Jaya

0,00

-781.688.212.000,00 1.2.7 Financing reserves for BPJS Kesehatan for

DJS Heath Program

0,00

-1.540.000.000.000,00

2. FOREIGN FINANCING (NETO) -23.815.010.452.000,00 -20.008.107.720.000,00 2.1 Foreign loan drawing bruto 47.037.121.419.000,00 48.647.035.745.000,00 2.1.1 Program loan 7.140.000.000.000,00 7.500.000.000.000,00 2.1.2 Project loan 39.897.121.419.000,00 41.147.035.745.000,00 2.1.2.1 Central Government Project Loan 35.577.749.548.000,00 36.675.092.280.000,00 2.1.2.1.1 Line Ministries Project Loan

32.881.457.258.000,00

33.915.244.340.000,00 2.1.2.1.2 Subsidiary grant of project loan

2.696.292.290.000,00

2.759.847.940.000,00

2.1.2.2 Revenue of subsidiary loan 4.319.371.871.000,00 4.471.943.465.000,00 2.2 Subsidiary loan to SOEs/Local government -4.319.371.871.000,00 -4.471.943.465.000,00 2.3 Foreign loan principal payment -66.532.760.000.000,00 -64.183.200.000.000,00


signed

JOKO WIDODO

ANNEX II:MAIN DATA OF STATE BUDGET

(APBN) Series in 2009–2015

1Financial N

ote and Revised B

udget 2015

Appendix II

Budget 2010 - 2015

APBN APBNP

4,6 6,1 6,5 6,3 5,8 5,1 5,8 5,7

2,78 6,96 3,79 4,30 8,38 8,36 4,40 5,00

10.408 9.087 8.776 9.384 10.460 11.878 11.900 12.500

7,60 6,57 4,84 3,19 4,42 5,80 6,00 6,20

61,6 79,4 111,5 112,7 105,9 97,0 105,0 60,0

944 954 899 861 825 794 900 825

- - - - 1.213 1.224 1.248 1.221

*) Before 2011 use 3-month SBI rate**) Assumptions used since 2013

TABLE 1BASIC MACROECONOMIC ASSUMPTIONS, 2010-2015

Indicator 2009 2010 2011 2012 20132015

2014

Economic Growth (%, yoy)

Inflation (%, yoy)

Rupiah Exchange Rate (Rp/US$)

Gas Lifting (thousand barrel equivalent to oil/day) **)

Oil Lifting (thousand barrel/day)

Indonesia Crude Oil Price (US$/barrel)

Avg. 3-month SPN Rate (%) *)

Appendix II

Budget 2010 - 2015

Financial Note and R

evised Budget 2015

2

2009 2010 2011 2012 2013 2014

LKPP LKPP LKPP LKPP LKPP LKPP Unaudited APBN APBNP

A. Revenues and Grants 848.763,2 995.271,5 1.210.599,7 1.338.109,6 1.438.891,1 1.550.100,4 1.793.588,9 1.761.642,8

I. Domestic Revenues 847.096,6 992.248,5 1.205.345,7 1.332.322,9 1.432.058,6 1.545.387,6 1.790.332,6 1.758.330,9

1. Tax Revenues 619.922,2 723.306,7 873.873,9 980.518,1 1.077.306,7 1.146.847,4 1.379.991,6 1.489.255,5

a. Domestic Tax Revenue 601.251,8 694.392,1 819.752,4 930.861,8 1.029.850,1 1.103.200,0 1.328.487,8 1.439.998,6

b. International Trade Tax 18.670,4 28.914,5 54.121,5 49.656,3 47.456,6 43.647,3 51.503,8 49.256,9

2. Non Tax Revenues 227.174,4 268.941,9 331.471,8 351.804,7 354.751,9 398.540,3 410.341,0 269.075,4

II. Grants 1.666,6 3.023,0 5.253,9 5.786,7 6.832,5 4.712,8 3.256,3 3.311,9

B. Government Expenditures 937.382,0 1.042.117,2 1.294.999,1 1.491.410,2 1.650.563,7 1.770.562,3 2.039.483,6 1.984.149,7

I. Central Government Expenditures 628.812,4 697.406,4 883.721,9 1.010.558,2 1.137.162,9 1.196.989,8 1.392.442,3 1.319.549,0

- Line Ministries Expenditures 306.999,5 332.920,2 417.626,2 489.445,9 582.940,2 570.587,0 647.309,9 795.480,4

- Non Line Ministries Expendirutes 321.812,9 364.486,2 466.095,7 521.112,3 554.222,7 626.402,8 745.132,4 524.068,6

II. Transfer to Region and Rural Fund 308.585,2 344.727,6 411.324,8 480.645,1 513.260,4 573.702,9 647.041,3 664.600,7

1. Transfer to Region 308.585,2 344.727,6 411.324,8 480.645,1 513.260,4 573.702,9 637.975,1 643.834,5

a. Balanced Fund 287.251,5 316.711,3 347.246,2 411.293,1 430.354,7 477.052,8 516.401,0 521.760,5

b. Special Autonomy Fund 9.526,6 9.099,6 10.421,3 11.952,6 13.445,6 16.148,8 16.615,5 17.115,5

c. Special Fund for DIY - - - - 115,7 419,1 547,5 547,5

d. Other Transfer Fund *) 11.807,2 18.916,7 53.657,2 57.399,4 69.344,4 80.082,3 104.411,1 104.411,1

2. Rural Fund - - - - - - 9.066,2 20.766,2

III. Suspend (15,6) (16,8) (47,5) 206,9 140,4 (130,5) - -

C. Primary Balance 5.163,3 41.537,5 8.862,4 (52.784,6) (98.637,2) (87.021,1) (93.926,4) (66.776,0)

D. Surplus/Deficit (A - B) (88.618,8) (46.845,7) (84.399,5) (153.300,6) (211.672,7) (220.461,9) (245.894,7) (222.506,9)

(1,58) (0,73) (1,14) (1,86) (2,33) (2,18) (2,21) (1,90)

