A postulated growing deficit in the Provincial Budget is compelling the government to consider curtailing spending by reducing expenditures in several areas.
As reported by Radarbali.com, I Made Suardana, a member of the Golkar Party, on 17 July 2023, publicly revealed a current budget dilemma during an open session of the Provincial House of Representatives (DPRD-Bali) via the contents of a Circular Memorandum from the Provincial Secretary (Surat Edaran Sekda Bali Nomor 5253/2023).
Referring to the Government memorandum, Suardana estimates a potential deficit based on the 2022 official audit of Rp. 946.38 billion, plus shortfalls in forward payments for 2023 amounting to Rp. 107.366 billion, equating to a total deficit of 1,053.73 billion.
Based on 2023 projected revenues pegged at Rp. 5,664.5 billion and projected expenditures of Rp. 7,522 billion, the total deficit may eventually equal Rp 1.857,8 billion, plus net payments of Rp. 65 billion. On a cumulative basis, the budget deficit may total Rp 1.922,8 billion.
Meanwhile, Bali Governor Wayan Koster sternly repudiates the view that the provincial budget deficit would reach Rp. 1.9 trillion – accusing those projecting such a high deficit level as lacking basic mathematic skills.
While the Governor acknowledges a budget deficit, he rejects that the final deficit will be as large as some are projecting.
The Governor’s figures are based on calculations that will only come to light in six months. The Governor also pointed out that rentals payable to the Province by the Indonesian Tourism Development Corporation (ITDC) for land in Nusa Dua amounting to Rp. 830 billion will be paid in August.
Governor Koster commented, “Targeted income totals Rp.6.9 trillion comprised of local income sources of Rp. 4.7 trillion, and funds transferred from the Central Government of Rp.2.1 trillion.
Provincial expenditures are set at Rp. 7.88 trillion with operational expenses of Rp. 4.5 trillion, capital expenditures of Rp. 1.4 trillion, and internal transfers to the municipality and regencies of Rp. 1.9 trillion. From provincial Income of Rp. 6.9 trillion, and provincial expenditures of Rp. 7.9 trillion, the resulting deficit comes to Rp. 1 trillion.”
The Governor’s staff acknowledges several months remain to recoup Rp. 2.6 trillion. If this is added to the current Income of Rp. 2.4 trillion, the total becomes Rp. 5 trillion, exceeding the target of Rp. 4.7 trillion. The Province’s largest source of revenue is from motor vehicle taxes and motor vehicle transfer fees. In addition, they also receive funds from the central government.
The Governor estimates that the worst-case scenario will see Rp. 4.6 to Rp. 4.7 trillion in total Income, not including promised Central Government transfers. If projected expenditures materialize to 90%, this will result in a deficit of between Rp. 300 to Rp. 700 billion. The Governor added: “It was an algebraic mistake. There is no way a deficit of Rp. 1 trillion, let alone Rp. 1.9 trillion.”
To increase Income and pay down the national economic recovery debt (PEN), Governor Koster has devised a scheme to utilize funds from the Bali Mandara Hospital Regional Public Service Agency (BLUD) and Bali Mandara Eye Hospital.
Provincial spending by the Province can also be streamlined.
Rental fees for land at Nusa Dua – ITDC have recently been renegotiated from Rp. 51 billion to Rp. 830 billion per year. The government hopes to receive this land rental fee in August.
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