Jokowi needs to deliver on promises about allocation of tax savings

WHEN it comes to saving taxpayers' money, Indonesian President Joko Widodo has already left a rather lasting impression since his inauguration on Oct 20. He made headlines last week when he ditched the presidential jet and instead flew economy class on national carrier Garuda Indonesia to attend his son's graduation ceremony in Singapore. Then on Monday, he announced he would slash the travel and meeting budget for his Cabinet by about 40 per cent to free up funds to carry out reforms in the country.

Apart from taking steps to bolster tax collection, the 53-year-old leader also took the difficult decision earlier this month to increase retail gasoline and diesel prices by nearly 31 per cent, a move that would reportedly save the government around US$11.5 billion in subsidies - or 9 per cent of budgetary spending - in 2015. Of all the cost-cutting measures rolled out so far, it is this last one where Mr Joko must tread carefully. That he managed to implement such a major cut in fuel subsidies so soon since coming to power without causing a significant public outcry is to be lauded.

Mr Joko, who won the presidential election with more than 53 per cent of the votes, campaigned on a pledge to scale back fuel subsidies, which cost Indonesia more than US$20 billion a year, in order to free up funds for infrastructure, education and healthcare needs in the country. The reduction in fuel subsidies has generally been accepted by the people, even though the move has already led to fares in Jakarta's non-air-conditioned public transport services to increase from Tuesday. Mr Joko, however, has largely weathered this storm even though he is aware of the risk of strikes and street protests down the road, not to mention the fact that he could face criticism and political attacks by the Opposition.

Some analysts have also noted that Mr Joko, whose approval rating is now at its lowest point since he took office, must be transparent in the reasoning behind his various policy decisions so as to avoid any doubt over his young administration. A new poll conducted by the Indonesian Survey Circle found nearly 44 per cent of voters are unsatisfied with him, citing distress over the fuel price hike. There was little doubt that Mr Joko was going to have a smooth start to his five-year term, given the heavy expectations on his shoulders and the reality that he would have to make many tough, controversial decisions along the way. He is aware that he has to deliver tangible benefits to the public in order to sustain his popularity and give him the ability to carry out further reforms.

The government intends to use the money saved from the fuel subsidy cuts to fund an initiative to give low-income families access to free healthcare, provide education for 160,000 children and extend cash grants. These are all critical plans that require a leader who is not only calm and confident to carry them out, but one who is credible enough to bite the bullet when it matters and deal with the consequences that come his way. Mr Joko is hitting all the right notes when it comes to the Indonesian budget. He had described the budget as one that had to change from being wasteful to being productive. With the various measures to slash public spending now firmly in place, he has to deliver on his promises to allocate the savings to the areas that the country needs the most.