E. Financing 112.583,3 91.552,0 130.948,9 175.158,2 237.394,6 245.024,4 245.894,7 222.506,9

I. Domestic Financing 128.133,1 96.118,5 148.748,1 198.622,5 243.199,7 261.235,8 269.709,7 242.515,0

II. Foreign Financing (netto) (15.549,8) (4.566,5) (17.799,2) (23.464,4) (5.805,2) (16.211,3) (23.815,0) (20.008,1)

Surplus/(Deficit) Financing 23.964,5 44.706,3 46.549,4 21.857,6 25.721,9 24.562,6 0,0 0,0

*) Before 2014 was called Adjustment Fund

TABLE 2Summary of Budget, 2009 – 2015

(billion rupiah)

2015

% to GDP

3Financial N

ote and Revised B

udget 2015

Appendix II

Budget 2010 - 2015

2009 2010 2011 2012 2013 2014


I. Domestic Revenues 847.096,6 992.248,5 1.205.345,7 1.332.322,9 1.432.058,6 1.545.387,6 1.790.332,6 1.758.330,9 1. Tax Revenues 619.922,2 723.306,7 873.873,9 980.518,1 1.077.306,7 1.146.847,4 1.379.991,6 1.489.255,5

a. Domestic Tax Revenues 601.251,8 694.392,1 819.752,4 930.861,8 1.029.850,1 1.103.200,0 1.328.487,8 1.439.998,6 1) Income Tax 317.615,0 357.045,5 431.121,7 465.069,6 506.442,8 546.169,8 644.396,1 679.370,1

a) Oil and Gas 50.043,7 58.872,7 73.095,5 83.460,9 88.747,4 87.445,9 88.708,6 49.534,8 b) Non-Oil and Gas 267.571,3 298.172,8 358.026,2 381.608,8 417.695,3 458.723,9 555.687,5 629.835,3

2) Value Added Tax 193.067,5 230.604,9 277.800,1 337.584,6 384.713,5 409.173,7 524.972,2 576.469,2 3) Land and Building Tax 24.270,2 28.580,6 29.893,2 28.968,9 25.304,6 23.477,8 26.684,1 26.689,9 4) Duties on Land and Building 6.464,5 8.026,4 (0,7) - - 0,1 - - 5) Excises 56.718,5 66.165,9 77.010,0 95.027,9 108.452,1 118.085,4 126.746,3 145.739,9 6) Others 3.116,0 3.968,8 3.928,2 4.210,9 4.937,1 6.293,3 5.689,1 11.729,5

b. International Trade Tax 18.670,4 28.914,5 54.121,5 49.656,3 47.456,6 43.647,3 51.503,8 49.256,9 1) Import Duties 18.105,5 20.016,8 25.265,9 28.418,4 31.621,3 32.318,3 37.203,9 37.203,9 2) Export Duties 565,0 8.897,7 28.855,6 21.237,9 15.835,4 11.329,0 14.299,9 12.053,0

2. Non Tax Revenues 227.174,4 268.941,9 331.471,8 351.804,7 354.751,9 398.540,3 410.341,0 269.075,4 a. Natural Resources 138.959,2 168.825,4 213.823,3 225.844,0 226.406,2 242.406,9 254.270,5 118.919,1

1) Oil and Gas 125.752,0 152.733,2 193.490,6 205.823,5 203.629,4 216.876,3 224.263,1 81.364,9 a) Oil 90.056,0 111.814,9 141.303,5 144.717,1 135.329,2 141.058,8 170.342,3 61.584,0 b) Gas 35.696,0 40.918,3 52.187,1 61.106,4 68.300,2 75.817,5 53.920,8 19.780,9

2) Non Oil and Gas 13.207,3 16.092,2 20.332,8 20.020,5 22.776,8 25.530,6 30.007,4 37.554,3

a) Mineral and Coal Mining*) 10.369,4 12.646,8 16.369,8 15.877,4 18.620,5 20.858,9 24.599,7 31.678,5 b) Forestry 2.345,4 3.009,7 3.216,5 3.188,3 3.060,4 3.699,7 4.574,0 4.713,3 c) Fisheries 92,0 92,0 183,8 215,8 229,4 216,4 250,0 578,8 d) Geothermal 400,4 343,8 562,7 739,0 866,6 755,5 583,7 583,7

b. Profit Transfer from SOEs 26.049,5 30.096,9 28.184,0 30.798,0 34.025,6 40.314,5 44.000,0 36.956,5 c. Other Non Tax Revenues 53.796,1 59.428,6 69.360,5 73.458,5 69.671,9 86.219,4 89.823,7 90.109,6 d. Revenue from BLU 8.369,5 10.590,8 20.104,0 21.704,3 24.648,2 29.599,6 22.246,8 23.090,2

II.Grants 1.666,6 3.023,0 5.253,9 5.786,7 6.832,5 4.712,8 3.256,3 3.311,9

848.763,2 995.271,5 1.210.599,7 1.338.109,6 1.438.891,1 1.550.100,4 1.793.588,9 1.761.642,8

*) Sebelum tahun 2013 disebut pendapatan pertambangan umum

Total

TABLE 3Revenues and Grants, 2009 – 2015

(billion rupiah)

