REGIONAL FINANCIAL STRATEGY (PAD)

REGIONAL FINANCIAL STRATEGY (PAD)

A. Local Revenue
Understanding Local Revenue. According to Law No.32 of 2004 on Regional Government, local revenue is all recognized the right of the area as an addition to net worth in the period of the fiscal year concerned.

According to Law No.32 of 2004 on Regional Government, local revenue sources consist of:
a. Revenue, namely:
1) The local tax
2) The regional fee
3) The district-owned enterprise, the wealth management areas are separated,
4) Other areas of legitimate income
b. Fund balance, consists of:
1) Revenue-sharing is barsumber from taxes and natural resources
2) the general allocation fund
3) a special allocation fund
c. Loan region
d. Other local revenue legitimate

Furthermore, in the explanation of the Law No.33 of 2004 concerning Financial Balance Between Central Government and Local Government is the PAD is the acceptance region obtained from sources within its own territory is levied on the basis of local regulations in accordance with the rules and regulations applicable perundan .

B. Strategy Improving PAD
PAD is a tip timbak in the administration of Local Government, various government activities both basic tasks and duties of assistance must be balanced by the presence of PAD, as the media mover local government programs. For the presence of PAD runs smoothly, then the amount of minimum revenue balance does not mean big spending pegs rather than the pole, therefore the Local Government must have a strategy in the management of PAD, especially in improving the original income regions, strategies to increase local revenue can be made through the strategy as beikut:

1. REVENUE MANAGEMENT AREA DIRECTION
Local revenue in local budget structure is still a significant element of its role both in support of governance and service delivery to the public. The direction of the management of PAD regional income, the balance funds and other local revenues. In managing the budget revenues will be considered an attempt to increase tax revenues and levies without having to add a burden to society and lead to reluctance to invest.

With a pattern of appropriate policies to improve the ability of local finance will gradually be able to get out of the various issues which face such a high unemployment rate and the number of poor people is quite large. Local economic conditions such as these are in synergy with the success in implementing a variety of other development efforts will bring progress and bring people in a prosperous state.

Policy formulation in support of the local revenue budget management will be more focused on efforts to mobilize local revenues, fund balance and other local revenues. The growth component of Local Taxes, Levies and Local business results will be an important factor in driving future revenue growth. As for the Balanced Fund, Tax-Sharing components and components of the Tax Sharing and Provincial Financial Assistance are 2 elements that are important in encouraging the growth of Balance Fund, which will be obtained later.

Revenue contribution is still small as a barometer of the level derah local independence in carrying out the mandate of regional autonomy, in accordance with Law No. 32 of 2004, requires that local government is continuously trying to improve the original income as the primary source of local revenue, a fair and accountable with consider the condition of society which became the subject of original income.

The direction of the management of regional income in the future are centered on the following steps:
1. Control systems and procedures for local revenue collection
2. Intensification and extensification of local revenue
3. Improved coordination and supervision of local revenue collection
4. Improved service to the community, both the speed and ease of payment services to obtain information
5. The utilization of organizational resources effectively and efficiently
6. Increased local revenue socialization efforts
7. Improving the quality of the data base all the regional income
As for alternative revenue sources for the future, among others, come from:

1. Intensification and extension of PAD
In the next five years, local financial ability to raise finance Indonesian nation will be enhanced by relying on intensification and extensification Policy collecting levies and local taxes. However, the strength of the proposed reforms as his new strategy on stress management is the management and performance audits. By applying modern management and performance audit objective, it will have an impact on efficiency, transparency and effective closing leaks PAD. Intensification and extensification of levies and local taxes will also be planned with the object always consider the balance of taxes and levies with a coefficient of the load borne by the public.

2. DEVELOPMENT COOPERATION
In order to maintain and improve the financing capacity of governance and development in undonesia will develop a new strategy that is not oriented to intensification and extensification of levies and local taxes. Acquisition Revenue (PAD) in fact difficult to expect an increase exponentially. Local Revenue from year to year was only a linear increase even harder to reach the percentage of 30% of total revenues.
Given the aforementioned facts, the next five years will be applied to strategies for developing local financial capability through pioneering new forms of cooperation, either by government or by private agencies (domestic and foreign) that can be an alternative source of revenue that more prospective and dynamically varied. Economic cooperation can be directed to joint venture contracts are mutually beneficial.

2. LOCAL COMPANY FORMATION
The third strategy of development of financial capability Indonesian nation is done by formulating a new economic regulations, especially lead to the formation of various local companies and business entities to revitalize existing areas. In the next five years the Regional Company will continue to be developed to follow the law of the market, to be a regional economic power is a real professional and capable of making a profit (profit Gainer) for the nation of Indonesia.

Meanwhile, in order to perform its function as a public service agency, the Indonesian Government will continue to maintain and even expand the presence of the Regional Company (Public Service Board) as public services that manage the domain concerning lives of many people. Even the development of local companies will be optimized to achieve a professional level by standard excellent service. Audit management and quality control (total quality control) will be applied strictly on local companies that already exist, with real targets that local companies are not to lose even have to make a profit.

3. DIRECTIONS MANAGEMENT LOCAL SHOPPING
The definitive shopping area is the duty of local government which is recognized as a reduction of net worth. For the next five years, government spending is directed at increasing the proportion of spending to favor the public interest, while still maintaining the existence of government administration. In use, spending should remain priority areas of efficiency, effectiveness and savings in accordance with the priorities, which is expected to provide support for regional development programs. In order for local government finances can be managed properly, it needs to be done financial planning, with always the potential earnings, do shopping efficiency and develop sources of financing.

Shopping areas are classified according to the organization, functions, programs and activities and type of expenditure. Based on the classification of the organization adapted to the organizational structure of local governance. Meanwhile, according to classification functions consist of: (a). Classification based on government affairs, and (b). For the purpose of harmony and integration in the framework of the management of state finances.

While based on government affairs, classified according to the governmental authority of Gresik Regency. Meanwhile, according to the classification for the purpose of harmony and integration in the framework of state financial management, consisting of: (a). Public services, (b). Order and security, (c). Economics, (d). Environment. (E). Housing, (f). Health, (g). Tourism and culture, (h). Religion, (i). Education, (j). Social protection.

In order to improve the effectiveness of local expenditures, the necessary policy measures expenditure management areas as follows:
1. To improve the incomes and welfare officers and retirees to consider the ability of local financial
2. Improving the efficiency and effectiveness in the procurement of goods and services used for the implementation of public service each unit of local government as well as maintenance of local assets through the implementation of procurement reforms by taking primacy orientation on benefits to the country in accordance with prevailing laws and regulations.
3. Provide facilities and infrastructure development are sufficient to support high economic growth, improving people's welfare, poverty alleviation and unemployment reduction;
4. Directs the provision of subsidies provided by local governments for better targeted
5. Directing social assistance expenditure that can directly help to alleviate the burden of the poor
6. Supports the coordination and synchronization of fiscal decentralization policy in order to improve the financial relationship between central and local governments through the preparation and formulation of policy in the determination of the General Allocation Fund, Special Allocation Fund, Revenue Sharing and Tax Non-tax included Reforestation Fund
7. Improve coordination with relevant central government in monitoring and evaluation of equalization funds
8. Continuing the steps of updating data relating to policy formulation equalization funds
9. Develop and formulate policies structuring financial management, among others related to the provisions on transparency and accountability in financial management, financial management improvement area, control the budget deficit and surplus areas, as well as reporting and management of local financial information