"The increase in the TDL will affect industry and will multiply operational costs," Asmindo Chairman Ambar Tjahyono said.
Jakarta (ANTARA News) - The Indonesian Handicraft and Furniture Industry Association (Asmindo) rejects the government`s plan to raise the basic electricity basic tariff (TDL) in 2013, its chairman said.

"The increase in the TDL will affect industry and will multiply operational costs," Asmindo Chairman Ambar Tjahyono said here on Tuesday.

He said that a number of furniture factories operated some 30 to 40 percent components which used electricity. Furniture industry in its production used a number of machines which used some 70 percent electricity.

"If the government raised the electricity basic rates it will kill local market. Amid the present global economic conditions, the government should support industry, not putting a burden on it," he said.

He said that if the country`s furniture exports continued to drop up the end of the year, while industry had also to bear the burden of tariff increase it was feared that furniture industry would be crippled.

"The worst thing that could happen is lay-offs of employees in furniture factories," he added.

In 2013, the government set aside a subsidy of Rp300 trillion of which Rp100 trillion will be provided for the electricity sector while the remaining one will be given to fuel oils.

The government hopes that business players would accept the power tariff increase.

Earlier, Finance Minister Agus Martowardojo said additional fund of Rp12 trillion could be raised every year for infrastructure projects as a result of planned increase in electricity tariff.

"Assuming that the electricity tariff is raised by 3 to 4 percent every quarter starting January 2013 there will be an addition of Rp12 trillion per year," Agus told reporters recently.

He said the Rp12 trillion fund expected from the rise in the electricity tariff is not yet included in the capital spending of Rp193.83 trillion set in draft state budget proposed by the government on Thursday to the parliament.

The plan to cut subsidy on electric energy is yet to be discussed including with the House of Representatives, he said.

He said the government will continue to control and improve the quality of subsidy spending which grows from year to year.

He said the government has to set aside large fund for subsidies at the expense of social and infrastructure spending.

"Therefore, we need to improve the spending quality as a main strategy in subsidy management," he said.

Meanwhile, head of the Fiscal Policy Agency of the Finance Ministry Bambang Brodjonegoro said raising electricity tariff needs to consider inflation that may come as a consequence and the purchasing power of the people.

"The plan should not trigger a surge in inflation that would put greater burden on the consumers" Bambang said.(*)

Editor: Heru Purwanto
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