Uraian

2015

Appendix II

Budget 2010 - 2015


evised Budget 2015

4

2009 2010 2011 2012 2013 2014

LKPP LKPP LKPP LKPP LKPP LKPP Unaudited

APBN APBNP

01 GENERAL PUBLIC SERVICES *) 417.771,6 472.469,0 571.283,2 647.998,6 705.724,2 797.124,7 891.768,4 695.286,3 02 DEFENSE 13.145,7 17.080,5 51.121,0 61.226,9 87.510,1 82.145,0 96.823,9 102.278,6 03 PUBLIC ORDER AND SAFETY 7.753,9 13.835,4 21.691,2 29.096,5 36.120,4 34.805,8 46.137,9 54.681,0 04 ECONOMIC AFFAIRS 58.845,1 52.178,4 87.246,2 105.574,5 108.082,6 95.952,1 143.525,7 216.290,6 05 ENVIRONMENTAL PROTECTION 10.703,0 6.549,6 8.615,1 8.814,1 10.590,4 9.145,7 10.679,5 11.728,1 06 HOUSING AND COMMUNITIES AMMENITIES 14.648,5 20.053,2 22.937,8 26.440,9 33.790,0 26.126,9 20.465,8 25.587,2 07 HEALTH 15.743,1 18.793,0 14.088,8 15.181,7 17.577,0 10.850,0 21.113,2 24.208,5 08 TOURISM AND CREATIVE ECONOMY **) 1.406,2 1.408,7 3.553,5 2.516,3 1.818,8 1.469,0 1.926,2 3.765,5 09 RELIGION 773,5 878,8 1.424,7 3.419,7 3.872,8 4.009,6 5.289,6 6.920,5 10 EDUCATION 84.919,5 90.818,3 97.854,0 105.207,5 114.969,1 122.367,6 146.392,8 156.186,9 11 SOCIAL PROTECTION 3.102,3 3.341,6 3.906,4 5.081,5 17.107,5 12.993,5 8.319,5 22.615,8

628.812,4 697.406,4 883.721,9 1.010.558,2 1.137.162,9 1.196.989,8 1.392.442,3 1.319.549,0 *) Including unclassified functions (TA 2010 Rp0,9 triliun; TA 2011 Rp62,3 triliun; TA 2012 Rp0,3 triliun; TA 2013 Rp0,1 triliun)**) Changing nomenclature of tourism and creative economy function in 2014

TABLE 4

2015

T O T A L

KODE FUNGSI

(billion rupiah)CENTRAL GOVERNMENT EXPENDITURE BASED ON FUNCTIONS, 2009-2015

5Financial N

ote and Revised B

udget 2015

Appendix II

Budget 2010 - 2015

2009 2010 2011 2012 2013 2014 2015

LKPP LKPP LKPP LKPP LKPP LKPP Unaudited APBN

1. 001 MAJELIS PERMUSYAWARATAN RAKYAT 211,8 204,8 320,6 522,2 649,4 639,4 612,3

2. 002 DEWAN PERWAKILAN RAKYAT 1.538,7 1.792,4 1.742,9 2.016,4 2.335,3 2.306,4 3.556,7

3. 004 BADAN PEMERIKSA KEUANGAN 1.590,9 1.974,2 2.087,3 2.248,3 2.385,9 2.306,5 2.915,5

4. 005 MAHKAMAH AGUNG 3.950,5 3.895,8 4.734,9 4.798,1 6.647,1 6.972,8 7.037,9

5. 006 KEJAKSAAN RI 1.602,1 2.636,7 3.311,3 3.524,8 3.860,8 3.319,3 4.208,9

6. 007 KEMENTERIAN SEKRETARIAT NEGARA 1.342,0 1.530,4 1.611,0 1.622,7 2.673,0 2.094,2 2.054,8

7. 010 KEMENTERIAN DALAM NEGERI 8.315,1 12.110,8 13.386,3 16.767,2 14.448,2 12.717,3 7.240,9

8. 011 KEMENTERIAN LUAR NEGERI 4.106,8 3.751,9 4.005,4 4.117,8 5.094,8 5.335,9 5.533,9

9. 012 KEMENTERIAN PERTAHANAN 34.332,5 42.391,6 51.201,6 61.305,3 87.706,7 82.217,3 96.935,7

10. 013 KEMENTERIAN HUKUM DAN HAM 3.903,9 4.832,1 6.374,8 6.227,2 6.996,2 7.163,1 9.688,7

11. 015 KEMENTERIAN KEUANGAN 11.759,2 12.955,0 14.852,9 15.709,8 16.678,3 18.116,0 18.727,2

12. 018 KEMENTERIAN PERTANIAN 7.676,5 8.016,1 15.986,0 18.247,1 15.931,3 13.204,4 15.879,3

13. 019 KEMENTERIAN PERINDUSTRIAN 1.444,9 1.492,7 1.958,0 2.693,2 2.797,7 2.431,5 2.743,3

14. 020 KEMENTERIAN ENERGI DAN SUMBER DAYA MINERAL 6.577,2 5.543,6 9.017,5 9.887,0 11.186,1 7.353,5 10.023,5

15. 022 KEMENTERIAN PERHUBUNGAN 15.557,3 15.562,1 20.110,0 30.083,6 31.718,3 28.530,9 44.933,9

16. 023 KEMENTERIAN PENDIDIKAN DAN KEBUDAYAAN 59.558,6 59.347,9 61.060,5 67.585,4 71.829,8 76.234,8 88.309,1

17. 024 KEMENTERIAN KESEHATAN 18.001,5 22.428,3 26.871,3 30.575,6 35.360,5 47.406,8 47.758,8

18. 025 KEMENTERIAN AGAMA 24.957,6 28.008,1 33.208,3 36.896,8 41.887,4 45.707,2 56.440,0

19. 026 KEMENTERIAN TENAGA KERJA DAN TRANSMIGRASI 2.837,8 2.763,9 3.682,1 3.784,0 4.574,9 3.674,1 5.251,9

20. 027 KEMENTERIAN SOSIAL 3.255,1 3.470,9 3.957,4 4.422,5 15.822,0 13.135,9 8.079,4

21. 029 KEMENTERIAN KEHUTANAN 2.110,2 3.290,9 4.756,7 5.230,7 6.113,0 4.678,9 5.643,2

TABLE 5LINE MINISTRIES EXPENDITURES, 2009-2015 (1)

(billion Rupiah)

