Indonesia to Cut Government Budget Following Presidential Instruction

Jakarta, VIVA – President Prabowo Subianto has decided to cut unnecessary spending in the 2025 State and Regional Budgets.

This directive is outlined in Presidential Instruction (Inpres) Number 1 of 2025, which focuses on ensuring efficient use of public funds in the implementation of the 2025 fiscal year budget.

The issuance of Inpres 1/2025 is directed at members of the Red and White Cabinet, the Commander of the Indonesian National Armed Forces (TNI), the National Police Chief (Kapolri), the Attorney General, heads of non-ministerial government institutions, leaders of state secretariats, governors, as well as district heads and mayors.

"Efficiencies in the 2025 fiscal year state budget amount to IDR 306.69 trillion," according to the instruction issued by President Prabowo on Thursday (Jan 23).

This saving is achieved through reviews of spending by ministries and agencies (K/L), totaling IDR 256.1 trillion, and adjustments to Transfer to Regions (TKD) funds of IDR 50.59 trillion.

Furthermore, President Prabowo instructed all ministers and agency leaders to identify plans for budget efficiencies within their respective institutions, in line with targets set by the Minister of Finance.

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Menteri Keuangan, Sri Mulyani Indrawati

Photo :

• VIVA.co.id/Anisa Aulia

These efficiency plans should include both operational and non-operational expenses, covering items such as office operational costs, maintenance budgets, travel expenses, government assistance, infrastructure development, and procurement of equipment and machinery.

The instruction also requires all ministers in the Red and White Cabinet to submit the results of their efficiency plans to their respective committees in the House of Representatives for approval.

Once approved, the plans must be reported to Finance Minister Sri Mulyani no later than February 14, 2025.

"The Minister of Finance is tasked with revising the budgets of ministries/agencies by freezing specific budget allocations, which must be recorded in the notes of page IV A of the Budget Execution List (DIPA)," reads the fifth dictum, point c.

Additionally, regional heads are instructed to adjust their 2025 Regional Budgets (APBD) in response to the IDR 50.59 trillion cut in TKD funds.

"The allocation of expenditure budgets should be focused on achieving public service performance targets and not based on equal distribution among regional departments or previous fiscal year allocations," the instruction states.

This efficiency directive reflects President Prabowo’s administration’s determination to ensure that the 2025 state budget is utilized more effectively and efficiently to support national priorities.

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These efficiency plans should include both operational and non-operational expenses, covering items such as office operational costs, maintenance budgets, travel expenses, government assistance, infrastructure development, and procurement of equipment and machinery.