Materi 5 Pengantar Ekonomi Sektor Publik Adna Fisipol

Summary

This lecture on state financial administration focuses on state expenditure, exploring its definition, types, causes of growth, and development theories. It covers government spending, efficiency, and the role of subsidies in improving public welfare. The discussion highlights different categories of state expenditure, such as employee salaries, capital investments, social assistance, and subsidies, and analyzes the impact of economic growth on these expenditures. The lecture also touches on the process of budgeting, the principles guiding state expenditure, and the government's responsibility to balance welfare and economic growth. It concludes with the importance of transparency and accountability in financial management.

Takeaways

• 😀 State expenditure refers to government spending aimed at achieving societal welfare, including financing public goods, infrastructure, and social programs.
• 😀 State expenditure can be classified into exhaustive (direct purchase of goods/services) and transfer expenditures (such as subsidies or social assistance).
• 😀 The causes of increased state expenditure include factors like war, urbanization, democratic processes (e.g., elections), and rising government activities.
• 😀 The efficiency of state expenditure is crucial for achieving economic goals and improving the welfare of citizens, and is overseen by the central government and the DPR.
• 😀 Government expenditure includes employee expenditure, goods expenditure, capital expenditure, subsidies, and social assistance, all aimed at funding the state's operations and development.
• 😀 The distinction between routine and development expenditure is becoming less significant in modern budgets, as they are now grouped under a unified structure.
• 😀 Performance-based budgeting is used to evaluate the effectiveness of government spending and its impact on society, focusing on the benefits delivered to the public.
• 😀 Transparency and accountability in state financial management are ensured through the submission of financial reports, which are audited and presented to the DPR within six months of the fiscal year end.
• 😀 The growth of state expenditure is closely linked to the economic growth (GDP), with a steady increase in government spending per capita over time.
• 😀 Subsidy policies play a key role in government spending, with subsidies being provided either as direct monetary transfers or as goods offered at lower prices to reduce consumer costs.
• 😀 Different types of subsidies (money vs. in-kind subsidies) have distinct effects on consumption, with in-kind subsidies often leading to higher consumption of subsidized goods than cash transfers.

Q & A

What is state expenditure?

State expenditure refers to government spending related to financing programs aimed at achieving the welfare of society as a whole. It includes both exhaustive expenditures (for goods and services) and transfer expenditures (such as subsidies and gifts to other countries).

What are the main causes of increasing state expenditures?

The main causes of increasing state expenditures include war, increased income levels, urbanization, developments in democracy, wasteful government activities, and social funding for various disasters.

What is the relationship between state revenue and the budget (APBN)?

The state revenue and expenditure budget (APBN) is a tool for managing the economy, aimed at prospering the people while ensuring effective management of the country's finances. The APBN requires oversight from institutions like the DPR to ensure it promotes economic welfare efficiently.

What are the key principles guiding state expenditure policies?

State expenditure policies should be guided by principles of equity, economic efficiency, and fairness, ensuring that no group is unfairly compensated while fostering overall societal welfare.

How are government expenditures classified based on economic classification?

Government expenditures are classified into employee expenditures, goods expenditures, capital expenditures, interest payments on debt, subsidies, grants, social assistance, and other expenditures.

What is the purpose of performance-based budgeting?

Performance-based budgeting is designed to assess how well government expenditures serve the community by evaluating the benefits of budget use rather than just controlling financial inputs.

How does government financial accountability work in Indonesia?

The government must submit a financial accountability report to the DPR no later than six months after the end of the relevant budget year. This report includes a budget realization report, balance sheet, cash flow report, and notes, prepared according to government accounting standards.

What is the difference between defense expenditures and civil expenditures?

Defense expenditures are funds allocated for the operational costs of the military and police, including weapons and warships. Civil expenditures, on the other hand, cover government spending for civil society activities and services.

What are the key characteristics of state finances?

State finances are characterized by the ability to handle deficits, make loans domestically or abroad, and manage low-interest loans compared to the private sector. The government also often invests in infrastructure, which can require borrowing.

How do subsidies impact consumers?

Subsidies can increase consumer income or lower the prices of goods, thus benefiting consumers. There are two types: money subsidies (cash transfers) and in-kind subsidies (providing goods at lower prices). These subsidies aim to reduce the financial burden on consumers, particularly for essential goods.