No. CODE LINE MINISTRIES

Appendix II

Budget 2010 - 2015


evised Budget 2015

6

2009 2010 2011 2012 2013 2014 2015


22. 032 KEMENTERIAN KELAUTAN DAN PERIKANAN 3.205,6 3.139,5 5.176,0 5.954,5 6.569,7 5.742,7 6.726,0

23. 033 KEMENTERIAN PEKERJAAN UMUM 40.082,7 32.746,9 51.305,9 67.976,4 80.330,6 71.387,0 81.338,2

24. 034 KEMENKO BIDANG POLITIK, HUKUM, DAN KEAMANAN 176,2 194,3 467,5 360,0 446,3 343,2 449,6

25. 035 KEMENKO BIDANG PEREKONOMIAN 77,2 96,9 233,5 191,7 206,2 204,6 305,9

26. 036 KEMENKO BIDANG KESEJAHTERAAN RAKYAT 88,1 84,4 211,3 220,7 272,0 172,2 295,8

27. 040 KEMENTERIAN PARIWISATA DAN EKONOMI KREATIF 1.049,4 1.590,0 1.906,0 2.227,2 1.620,2 1.275,5 1.715,9

28. 041 KEMENTERIAN BADAN USAHA MILIK NEGARA 129,0 92,8 110,0 93,4 109,2 97,4 133,8

29. 042 KEMENTERIAN RISET DAN TEKNOLOGI 408,0 620,0 630,2 649,5 800,5 455,2 747,5

30. 043 KEMENTERIAN LINGKUNGAN HIDUP 359,5 404,4 855,7 675,4 938,3 837,9 825,0

31. 044 KEMENTERIAN KOPERASI DAN UKM 744,3 729,6 938,2 1.230,1 1.607,2 1.248,9 1.453,9

32. 047 KEMENTERIAN PEMBERDAYAAN PEREMPUAN DAN PA 111,7 165,1 156,1 155,2 224,5 184,7 217,7

33. 048 KEMENTERIAN PENDAYAGUNAAN APARATUR NEGARA DAN RB 85,8 83,4 93,4 109,9 162,1 134,8 195,9

34. 050 BADAN INTELIJEN NEGARA 968,7 963,3 1.297,8 1.476,2 1.497,5 1.845,5 2.416,6

35. 051 LEMBAGA SANDI NEGARA 480,6 606,1 719,2 1.732,8 1.597,2 1.176,7 1.456,6

36. 052 DEWAN KETAHANAN NASIONAL 24,4 29,0 36,3 30,0 37,2 38,1 44,3

37. 054 BADAN PUSAT STATISTIK 1.513,4 4.947,7 2.482,2 2.654,7 3.968,5 3.000,7 3.930,8

38. 055 KEMENTERIAN PPN/BAPPENAS 314,9 384,6 542,1 662,1 1.104,7 1.000,0 1.088,1

39. 056 BADAN PERTANAHAN NASIONAL 2.121,2 2.294,5 2.657,9 2.985,9 3.677,2 3.804,9 4.576,3

40. 057 PERPUSTAKAAN NASIONAL 312,6 396,9 401,9 324,1 458,8 332,4 473,5

41. 059 KEMENTERIAN KOMUNIKASI DAN INFORMATIKA 1.360,0 2.199,5 2.642,1 2.690,6 3.235,6 2.120,0 4.859,8

42. 060 KEPOLISIAN NEGARA REPUBLIK INDONESIA 25.633,3 26.783,0 34.394,6 39.508,0 43.394,5 43.901,2 51.594,5


(billion Rupiah)


7Financial N

ote and Revised B

udget 2015

Appendix II

Budget 2010 - 2015

2009 2010 2011 2012 2013 2014 2015


43. 063 BADAN PENGAWAS OBAT DAN MAKANAN 530,3 603,5 764,8 1.108,1 1.117,3 879,8 1.221,6

44. 064 LEMBAGA KETAHANAN NASIONAL 115,1 157,8 207,9 227,6 209,1 276,5 278,9

45. 065 BADAN KOORDINASI PENANAMAN MODAL 311,6 378,3 456,6 568,5 607,2 527,1 635,9

46. 066 BADAN NARKOTIKA NASIONAL 239,6 345,1 770,4 859,0 1.049,7 702,9 903,2

47. 067 KEMENTERIAN PEMBANGUNAN DAERAH TERTINGGAL 931,2 1.024,5 1.013,4 1.149,9 2.468,0 2.059,6 1.386,8

48. 068 BADAN KEPENDUDUKAN DAN KELUARGA BERENCANA NASIONAL 1.148,4 1.332,8 2.353,3 2.213,7 2.411,7 2.112,8 3.294,7

49. 074 KOMISI NASIONAL HAK AZASI MANUSIA 46,2 52,7 55,5 57,9 74,3 72,2 72,2

50. 075 BADAN METEOROLOGI, KLIMATOLOGI DAN GEOFISIKA 772,8 885,5 1.108,6 1.135,0 1.437,4 1.485,1 1.763,5

51. 076 KOMISI PEMILIHAN UMUM 567,1 759,0 761,7 1.112,9 5.904,2 11.049,9 1.134,2

52. 077 MAHKAMAH KONSTITUSI 162,6 169,7 237,2 220,3 213,0 207,4 214,5

53. 078 PUSAT PELAPORAN DAN ANALISIS TRANSAKSI KEUANGAN 32,9 63,7 47,6 56,1 73,4 70,7 76,5

54. 079 LEMBAGA ILMU PENGETAHUAN INDONESIA 455,0 492,9 663,3 975,0 1.034,9 973,5 1.147,6

55. 080 BADAN TENAGA NUKLIR NASIONAL 365,4 388,4 571,9 730,2 710,1 616,6 819,9

56. 081 BADAN PENGKAJIAN DAN PENERAPAN TEKNOLOGI 515,5 677,4 1.001,4 896,0 1.167,0 729,3 858,4

57. 082 LEMBAGA PENERBANGAN DAN ANTARIKSA NASIONAL 198,7 222,5 403,3 455,1 464,7 690,0 673,1

58. 083 BADAN INFORMASI GEOSPASIAL 223,3 308,6 436,5 493,2 533,6 641,2 721,0

59. 084 BADAN STANDARDISASI NASIONAL 51,7 102,8 75,0 72,3 89,0 93,2 164,8

60. 085 BADAN PENGAWAS TENAGA NUKLIR 48,2 53,5 69,3 71,1 131,8 99,2 137,1

61. 086 LEMBAGA ADMINISTRASI NEGARA 178,6 188,7 250,4 239,7 245,6 210,4 269,8

62. 087 ARSIP NASIONAL REPUBLIK INDONESIA 102,1 104,3 140,8 122,2 153,6 102,6 172,1

63. 088 BADAN KEPEGAWAIAN NEGARA 357,1 388,0 450,6 489,7 579,8 459,5 614,1

64. 089 BADAN PENGAWASAN KEUANGAN DAN PEMBANGUNAN 540,1 637,8 740,0 1.002,1 1.067,2 1.209,3 1.528,4


(billion Rupiah)


