House Budget Process Is Ripe for Reform

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House Budget Process Is Ripe for Reform
Yohanes Sulaiman | October 05, 2011

House Speaker Marzuki Alie (third right) with four house deputy speakers Taufik Kurniawan, Pramono Anung, Priyo Budi Santoso, Anis Matta, and National Police Chief Gen. Timur Pradopo (second left) attend a meeting at House of Representatives complex in Senayan, Jakarta, Sept. 29. (Antara Photo/Andika Wahyu)

Last week, Indonesia was again entertained by the embarrassing spectacle of a standoff between the Corruption Eradication Committee and the House of Representatives Budget Committee.

In response to what lawmakers from the Budget Committee called an “insulting” grilling by the body known as the KPK, the committee froze discussion on the 2012 state budget and refused to comply with the KPK’s summons for further questioning.

At the same time, the KPK insisted it acted based on the revelations from its investigation of the Manpower and Transmigration Ministry, saying the Budget Committee received kickbacks in exchange for raising the budget for the ministry. It then refused to answer House Speaker Marzuki Alie’s subpoena, claiming it had too much work.

Regardless of who is at fault in this standoff, there are many signs that something fishy is going on. The growing evidence suggests the committee has too much power over the budget and there are too few safeguard mechanisms.

As noted by Ahmad Muzani, the head of the House’s Financial Accountability Body (BAKN), the Budget Committee has the ability to approve or reject every project in a ministry.

At a glance, this law improves transparency and forces ministries to be accountable to the committee, preventing the creation of “phantom projects” to pad ministries’ budgets and line the pockets of officials. Yet, without any independent supervision, the law can abused by a corrupt committee.

At a personal level, members of the committee might demand kickbacks to look past any signs of abuses. For instance, according to Tempo newspaper, the corruption investigation into the Manpower and Transmigration Ministry was over the padding of the budget to construct a solar power generator.

The budget went from Rp 5 billion to Rp 8.9 billion ($560,000 to $997,000), with Rp 1.5 billion reportedly set aside for the Budget Committee and Rp 1.5 billion for Manpower Minister Muhaimin Iskandar.

At the party level, this law might actually foster more corruption due to the close relationship between ministries and political parties. As noted by Indonesia Corruption Watch in June, many parties use their ministerial seats to fill party coffers. Thus, this “fox guarding the chicken coop” arrangement means that each party represented in the Budget Committee has an incentive to look the other way, lest its own deals be threatened. They have a motive to strike agreements with each other to make sure the carnival of plunder will continue and nobody will be the party-wrecker.

Not surprisingly, the KPK is interested in knowing the details of the committee and the mechanism by which the committee distributes and allocates funds to each ministry. Given how potentially threatening this is for the committee, it is only natural its members cry foul over the KPK’s actions.

At the same time, there are two narratives concerning the KPK’s motives. The first narrative is the usual “KPK as the white knight on the white horse” attempting to break apart the chummy “business as usual” politics between ministries and the House. There is no love lost between the KPK and the House, especially Marzuki, who never hides his desire to dismantle the KPK.

Marzuki has defended the Budget Committee and threatened the KPK’s leadership with a subpoena, saying the KPK had behaved inappropriately by “treating Budget Committee members as graft suspects.” For the KPK, however, by answering the subpoena, it might be seen as capitulating, undermining its reputation should its investigations uncover nothing of importance.

The second narrative, however, questions the motive of the KPK, especially the extent to which the KPK can be trusted to clean the House. One cannot easily discount the allegations made by Muhammad Nazaruddin that KPK leaders could be bought and that the commission has been abusing its power by extorting suspects to line its pockets.

In this narrative, the standoff is explained as one pitting the House that did not want the KPK to keep abusing its power against the KPK that wants to control the House by using its discoveries to blackmail the legislative body.

Regardless of which narrative one subscribes to, it is clear the law needs to be fixed and there must be an increase in transparency over the budgeting process to prevent another embarrassing spectacle. It is too hasty to simply disband the Budget Committee, as many have recently suggested. The Budget Committee still has its use, notably as the legislative branch’s tool to hold the executive body to account.

Instead of having the ability to veto each project, the committee’s authority should be limited to giving approval to the ministry’s overall budget. The committee, however, has the ability to question the merit of each project later, especially when there are allegations of impropriety.

To satisfy a skeptical public, there must be transparency in both the budgeting and auditing processes. The Budget Committee must be able to show there are no vested interests or political motives in questioning the project. Each project must be evaluated on its own merit, with the entire process open to public scrutiny.

With public trust in the House steadily declining, it has more to lose with playing the game of victim politics. Much better would be to show that the House is taking the high road by reforming itself