FINANCE Minister Sri Mulyani ensures that the automatic adjustment policy or spending reserves will not interfere with the priority budgets of Ministries/Institutions (M/I).
“All the most important priority programs will continue. The reserved budget is a program fund that is considered not a priority,” said Sri Mulyani at the CNBC Economic Outlook 2023 event monitored online in Jakarta, Tuesday (02/29).
She explained that the M/I spending reserves that were temporarily blocked in the 2023 fiscal year spending ceiling aimed to deal with conditions of global economic uncertainty and geopolitical turmoil. The reserved funds amount to 5% of the fund allocation.
In the M/I spending reserve policy, each M/I provides the name of the program that is considered not a priority to the Ministry of Finance to reserve funds.
Sri Mulyani revealed that the average realization of ministries/institutions (M/I) spending until the end of the year was 94-95% and very rarely touched 100%, so that the 5% reserve of funds would not affect performance and could still achieve the development targets of each M/I.
Budget reserves are important to deal with various fluctuations and uncertainties that will still arise, for example during the COVID-19 pandemic where the state revenue and expenditure budget (APBN) has buffered and absorbed various shocks that arise.
When the pandemic hit, surprises to the economy came from various sides both from state revenues and expenditures.
“The state revenue and expenditure budget (APBN) dampens surprises because if we don’t have a strong APBN, surprises will make the economy go down very deep. The state budget absorbed an enormous shock at that time,” she concluded. [antaranews]