Appendix II

Budget 2010 - 2015


evised Budget 2015

8

2009 2010 2011 2012 2013 2014 2015


65. 090 KEMENTERIAN PERDAGANGAN 1.455,0 1.258,3 2.371,9 2.176,3 2.702,5 1.778,9 2.495,3

66. 091 KEMENTERIAN PERUMAHAN RAKYAT 1.277,5 914,9 2.362,2 3.999,9 4.297,3 3.494,0 4.621,5

67. 092 KEMENTERIAN PEMUDA DAN OLAH RAGA 829,1 2.393,1 4.025,9 954,7 1.648,4 1.546,9 1.781,2

68. 093 KOMISI PEMBERANTASAN KORUPSI 228,6 268,0 300,2 335,6 466,7 558,5 898,9

69. 095 DEWAN PERWAKILAN DAERAH 319,2 368,7 553,1 517,8 524,8 599,2 763,9

70. 100 KOMISI YUDISIAL RI 89,2 54,2 68,6 75,7 86,5 76,2 119,6

71. 103 BADAN NASIONAL PENANGGULANGAN BENCANA 104,4 266,3 1.232,9 1.342,9 2.969,3 2.666,4 1.681,6

72. 104BADAN NASIONAL PENEMPATAN DAN PERLINDUNGAN TENAGA KERJA INDONESIA

220,4 226,1 375,0 247,5 372,8 350,8 393,3

73. 105 BADAN PENANGGULANGAN LUMPUR SIDOARJO 705,8 636,8 571,9 1.066,2 1.801,6 288,1 843,2

74. 106 LEMBAGA KEBIJAKAN PENGADAAN BARANG/JASA PEMERINTAH - 70,7 171,5 149,6 187,8 137,4 158,4

75. 107 BADAN SAR NASIONAL - 512,6 1.053,8 970,2 1.846,4 1.919,0 2.420,0

76. 108 KOMISI PENGAWAS PERSAINGAN USAHA - 60,9 68,1 98,1 119,0 80,6 100,6

77. 109 BADAN PENGEMBANGAN WILAYAH SURAMADU - - 69,2 100,0 90,8 251,8 195,5

78. 110 OMBUDSMAN REPUBLIK INDONESIA - - 15,5 52,6 65,1 58,4 66,3

79. 111 BADAN NASIONAL PENGELOLA PERBATASAN - - 312,2 139,1 205,0 127,6 210,6

80. 112BADAN PENGUSAHAAN KAWASAN PERDAGANGAN BEBAS DAN PELABUHAN BEBAS BATAM

- - - 704,3 846,9 1.059,2 1.097,2

81. 113 BADAN NASIONAL PENANGGULANGAN TERORISME - - - 89,6 290,7 246,3 311,8

82. 114 KEMENTERIAN SEKRETARIAT KABINET - - - 137,7 160,4 149,2 183,1

83. 115 BADAN PENGAWAS PEMILU - - - 124,0 1.687,5 3.249,1 457,0

84. 116 LEMBAGA PENYIARAN PUBLIK RADIO REPUBLIK INDONESIA - - - 676,5 863,4 808,6 889,0

85. 117 LEMBAGA PENYIARAN PUBLIK TELEVISI REPUBLIK INDONESIA - - - 716,7 776,7 724,9 866,6

86. 118BADAN PENGUSAHAAN KAWASAN PERDAGANGAN BEBAS DAN PELABUHAN BEBAS SABANG

- - - 341,5 233,3 297,7 246,5

306.999,5 332.920,2 417.626,2 489.445,9 582.940,2 570.587,0 647.309,9

Sumber: Kementerian Keuangan

JUMLAH


(billion Rupiah)


9Financial N

ote and Revised B

udget 2015

Appendix II

Budget 2010 - 2015

No.

LIN

E M

INIST

RIE

S A

PB

N2015

AP

BN

P2015

1M

AJELIS PER

MU

SYA

WA

RA

TA

N R

AK

YA

T 612,3

977,3

2D

EWA

N PER

WA

KILA

N R

AK

YA

T 3.556,7

5.191,7

3BA

DA

N PEM

ERIK

SA K

EUA

NG

AN

2.915,5 3.015,5

4M

AH

KA

MA

H A

GU

NG

7.037,9 8.575,7

5K

EJAK

SAA

N R

EPUBLIK

IND

ON

ESIA 4.208,9

4.735,2

6K

EMEN

TER

IAN

SEKR

ETA

RIA

T N

EGA

RA

2.054,8 2.083,9

7K

EMEN

TER

IAN

DA

LAM

NEG

ERI

3.708,4 6.110,7

8K

EMEN

TER

IAN

LUA

R N

EGER

I 5.533,9

6.251,8

9K

EMEN

TER

IAN

PERT

AH

AN

AN

96.935,7 102.283,3

10K

EMEN

TER

IAN

HU

KU

M D

AN

HA

K A

SASI M

AN

USIA

RI

9.688,7 11.178,6

11K

EMEN

TER

IAN

KEU

AN

GA

N 18.727,2

25.686,3

12K

EMEN

TER

IAN

PERT

AN

IAN

15.879,3 32.798,0

13K

EMEN

TER

IAN

PERIN

DU

STR

IAN

2.743,3 4.548,3

14K

EMEN

TER

IAN

ENER

GI D

AN

SUM

BER D

AY

A M

INER

AL

10.023,5 15.070,5

15K

EMEN

TER

IAN

PERH

UBU

NG

AN

44.933,9 64.954,1

16K

EMEN

TER

IAN

PEND

IDIK

AN

DA

N K

EBUD

AY

AA

N

46.801,4 53.278,5

17K

EMEN

TER

IAN

KESEH

AT

AN

47.758,8 51.277,3

18K

EMEN

TER

IAN

AG

AM

A 56.440,0

60.284,4

19K

EMEN

TER

IAN

KET

ENA

GA

KER

JAA

N 3.718,1

4.223,1

20K

EMEN

TER

IAN

SOSIA

L 8.079,4

22.421,8

21K

EMEN

TER

IAN

LING

KU

NG

AN

HID

UP D

AN

KEH

UT

AN

AN

*) 6.468,2

6.667,8

TA

BL

E 6

LIN

E M

INIS

TR

IES

EX

PE

ND

ITU

RE

S, A

PB

NP

2015

BA

SE

D O

N N

EW

NO

ME

NC

LA

TU

RE

(1)(B

illion R

up

iah)

