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Professor of Constitutional Law of Gadjah Mada University, Denny Indrayana, and lecturer of Constitutional Law of Gadjah Mada University, Zainal Arifin Mochtar, as experts presented by the Petitioners in judicial review hearing of Law on 2018 APBN on Thursday (22/3) in the Plenary Courtroom of the Constitutional Court. Photo by Humas MK/Ganie.

The difference in the regulation on proportion between the central government expenditure budget and budget disbursement of transfer to regions and village funds in Law No. 15/2017 on State Budget of Fiscal Year 2018 (APBN 2018) is contrary to the 1945 Constitution. It was conveyed by the professor of constitutional law of Gadjah Mada University Denny Indrayana as expert presented by the Petitioners in the follow-up session of the judicial review of Article 15 paragraph 3, Thursday (22/3) in the Plenary Courtroom of the Constitutional Court.

In his statement, Denny explained that the basic principles in the 1945 Constitution related to the State Budget and State Finance are openness and responsibility and to best attain prosperity for the people (Article 23 paragraph (1)) and the relations between central and local finances administered and managed fairly and in harmony (Article 18A paragraph (2)). What need to be observed, Denny explained, is that Article 18A of the APBN Law regulates the changes of the central government budget, but not a single article in the law regulates changes in transfer budget to regions and village funds.

"Discrepancy in the regulation of Law No. 15/2017 raises constitutional issues because it violates the provision of Article 18A paragraph (2) of the 1945 Constitution that requires that central and regional financial relations be administered and managed in a fair and harmonious way," Denny explained before the hearing led by Deputy Chief Justice of the Constitutional Court, Anwar Usman.

Denny also noticed that the phrase "delays and/or deductions" is only related to budget disbursement of transfer to regions and village funds. According to him, the phrase is clearly a means of control by the central government over the management of regional finances. However, the administration and management must be ensured not in contradiction with the 1945 Constitution.

Mechanism of Change and Sanctions

In relation to the phrase "delays and/or deductions" in the a quo article, Denny stated that the mechanism of change is done by involving the Regional Representatives Council (DPD), not just the House of Representatives. Denny explained that although the phrase "delays and/or deductions" in the a quo law has been passed through the House approval, there is still constitutionality issue because sanctions directly imposed can have widespread impacts on the reduction of local budgets and hamper regional development.

"We are of the view that "delays and/or deductions" is required as a means of control for the central government to the regions; there should be mechanisms that ensure sanctions are imposed on areas that commit violation; sanctions are imposed gradually, and sanctions are applied to the budget for the next fiscal year," Denny said.

Relation between Central and Regional Govt

On the same occasion, Constitutional Law lecturer from Gadjah Mada University, Zainal Arifin Mochtar, in his statement observed the financial relationship between the central and local governments. In the concept of a unitary state, Zainal explained, the existence of central and regional government relations as stated in Article 18 paragraph (1) of the 1945 Constitution that Indonesia is "divided" into provinces and district/city areas. Similarly with financial relationship, in Article 18 paragraph (2) the word "divided" states that democratic governance in the regions that require finances is implemented fairly.

In addition, Zainal explained that the state must build strong relationship with the regions in the financial affairs, which is reflected by the involvement of regions in the drafting of the state budget, starting from the initiation of regional aspirations collected by the central government by the presence of the Regional Representatives Council for limited supervision of the state budget. It also means that any action taken by the government that makes changes that has been outlined in the state budget is an action that does not comply with state administration.

"Since the state budget and its derivative products are based on mutual agreement, altering by deductions will greatly impact the changes of something agreed upon between the government and the House of Representatives in the legislation of the state budget," he explained.

The Petitioners, who are members of the G20 May Movement, is a community association in East Kutai District that consists of various professions. In their petition, the Petitioners question the budget cuts and delays by the central government for the local government. The Petitioners claim that the a quo provision has impaired their constitutional rights because as East Kutai District citizens they could not obtain their right to transfer of money from the central government in a fair and harmonious manner according to the law. (Sri Pujianti/LA/Yuniar Widiastuti)

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