Senayan as a Role Model

Several public organizations propose a judicial review of the regulation on the DPRD budget, a regulation born out of DPRD members’ demand for welfare allowances and benefits.

A CROWD of a hundred people from various public organizations demonstrated in protest against Government Regulation (PP) No. 37/2006 at the Yogyakarta Regional House of Representatives (DPRD) building last Monday. The demonstrators carried banners bearing angry slogans such as “PP 37/2006 Robs the People’s Money.” The event marked the start of a protest rally that would be conducted in several cities. “Our aim is to abolish the regulation,” said Denny Indrayana, director of the Yogyakarta Anticorruption Study Center.

Over the last two weeks, the regulation on the Protocol and Finances of the DPRD leader and members has attracted criticism. The regulation deals with member salary and benefits. Two new issues have surfaced in connection with this regulation, namely, the allowance for intensive communication for the legislative members and the operational allowance for the council head and his deputy.

As part of their protest campaign, the Yogyakarta Public Objection Movement, the Jakarta-based Coalition for the Rejection of PP 37 and other groups are preparing a proposal for a judicial review by the Supreme Court. The Indonesian Forum on Budget Transparency (Fitra), which is a member of the Coalition for the Rejection of PP 37, considers the regulation to be inconsistent with the regulations on the State Budget. According to the regulations, a financial year starts on January 1 and ends on December 31 while PP 37 states that the communication and operational subsidies will be paid in January 2006.

The direct impact of this regulation will affect the district budget. According to the regulation, the highest amount for the communication subsidy is three times the salary of the legislative head. The operational subsidy for the legislative head and his deputy is six times higher than the salary. Fitra has calculated, assuming the salary of approximately 1500 DPRD members is Rp3 million each, the Regional Budget would have to reach around Rp1.4 trillion. “And that’s only for the back pay,” said Ucok Sky Khadafi, Investigation and Advocate Coordinator for Fitra.

According to Indrayana, the DPRD pushed for this regulation. The government has revised the regulation three times since 2000. Formerly, they had used PP No. 110/2000, which did not offer sufficient welfare coverage. Consequently, the DPRD members felt forced to manipulate the budget but as a result are being accused of corruption.

Data from the Association of Municipal DPRD Councils Nationwide (Adeksi) shows that 10 percent of DPRD members have been accused of corruption as a result of PP No. 110. Adeksi and the Association of Regency DPRD Councils Nationwide (Adkasi) as well as the Association of Provincial DPRD Councils Nationwide, have repeatedly called for changes in the regulation. A new regulation in 2004, No. 24 still did not satisfy critics because it did not offer sufficient housing and health benefits. PP No. 37 in 2005 did include subsidies for housing and health care.
Apparently, these allowances were still not enough and further regional legislation was created on matters of compensation, wages, incentives and other subsidies. “They felt they needed funds to accommodate the aspirations of the public,” said Daeng Muhammad Nasir, Executive Director-General of Regional Finances at the Department of Home Affairs. While talking to Tempo, he gave an example of the Jakarta Municipal Government issuing Regional Regulation No. 114 in 2005. This regulation dealt with the matter of incentive funds for the purpose of receiving guests, Rp1.5 million for council members and Rp2 million for the council head. In response, the Home Affairs Minister issued Circular Letter No. 188 on January 4, 2006 claiming the regulation was unacceptable and against the law.

Adeksi discussed the minister’s warning at a work session in January 2006 and asked for the memo to be withdrawn. “The letter may create legal ambiguity,” said Adeksi Chairman Soerjo Respationo, adding that his side did not wish to see a repeat of the fiasco of PP 110, which gave rise to corruption accusations.

Adeksi and Adkasi also met with the Home Affairs Minister in February 2006 to discuss the Circular letter, where they attempted to explain the need for a communication and operational allowance. “So that we may fulfill our duties toward our constituents,” said Respationo.

According to Daeng Muhammad Nasir, during the meeting, the members of the associations mentioned the benefits that their counterparts in the House of Representatives (DPR) were entitled to. A member of the DPR receives a communication allowance of Rp14.140 million and a head member receives Rp14.968 million. The operational allowance for the Speaker is Rp30 million and his deputy gets Rp22 million. “If the DPR members receive Rp14 million, the district council members should get Rp9 million and the municipal and regent heads Rp6 million,” said Nasir.

Denny Indrayana believes the pressure put on the government by the council associations is responsible for this new regulation, which permits the DPRD to give high allowances for communication and operational needs. Nasir does indeed admit there was considerable pressure. “During the discussions on the bill, there were a few members who voiced their disagreement but they were boycotted,” he said. After those meetings, the DPRD associations drafted the changes to the existing regulation and nine months later PP 37 was born.

Unfortunately, the regulation causes serious problems for the DPRD finances. According to Ucok Sky Khadafi, many district budgets will fall under a constant threat of deficit. He gave subdistrict Dairi, North Sumatra as an example, where the DPRD income was nearly identical to its expense budget of Rp6 billion. “This is utterly disproportional,” he added.

The government may try to revise the regulation at a later stage. Finance Minister Sri Mulyani Indrawati thinks the regional budgets will be burdened because the regulation uses the greatest possible figures for the stipend given to the DPRD members. “These amounts are indeed disproportionate,” said Mulyani. In order to avoid weighty budget problems, the government will attempt to revise the regulation and will soon issue guidelines for the payment of the allowances. The amounts DPRD members will receive must depend on the availability of funds in the district coffers.

The financial health of each DPRD will be categorized in three different economic classes, which will be determined by the district’s annual income. After the district’s expenses are subtracted from the state’s earnings, this will constitute the final amount of the DPRD’s income, which includes the State Budget, public allocation funds and state profits. Only districts that have a certain surplus of funds may distribute the maximum allowances to its council members. Provinces must have funds in excess of Rp1.5 trillion, while regencies and municipalities must have more than Rp500 billion.

However, for several public organizations, the new government regulation doesn’t solve the problem and they want to see the regulation abolished. “It is not about the amount of money, it is about the fact that these allowances have gone out of control,” said Khadafi. For them, the battle against PP 37 continues.

Abdul Manan, LN Idayani, Syaiful Amin

Tempo Magazine, No. 20/VII/Jan 16 - 22, 2007