Appendix II

Budget 2010 - 2015


evised Budget 2015

10 No.

LIN

E M

INIST

RIE

S A

PBN

2015 A

PBN

P2015

22K

EMEN

TER

IAN

KELA

UT

AN

DA

N PER

IKA

NA

N 6.726,0

10.597,8

23K

EMEN

TER

IAN

PEKER

JAA

N U

MU

M D

AN

PERU

MA

HA

N R

AK

YA

T *)

84.912,2 118.546,1

24K

EMEN

TER

IAN

KO

OR

DIN

AT

OR

BIDA

NG

POLIT

IK, H

UK

UM

DA

N

KEA

MA

NA

N 449,6

519,6

25K

EMEN

TER

IAN

KO

OR

DIN

AT

OR

BIDA

NG

PEREK

ON

OM

IAN

305,9 326,7

26K

EMEN

TER

IAN

KO

OR

DIN

AT

OR

BIDA

NG

PEMBA

NG

UN

AN

MA

NU

SIA

DA

N K

EBUD

AY

AA

N *)

295,8 444,8

27K

EMEN

TER

IAN

PAR

IWISA

TA

*) 1.715,9

2.415,8

28K

EMEN

TER

IAN

BAD

AN

USA

HA

MILIK

NEG

AR

A 133,8

148,1

29K

EMEN

TER

IAN

RIST

EK D

AN

PEND

IDIK

AN

TIN

GG

I *) 42.255,3

43.570,3

30K

EMEN

TER

IAN

KO

PERA

SI DA

N U

SAH

A K

ECIL DA

N M

ENEN

GA

H 1.453,9

1.633,1

31K

EMEN

TER

IAN

PEMBER

DA

YA

AN

PEREM

PUA

N D

AN

PERLIN

DU

NG

AN

A

NA

K 217,7

217,7

32K

EMEN

TER

IAN

PEND

AY

AG

UN

AA

N A

PAR

AT

UR

NEG

AR

A D

AN

R

EFOR

MA

SI BIRO

KR

ASI

195,9 195,9

33BA

DA

N IN

TELIJEN

NEG

AR

A 2.416,6

2.616,6

34LEM

BAG

A SA

ND

I NEG

AR

A 1.456,6

1.656,6

35D

EWA

N K

ETA

HA

NA

N N

ASIO

NA

L 44,3

144,3

36BA

DA

N PU

SAT

STA

TIST

IK 3.930,8

5.030,8

37K

EMEN

TER

IAN

PEREN

CAN

AA

N PEM

BAN

GU

NA

N N

ASIO

NA

L/BAD

AN

PER

ENCA

NA

AN

PEMBA

NG

UN

AN

NA

SION

AL

1.088,1 1.088,1

38K

EMEN

TER

IAN

AG

RA

RIA

DA

N T

AT

A R

UA

NG

/BPN 5.623,9

5.623,9

39PER

PUST

AK

AA

N N

ASIO

NA

L REPU

BLIK IN

DO

NESIA

473,5 473,5

40K

EMEN

TER

IAN

KO

MU

NIK

ASI D

AN

INFO

RM

AT

IKA

4.859,8 4.929,8

41K

EPOLISIA

N N

EGA

RA

REPU

BLIK IN

DO

NESIA

51.594,5 57.100,4

TAB

LE 6

LINE

MIN

ISTRIE

S EX

PE

ND

ITUR

ES, A

PB

NP

2015

BA

SED

ON

NE

W N

OM

EN

CLA

TUR

E (2)

(Billion

Rupiah

)

11Financial N

ote and Revised B

udget 2015

Appendix II

Budget 2010 - 2015

No.

