Ruling by Indonesia's top court should not impact fiscal plans, lawmaker says

JAKARTA : An Indonesian Constitutional Court ruling setting out a time limit on President Joko Widodo's emergency COVID-19 law will have no bearing on the government's 2022 budget and fiscal consolidation plans, a senior lawmaker said on Monday.

The legislation passed by parliament in May 2020 gave the government the power to allocate almost US$50 billion of COVID-19 relief funds last year without having to get parliamentary approval for any revisions or decisions. It also allowed the government to remove a fiscal deficit limit of 3per cent of GDP for three years.

The court ruled last week the president's law on government finances will only be effective for two years after it was passed or until the president declares the pandemic to be over, whichever comes first.

Any government spending for COVID-19 after that must be approved by parliament, the ruling said.

Said Abdullah, chairman of parliament's budgetary committee said the ruling will have no impact on next year's budget, which was already approved by parliament.

"The court did not talk about deficits above 3per cent. It just rules to return parliament's budget rights," he told Reuters.

A finance ministry spokesperson did not respond to Reuters' requests for comment. Chief legal minister Mahfud MD told a news conference late on Friday the court had ruled in the government's favour, but made no mention of the time limit.

The case was brought forward by civilians and non-profit organisations last year, who alleged the law could breach the constitution by bypassing parliament's rights to review government budgets and providing impunity to officials. The plaintiffs could not be reached for comment.

The court said last week its ruling would provide greater clarity.

"The strict and definite time limit in the COVID-19 law is so that all parties have certainty," the court said. "Therefore, the enactment of the law must be linked to the emergency status."

Mahfud also told Friday's news conference that the court's ruling had cleared up any impunity concerns by highlighting that officials must act in good faith and in accordance with other laws.

(Reporting by Gayatri Suroyo; Editing by Ana Nicolaci da Costa)