GOVT TO SEEK 2010 STATE BUDGET REVISION

Jakarta, Jan 12 (ANTARA) - The government will immediately submit an application for a 2010 budget revision to the House of Representatives (DPR) to maintain the effectiveness of all cabinet's priorities, Finance Minister Sri Mulyani Indrawati said.

"Macro-economic conditions have undergone significant changes since the 2010 budget was passed. To maintain the trust in and credibility of the national budget especially with regard to oil price and the rate of exchange it seems we need to make changes that would reflect the real situation," she said after a limited cabinet meeting here on Tuesday.

She said the fast change was needed to speed up the pace of the cabinet's activities which have always been hindered so far by budget revision after the first semester.

"So this is for the sake of promoting the effectiveness of the second Indonesian Unity Cabinet's performance and so that it will not be hindered by budget problems. Besides that the law also allows it," she said.

The minister said the process of discussion of the 2010 budget revision would be immediately done after all parties completed a number of changes in the budget posture for communicating with the DPR.

"The process with the DPR will be done immediately. After finalizing a number of changes we will communicate it with the DPR where legal and political processes will be done," she said.

Several macro-economic assumptions in the 2010 state budget will be changed such as the price of oil which after being set earlier at US$65 per barrel will be changed to US$80 per barrel while the rupiah exchange rate will be changed from Rp10,000 against the US dollar to Rp9,500.

The inflation rate, initially set at five percent, will be revised to 5.5 percent while the assumed rate of the three-month key interest rate from 6.5 percent to 6.8 percent.

With the changes, the budget for subsidy for energy such as fuel oils will rise by Rp28.1 trillion from Rp68 trillion to Rp96.1 trillion while for electricity by Rp15.4 trillion from Rp37.8 trillion to Rp53.2 trillion and rice as well as fertilizers from Rp51.3 trillion to Rp59.5 trillion.

The changes will be prioritized for overcoming electricity problems such as loans for state-electricity company PLN to purchase voltage regulators, improving detention centers and penitentiaries, sending athletes to the Sea Games, improving population administration system and increasing the allowance for soldiers assigned in the outermost and border regions.

"As for infrastructure an additional budget will be made to purchase land to speed up toll road development," she said.

With the changes the deficit in the 2010 budget will rise from Rp98 trillion or 1.8 percent of the Gross Domestic Product to Rp128.7 trillion or 2.2 percent of the GDP.

The additional finance in the revised budget will be taken from the 2009 budget remainder of Rp38 trillion, she said.

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