LIN

E M

INIST

RIE

S A

PB

N2015

AP

BN

P2015

42BA

DA

N PEN

GA

WA

S OBA

T D

AN

MA

KA

NA

N 1.221,6

1.221,6

43LEM

BAG

A K

ETA

HA

NA

N N

ASIO

NA

L 278,9

378,9

44BA

DA

N K

OO

RD

INA

SI PENA

NA

MA

N M

OD

AL

635,9 635,9

45BA

DA

N N

AR

KO

TIK

A N

ASIO

NA

L 903,2

1.403,2

46K

EMEN

TER

IAN

DESA

, PDT

DA

N T

RA

NSM

IGR

ASI

6.453,0 9.028,0

47BA

DA

N K

EPEND

UD

UK

AN

DA

N K

ELUA

RG

A BER

ENCA

NA

NA

SION

AL

3.294,7 3.294,7

48K

OM

ISI NA

SION

AL H

AK

ASA

SI MA

NU

SIA 72,2

80,5

49BA

DA

N M

ETEO

RO

LOG

I, KLIM

AT

OLO

GI D

AN

GEO

FISIKA

1.763,5 1.813,5

50K

OM

ISI PEMILIH

AN

UM

UM

1.134,2 1.615,8

51M

AH

KA

MA

H K

ON

STIT

USI R

I 214,5

214,5

52PU

SAT

PELAPO

RA

N D

AN

AN

ALISIS T

RA

NSA

KSI K

EUA

NG

AN

76,5 76,5

53LEM

BAG

A ILM

U PEN

GET

AH

UA

N IN

DO

NESIA

1.147,6 1.291,1

54BA

DA

N T

ENA

GA

NU

KLIR

NA

SION

AL

819,9 854,9

55BA

DA

N PEN

GK

AJIA

N D

AN

PENER

APA

N T

EKN

OLO

GI

858,4 956,2

56LEM

BAG

A PEN

ERBA

NG

AN

DA

N A

NT

AR

IKSA

NA

SION

AL

673,1 673,1

57BA

DA

N IN

FOR

MA

SI GEO

SPASIA

L 721,0

721,0

58BA

DA

N ST

AN

DA

RISA

SI NA

SION

AL

164,8 164,8

59BA

DA

N PEN

GA

WA

S TEN

AG

A N

UK

LIR 137,1

137,1

60LEM

BAG

A A

DM

INIST

RA

SI NEG

AR

A 269,8

269,8

61A

RSIP N

ASIO

NA

L REPU

BLIK IN

DO

NESIA

172,1 172,1

62BA

DA

N K

EPEGA

WA

IAN

NEG

AR

A 614,1

614,1

63BA

DA

N PEN

GA

WA

SAN

KEU

AN

GA

N D

AN

PEMBA

NG

UN

AN

1.528,4 1.667,4

TA

BL

E 6

LIN

E M

INIS

TR

IES

EX

PE

ND

ITU

RE

S, A

PB

NP

2015

BA

SE

D O

N N

EW

NO

ME

NC

LA

TU

RE

(3)(B

illion R

up

iah)

Appendix II

Budget 2010 - 2015


evised Budget 2015

12

No.

LIN

E M

INIST

RIE

S A

PB

N2015

AP

BN

P2015

64K

EMEN

TER

IAN

PERD

AG

AN

GA

N 2.495,3

3.532,1

65K

EMEN

TER

IAN

PEMU

DA

DA

N O

LAH

RA

GA

1.781,2 3.034,1

66K

OM

ISI PEMBER

AN

TA

SAN

KO

RU

PSI 898,9

898,9

67D

EWA

N PER

WA

KILA

N D

AER

AH

(DPD

) 763,9

1.138,9

68K

OM

ISI YU

DISIA

L RI

119,6 128,3

69BA

DA

N N

ASIO

NA

L PENA

NG

GU

LAN

GA

N BEN

CAN

A 1.681,6

1.705,8

70BA

DA

N N

ASIO

NA

L PENEM

PAT

AN

DA

N PER

LIND

UN

GA

N T

ENA

GA

K

ERJA

IND

ON

ESIA 393,3

393,3

71BA

DA

N PEN

AN

GG

ULA

NG

AN

LUM

PUR

SIDO

AR

JO (BPLS)

843,2 843,2

72LEM

BAG

A K

EBIJAK

AN

PENG

AD

AA

N BA

RA

NG

/JASA

PEMER

INT

AH

158,4 158,4

73BA

DA

N SA

R N

ASIO

NA

L 2.420,0

2.620,0

74K

OM

ISI PENG

AW

AS PER

SAIN

GA

N U

SAH

A 100,6

100,6

75BA

DA

N PEN

GEM

BAN

GA

N W

ILAY

AH

SUR

AM

AD

U 195,5

295,5

76O

MBU

DSM

AN

REPU

BLIK IN

DO

NESIA

66,3 66,3

77BA

DA

N N

ASIO

NA

L PENG

ELOLA

PERBA

TA

SAN

210,6 210,6

78BA

DA

N PEN

GU

SAH

AA

N K

AW

ASA

N PER

DA

GA

NG

AN

BEBAS D

AN

PELA

BUH

AN

BEBAS BA

TA

M 1.097,2

1.097,2

79BA

DA

N N

ASIO

NA

L PENA

NG

GU

LAN

GA

N T

ERO

RISM

E 311,8

311,8

80SEK

RET

AR

IAT

KA

BINET

183,1 183,1

81BA

DA

N PEN

GA

WA

S PEMILIH

AN

UM

UM

457,0 457,0

82LEM

BAG

A PEN

YIA

RA

N PU

BLIK R

AD

IO R

EPUBLIK

IND

ON

ESIA 889,0

889,0

83LEM

BAG

A PEN

YIA

RA

N PU

BLIK T

ELEVISI R

EPUBLIK

IND

ON

ESIA 866,6

866,6

84BA

DA

N PEN

GU

SAH

AA

N K

AW

ASA

N PER

DA

GA

NG

AN

BEBAS &

PELA

BUH

AN

BEBAS SA

BAN

G 246,5

246,5

85K

EMEN

TER

IAN

KO

OR

DIN

AT

OR

BIDA

NG

KEM

AR

ITIM

AN

*) 125,0

647.309,9 795.480,4

*) Line Ministries nom

enclature is based on Presidential Regulation N

umber 165/2014

TA

BL

E 6

LIN

E M

INIS

TR

IES

EX

PE

ND

ITU

RE

S, A

PB

NP

2015

BA

SE

D O

N N

EW

NO

ME

NC

LA

TU

RE

(4)

(Billion

Ru

piah

)

JUM

LA

H

13Financial N

ote and Revised B

udget 2015

Appendix II

Budget 2010 - 2015

2009 2010 2011 2012 2013 2014


I. Transfer to Region 308.585,2 344.727,6 411.324,8 480.645,1 513.260,4 573.702,9 637.975,1 643.834,5 A. Balanced Fund 287.251,5 316.711,3 347.246,2 411.293,1 430.354,7 477.052,8 516.401,0 521.760,5

1. Revenue Sharing Fund 76.129,9 92.183,5 96.909,0 111.537,2 88.463,1 103.939,0 127.692,5 110.052,0

a. Tax 40.334,2 47.017,8 42.934,0 48.936,9 46.006,5 41.937,6 50.568,7 54.216,6

- Income Tax 10.219,1 10.931,5 13.237,3 19.378,3 19.091,5 21.021,7 23.141,4 26.412,7

- Land and Building Tax 23.073,9 27.146,9 28.281,5 27.597,0 24.763,5 18.694,2 25.016,1 25.021,6

