Jakarta, Indonesia Sentinel — The administration of Prabowo Subianto has implemented significant budget cuts across multiple ministry and government agencies in the 2025 State Budget (APBN). The budget efficiency measures follow President Prabowo Subianto’s directive to cut the 2025 State Budget (APBN) and Regional Budget (APBD) by Rp306.69 trillion.
According to Kumparan, The directive is outlined in Presidential Instruction (Inpres) No. 1 of 2025, signed on January 22, 2025. Of the total budget reduction, Rp256.1 trillion comes from ministry and agency expenditures, while Rp50.59 trillion is from transfers to regional governments.
Further details are specified in Letter No. S-37/MK.02/2025 issued by Finance Minister Sri Mulyani, listing specific budget items subject to cuts.
“In line with Presidential Instruction No. 1 of 2025 on Spending Efficiency in the Implementation of the State Budget (APBN) and Regional Budget (APBD) for Fiscal Year 2025, ministers and agency heads are instructed to review expenditures based on their respective duties, functions, and authorities to ensure efficient spending,” the letter states.
Categories for Reductions
According to Merdeka, Finance Minister Sri Mulyani has identified 16 expenditure categories for budget reductions, with cuts ranging from 10% to as much as 90%. Among the most affected are office supplies, which face a 90% reduction; ceremonial activities, down by 56.9%; meetings and seminars, reduced by 45%; research and analysis, cut by 51.5%; and training and technical guidance, which will see a 29% decrease.
Additionally, payments for professional services and honorariums will be cut by 40%, while spending on printing and souvenirs will be reduced by 75.9%, and rental costs for buildings and vehicles will drop by 73.3%.
Significant Budget Reductions
According to the official letter, several ministry and agencies will implement some of the most substantial budget reductions in 2025.
The Ministry of Public Works and Housing is among those facing the largest budget cuts. Deputy Minister Diana Kusumastuti revealed that the ministry’s budget has been slashed by nearly 80%, amounting to approximately Rp81 trillion from an initial allocation of Rp110 trillion.
“(The efficiency measures amount to) nearly 80%, with the budget reduced by Rp81 trillion,” Kusumastuti stated during an event at the Coordinating Ministry for Economic Affairs in Central Jakarta on Friday, January 31.
Affected Ministry and Agencies
Besides the Ministry Public Works and Housing, there are several other ministry and agencies affected by significant budget cuts in 2025. Below are the ten ministries and agencies with the most significant budget reductions, according to report from Merdeka:
- Nusantara Capital Authority (IKN) – The authority overseeing the development of Indonesia’s new capital has the highest budget efficiency measure, with a reduction of Rp4.81 trillion or 75.2% from its initial allocation of Rp6.39 trillion.
- Ministry of Public Works and Housing – The ministry’s budget has been reduced by Rp81.38 trillion, equivalent to 73.34% of its total allocation of Rp110.95 trillion.
- Ministry of Housing and Settlements – This ministry has seen a budget cut of Rp3.66 trillion, or 69.4% of its original allocation of Rp5.27 trillion.
- Ministry of Youth and Sports (Kemenpora) – The ministry’s budget has been reduced by Rp1.46 trillion, or 62.9% of its Rp2.33 trillion allocation.
- National Counterterrorism Agency (BNPT) – The agency’s budget has been cut by Rp433.19 billion, equivalent to 69.1% of its initial Rp626.39 billion allocation.
- Coordinating Ministry for Law, Human Rights, Immigration, and Corrections – This ministry has cut Rp6 billion, representing a 66.4% reduction from its Rp9.02 billion budget.
- Witness and Victim Protection Agency (LPSK) – The agency has implemented budget cuts of Rp144.5 billion, or 62.8% of its original Rp229.9 billion allocation.
- Sabang Free Trade Zone Authority – The agency overseeing the free trade zone in Sabang has reduced its budget by Rp33.6 billion, or 62.8% of its Rp53.49 billion allocation.
- Coordinating Ministry for Food Affairs – This ministry has cut Rp27.6 billion, equivalent to 62.6% of its Rp44 billion budget.
- Batam Free Trade and Port Zone Authority – The authority has reduced its budget by Rp1.23 trillion, or 62.18% of its total allocation of Rp1.99 trillion.
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The budget cuts on the ministry and government agencies reflect the Prabowo administration’s commitment to fiscal efficiency while prioritizing social welfare programs. State Secretary Minister Prasetyo Hadi stated that the budget cuts are aimed at strengthening the Free Nutritious Meals (MBG) program.
As the government reallocates resources, the challenge lies in balancing cost-saving measures with maintaining essential public services and infrastructure development.
(Raidi/Agung)
