This presentation was made by Mr. Purwiyanto, Indonesia, at the 10th OECD-Asian Senior Budget Officials Annual Meeting held in Bangkok, Thailand, on 18-19 December 2014.

1. MINISTRY OF FINANCE
REPUBLIC OF INDONESIA
Financing Public Welfare Provision
and Its Fiscal Impact
Bangkok, December 2014

2. 2
OUTLINE
1. Introduction
2. Public Welfare Provision
3. Challenges
4. Conclusion

3.  Direction of Fiscal Policy 2015 is “ Strengthening Fiscal Policy in
Order to Accelerate Sustainable Equitable Economic Growth”.
 One of the 9 targets (nawacita) of the Presiden is to create the
Indonesian people quality of life to be high, modern and
prosperous.
 Fiscal policies to support welfare program:
• 20% from budget expenditure for education
• Cash transfer as subtitute for fuel subsidy
• Implementation of National Social Security System (health =
2014, and employment = 2015)
• Rural fund
 Acceleration of poverty reduction
3
INTRODUCTION

4. Social Protection Programs :
 Scholarship for the poor/Indonesian Education Card to ensure that all
children at school age have access to primary education (SD, SMP) and
secondary education (SMU).
 School Operational Assistance/BOS  to ensure that the school have
enough funding to provide (primary) education.
 National programme for community empowerment  Urban PNPM
Mandiri
 Cash transfer for the poor  to protect the poor from particular shock
due to the policies issued by the government (ie. subsidized fuel price
increase) by giving them cash transfer
 National Social Security System  to improve public access for health by
providing health insurance for the poor.
 Food subsidy for the poor
 Rural Fund  to empower productivity in the community.
4
PUBLIC WELFARE PROVISION

5. 5
Policies in poverty reduction  poverty reduction programs are grouped into four clusters,
implemented in synergy  to meet the basic needs and also regionally based poverty reduction.
CLUSTER I
Family Based
Social Protection
and Assistance
Reducing the burden of the
poor
CLUSTER II
Community
Empowerment
Improving the welfare of the
poor
CLUSTER III
Empowerment of
Micro and Small
Enterprises
Increase savings and ensure
the sustainability of
entrepreneurship
CLUSTER IV
Programs for
People
Providing some goods at an
affordable price (subsidized
by the Government)
Health and education
assistance, Cash transfer
(JAMKESMAS/PBI JKN,
JAMPERSAL, BOK, RASKIN,
PKH, BOS, BEASISWA
SISWA/MAHASISWA MISKIN)
National Program of
Community Empowerment
(PNPM MANDIRI)
Soft Loans for Micro and
Small Enterprises (KUR)
Houses, Transportation,
Water, Electricity, Fishermen
welfare, Marginalized Urban
Communities

6. Pro-People Programs
6
5.0
5.6
6.0
6.3
6.8 6.7
7.1
8.2
8.8
9.1
10.0 9.9
-
2.00
4.00
6.00
8.00
10.00
12.00
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
2010 2011 2012 2013 2014 2015
percentage
trillionrupiah
Family Based Social Protection and Assistance Community Empowerment
Empowerment of Micro and Small Enterprises Others
Social Welfare on Total Expenditure (%) - RHS Social Welfare on Central Government Expenditure (%) - RHS

7. 7
Social and Welfare Program illustration  2015 Line Ministries Priorities and
Target
Continuing the School Operational
Assistance (BOS) program in
order to complete the 9-year
compulsory education for: 30.1
million elementary school
students ;14.3 million junior high
school students.
Providing assistance for 6.9
million poor students of SD /
SDLB / MI, 2.9 million poor
students of SMP / SMPLB / MT, 1.3
million poor students of SMA /
SMK / MA, and 194.8 thousand of
higher education for
underprivileged students.
The number of hospitals and
Community Health Center that are
accredited respectively of 61
hospitals and 50 health centers;
Infants aged 0-11 months who
received a complete primary
immunization up to 91%
 Conditional cash transfer (PKH) for 3
million very poor household, with
health and education requirement.
 Improving the quality of 400 MSME
through classification and
revitalization of cooperation agency.
Training for 25.000 Cooperatives
and SMEs human resources;
Facilitating 20 new
entrepreneurship and
strengthening SMEs
Facilitating and stimulating
construction of 20.000 new housing
unit and rehabilitation of 64.850
community housing

8. CONCLUSION
• Development always aimed for the welfare of the
people
• Development continuously sought by reducing
inequality, improving human resources quality,
reducing poverty, as well as expanding
employment.
• Pro-people development require synergy from
central government and local government 
ensure efficiency and effectiveness of the
programs implementation.
• The quality of planning and spending is strongly
needed
8

9. 9
THANK YOU