JAKARTA. As the economic situation is predicted to improve next year, the House of Representatives has demanded that the country’s state-run companies contribute more to state coffers by paying more dividends as their profits grow higher.Dividend payouts from state-run firms should be higher than the Rp 41 trillion target set by the government in the proposed 2015 state budget, lawmakers from the House budget committee said in a meeting with the Finance Ministry and the State-Owned Enterprises Ministry on Monday.State-Owned Enterprises Ministry secretary Iman Apriyanto Putro proposed to raise the dividend payouts to Rp 41.7 trillion next year, but that target was still seen as too conservative.Jhonny Allen Marbun, a lawmaker from the ruling Democratic Party, said the slight increase in next year’s target meant that the government was just doing a “copy-and-paste” job from this year’s target, which was set at Rp 40 trillion.State-run firms such as port operator Pelindo, oil and gas company PT Pertamina and contractor PT Hutama Karya might have the potential to increase their earnings next year, he said. Dolfi F. Palit, an Indonesian Democratic Party of Struggle (PDI-P) lawmaker, argued that better economic conditions next year should translate into bigger dividend payouts.In the proposed 2015 state budget, economic growth is set at between 5.6 and 5.8 percent.That would be higher than this year. Government officials predict the growth of gross domestic product (GDP) may only rise to around 5.3 percent through 2014, which would be its slowest increase in five years, as the economic slowdown is predicted to affect the revenues of local firms.“Next year, the country is likely to see higher economic growth, with sectors such as banking, property, real estate and construction likely to benefit,” Dolfi said.Responding to the lawmakers’ demand, Iman from the State-Owned Enterprises Ministry said that some state-run firms needed to hold back from making too many dividend payouts as they needed the capital to expand their operations.He pointed to state-run banks as an example, as they needed to strengthen their capital base in response to the Basel III banking rules that require stricter capital requirements for banks globally.“From all our banks, perhaps only the BRI [Bank Rakyat Indonesia] could be asked to put aside a dividend payout ratio of more than 30 percent,” Iman told lawmakers.Structural reforms implemented in the operations of state-run firms have led to an increase in their contributions to state revenues. Dividend payouts of state-run firms increased from Rp 28.2 trillion in 2011 to an estimated Rp 40 trillion this year, according to data from the Finance Ministry.Of the Rp 41.7 trillion in dividends targeted to be paid by state-run firms next year, Rp 9.3 trillion would come from state-run banks such as the BRI, Bank Mandiri, Bank Negara Indonesia (BNI) and Bank Tabungan Negara (BTN).In the 2010 to 2013 period, total assets of the country’s state-run companies grew by 18.5 percent annually on average, with revenues and net profits growing 20.6 percent and 3.6 percent, respectively. (Satria Sambijantoro)
State firms need to pay higher dividends
JAKARTA. As the economic situation is predicted to improve next year, the House of Representatives has demanded that the country’s state-run companies contribute more to state coffers by paying more dividends as their profits grow higher.Dividend payouts from state-run firms should be higher than the Rp 41 trillion target set by the government in the proposed 2015 state budget, lawmakers from the House budget committee said in a meeting with the Finance Ministry and the State-Owned Enterprises Ministry on Monday.State-Owned Enterprises Ministry secretary Iman Apriyanto Putro proposed to raise the dividend payouts to Rp 41.7 trillion next year, but that target was still seen as too conservative.Jhonny Allen Marbun, a lawmaker from the ruling Democratic Party, said the slight increase in next year’s target meant that the government was just doing a “copy-and-paste” job from this year’s target, which was set at Rp 40 trillion.State-run firms such as port operator Pelindo, oil and gas company PT Pertamina and contractor PT Hutama Karya might have the potential to increase their earnings next year, he said. Dolfi F. Palit, an Indonesian Democratic Party of Struggle (PDI-P) lawmaker, argued that better economic conditions next year should translate into bigger dividend payouts.In the proposed 2015 state budget, economic growth is set at between 5.6 and 5.8 percent.That would be higher than this year. Government officials predict the growth of gross domestic product (GDP) may only rise to around 5.3 percent through 2014, which would be its slowest increase in five years, as the economic slowdown is predicted to affect the revenues of local firms.“Next year, the country is likely to see higher economic growth, with sectors such as banking, property, real estate and construction likely to benefit,” Dolfi said.Responding to the lawmakers’ demand, Iman from the State-Owned Enterprises Ministry said that some state-run firms needed to hold back from making too many dividend payouts as they needed the capital to expand their operations.He pointed to state-run banks as an example, as they needed to strengthen their capital base in response to the Basel III banking rules that require stricter capital requirements for banks globally.“From all our banks, perhaps only the BRI [Bank Rakyat Indonesia] could be asked to put aside a dividend payout ratio of more than 30 percent,” Iman told lawmakers.Structural reforms implemented in the operations of state-run firms have led to an increase in their contributions to state revenues. Dividend payouts of state-run firms increased from Rp 28.2 trillion in 2011 to an estimated Rp 40 trillion this year, according to data from the Finance Ministry.Of the Rp 41.7 trillion in dividends targeted to be paid by state-run firms next year, Rp 9.3 trillion would come from state-run banks such as the BRI, Bank Mandiri, Bank Negara Indonesia (BNI) and Bank Tabungan Negara (BTN).In the 2010 to 2013 period, total assets of the country’s state-run companies grew by 18.5 percent annually on average, with revenues and net profits growing 20.6 percent and 3.6 percent, respectively. (Satria Sambijantoro)
