Kemenkeu temporarily blocks budgets for ministries/agencies up to Rp50t, here’s why

Finance Ministry (Kemenkeu)
Finance Ministry (Kemenkeu) (IO/Septo Kun Wijaya)

Jakarta, IO – The Finance Ministry (Kemenkeu) has temporarily blocked Rp50.2 trillion worth of budgets of all ministries/agencies this year in line with the “automatic adjustment” policy which aims to encourage spending on priority needs.

“Unlike refocusing, automatic adjustment does not cut the budgets. They can still use it, it’s just that they need to prioritize programs that are deemed more important and strategic,” said Kemenkeu’s Budgeting Director General Isa Rachmatarwata, reported Katadata, Thursday (16/2).

Because they have to prioritize expenditures, allocations that are considered not urgent can be realized later. According to him, this effort was made to anticipate uncertainties, such as the Covid-19 pandemic. In his view, this scheme has two benefits. First, ministries/agencies can have better resilience if they are forced to revise the budget in the middle of the year. Secondly, it trains them to spend on prioritized expenditures.

“Basically, we urge them to choose which programs they think are of a higher priority, and block those that are of less priority so they can’t spend on them at the beginning of the year,” said Isa.

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Isa said a similar program had also been implemented by the government last year, where the budget was temporarily blocked and could only be used in the second semester. Isa said the results were positive because several ministries actually used the budget for other purposes that were different from the original plan. Last year, Kemenkeu temporarily blocked Rp39.7 trillion in the automatic adjustment scheme. (un)