REPUBLIKA.CO.ID, JAKARTA, — President Prabowo Subianto announced budget cuts in various ministries and agencies to improve fiscal efficiency and close loopholes in misuse of state funds. The move was announced in a video statement released by the Presidential Secretariat in Jakarta on Thursday.
In an initial initiative to improve efficiency, Prabowo mentioned that the government managed to save Rp308 trillion from the central government budget. “These savings come from unreasonable spending. If they are not cut, these funds have the potential to lead to corruption,” Prabowo said.
The savings of Rp308 trillion come from an initial review of central government spending, aimed at identifying inefficient and unnecessary allocations. Prabowo warned that if the fund is not controlled, it will burden the country's finances without providing real benefits to society.
Prabowo also highlighted Indonesia's high Incremental Capital Output Ratio (ICOR), currently at 6.5, well above neighboring countries. According to him, this high ICOR reflects an inefficiency of about 30 percent, equivalent to about US$75 billion of the country's budget, which is close to Rp3,700 trillion.
.rec-desc {padding: 7px !important;}Budget Cuts and Efficiency
The budget cuts target spending such as ceremonial events, office supplies, as well as meetings and seminars outside the office, which Prabowo said often failed to address core issues such as poverty alleviation and job creation. The government is also reviewing routine procurement practices, including frequent purchases of computers and office equipment every year.
Prabowo stressed that substantial savings were still possible by tightening oversight of non-essential spending across government agencies. As an additional measure to reduce operational costs, the government is considering new working arrangements, including shorter working weeks and wider adoption of remote working.
“I see other countries reducing the working week from five days to four, such as the Philippines and Pakistan. Then there's working from home. During COVID, we managed to execute it well. I think we can do it again. Maybe 75 percent of employees can work from home,” Prabowo said.
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