- Duties on Land and Building 5.976,2 7.737,2 6,7 238,8 - - - -

- Excises 1.065,1 1.202,1 1.408,4 1.722,8 2.151,5 2.221,7 2.411,1 2.782,4

b. Natural Resources 35.795,8 45.165,7 53.975,0 62.600,3 42.456,6 62.001,3 77.123,8 55.835,4

- Oil and Gas 26.128,7 35.196,4 37.306,3 47.397,5 29.330,0 42.909,5 51.820,6 24.550,3

- Mineral and Coal Mining 7.197,6 7.790,4 14.498,1 12.860,9 11.636,7 16.425,9 22.033,3 27.696,3

- Forestry 1.307,1 1.753,1 1.512,5 1.535,9 889,1 2.008,4 2.320,4 2.376,1

- Fisheries 69,3 120,0 138,1 179,8 149,8 190,4 231,2 494,2

- Geothermal 1.093,2 305,8 520,0 626,3 451,0 467,1 718,5 718,5

2. General Allocation Fund 186.414,1 203.571,5 225.533,7 273.814,4 311.139,3 341.219,3 352.887,8 352.887,8

3. Specific Allocation Fund 24.707,4 20.956,3 24.803,5 25.941,5 30.752,4 31.894,5 35.820,7 58.820,7

B. Special Autonomy Fund 9.526,6 9.099,6 10.421,3 11.952,6 13.445,6 16.148,8 16.615,5 17.115,5

C. Special Fund for DIY - - - - 115,7 419,1 547,5 547,5

D. Other Transfer *) 11.807,2 18.916,7 53.657,2 57.399,4 69.344,4 80.082,3 104.411,1 104.411,1

II. Rural Fund - - - - - - 9.066,2 20.766,2

308.585,2 344.727,6 411.324,8 480.645,1 513.260,4 573.702,9 647.041,3 664.600,7

*) Before 2014 was called Adjustment Fund

TABLE 7TRANSFER TO REGION AND RURAL FUND, 2009 – 2015

(billion rupiah)

2015

Total

Appendix II

Budget 2010 - 2015


evised Budget 2015

14

2009 2010 2011 2012 2013 2014

A. Domestic Financing 128.133,1 96.118,5 148.748,1 198.622,5 243.199,7 261.235,8 269.709,7 242.515,0

I. Domestic Bank 41.056,8 22.189,3 48.927,9 62.703,1 34.174,1 5.000,3 4.467,5 4.785,4

a.l 1. SLA Principal Payment (RDI) 3.705,0 4.841,4 7.946,9 6.533,1 4.174,1 5.000,3 4.467,5 4.785,4

2. Forest Developent Account 621,0 - - - - - - -

3. KUN Account for Government Investment Credit Financing - - 661,9 - - - - -

4. SAL (Budget Surplus) 51.857,1 17.347,9 40.319,0 56.170,0 30.000,0 - - -

5. Other Financing (15.126,3) - - - - - - -

II. Domestic Non-Bank 87.076,3 73.929,2 99.820,1 135.919,4 209.025,7 256.235,5 265.242,2 237.729,6

1. Privatization - 2.098,7 425,0 138,3 56,7 3,6 - -

2. Asset Management 690,3 1.133,5 1.172,9 1.139,7 1.443,5 540,0 350,0 350,0

3. Government Bond (netto) 99.470,9 91.102,6 119.864,4 159.704,3 224.672,5 264.628,9 277.049,8 297.698,4

4. Domestic Loans - 393,6 619,4 799,7 474,5 939,6 1.621,2 1.690,6

5. Government Investment Fund (13.084,9) (12.299,1) (19.643,9) (18.862,6) (11.915,4) (8.912,5) (12.647,1) (58.844,1)

a. Investment Return - - - - - - 778,3 19.134,9

b. Government Investment (500,0) (927,5) (1.550,0) (3.299,6) - - - -

c. PMN (Government Participation) (11.674,0) (6.038,6) (9.295,8) (8.519,5) (3.997,1) (8.912,5) (7.319,2) (70.372,8)

d. Revolving Fund (911,0) (5.333,0) (8.798,1) (7.043,4) (3.335,8) - (6.106,3) (6.106,3)

e. Investment Financing for PT Inalum takeover - - - - (4.582,6) - - -

f. Investment Financing to Establish Asset Management BLU - - - - - - - (1.500,0)

6. Mandatory Guarantee - - - - (706,0) (964,1) (1.131,6) (843,5)

7. Loan to PT PLN - (7.500,0) - - - - - -

8. National Education Development Fund (DPPN) - (1.000,0) (2.617,7) (7.000,0) (5.000,0) - - -

9. Contigency Fund for PT Minarak Lapindo Jaya - - - - - - - (781,7)

10. Financing Reserve for BPJS Kesehatan for DJS Kesehatan Program - - - - - - - (1.540,0)

B. Foreign Financing (netto) (15.549,8) (4.566,5) (17.799,2) (23.464,4) (5.805,2) (16.211,3) (23.815,0) (20.008,1)

I. Foreign Loan Drawing (bruto) 58.662,0 54.852,4 33.747,2 31.403,5 55.279,8 47.982,0 47.037,1 48.647,0

1. Program Loan 28.937,7 28.974,6 15.266,1 15.003,5 18.426,4 17.777,0 7.140,0 7.500,0

2. Project Loan 29.724,3 25.877,8 18.481,0 16.400,0 36.853,4 30.205,0 39.897,1 41.147,0

II. Subsidiary Loan (6.180,7) (8.786,4) (4.223,8) (3.753,0) (3.880,6) (1.827,2) (4.319,4) (4.471,9)

III. Principal Payment of Foreign Loan (68.031,1) (50.632,5) (47.322,5) (51.114,8) (57.204,4) (62.366,1) (66.532,8) (64.183,2)

112.583,3 91.552,0 130.948,9 175.158,2 237.394,6 245.024,4 245.894,7 222.506,9

TABLE 8BUDGET FINANCING, 2009–2015

(billion rupiah)

LKPP LKPP LKPP LKPP LKPP

2015

Total


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