Sri Mulyani: Budget Efficiency Will Become New Government Culture

JAKARTA, KOMPAS -- The budget efficiency policy currently being implemented by the Prabowo Subianto administration will serve as a reference for the following year. Ministries and agencies will be required to carry out measurable efficiency as a new cultural practice in governance.

In a hearing between Commission XI of the House of Representatives (DPR) and the Ministry of Finance on Thursday (13/2/2025), Minister of Finance Sri Mulyani Indrawati answered several questions regarding the budget efficiency policy of Rp 306.7 trillion ordered by President Prabowo.

The meeting was actually to discuss budget efficiency within the Ministry of Finance. However, members of the House of Representatives also inquired about the general efficiency policies that must now be implemented by each ministry/agency, considering that the Ministry of Finance is the main authority for these policies.

Sri Mulyani stated that the budget efficiency carried out across ministries and agencies (K/L) in 2025 aims to sharpen the goals of Asta Cita Prabowo. She also hinted that the budget efficiency would continue until 2026.

According to Sri Mulyani, the efficiency policy will be used as a baseline or reference to create a new culture of government bureaucratic efficiency in all ministries/agencies.

Not only that, the results of the efficiency of the 2025 State Budget (APBN) will also be used as a reference in drafting the 2026 State Budget (APBN) in the future.

"I believe the spirit is truly to build a new culture in working. The 2026 State Budget is still in the initial stages of thought, but indeed what we are doing now is expected to create a new culture," said Sri Mulyani in a meeting held at the Parliament Complex, Senayan, Jakarta.

Although the efficiency measures taken are substantial, he said, the savings in each Ministry/Agency should not disrupt programs that serve the community, such as social assistance (bansos). The total value of efficiency is confirmed to remain at IDR 306.7 trillion despite the budget reconstruction.

He also ensured that this efficiency would not erode mandatory spending in the state budget as mandated by the constitution, such as the obligation of 20 percent for education funding. The Ministry of Finance will review the results of the efficiency plans submitted by each ministry/agency to ensure that this efficiency does not violate constitutional mandates.

"Public services must not be sacrificed and various targets will not be reduced. The 20 percent mandate according to the constitution will definitely be maintained. After we gather proposals from all ministries/agencies, we will sort them out again to ensure compliance with the constitution is maintained," he said.

In the last three weeks, the government has carried out a "budget reconstruction" or changed the budget efficiency policy that Prabowo had initially ordered in Presidential Instruction (Inpres) Number 1 of 2025. The instruction was issued on January 22, 2025 and followed up by the Ministry of Finance through the Minister of Finance's Letter S-37/MK.02/2025 on January 24, 2025.

In the middle of the road, on February 7, 2025, Deputy Speaker of the House of Representatives from the Gerindra Party Faction Sufmi Dasco Ahmad instructed all commissions in the House of Representatives to postpone in-depth meetings with their respective partner Ministries/Institutions. The reason was that a reconstruction would be carried out on the budget efficiency policy.

On February 11, 2025, the Ministry of Finance and the State Secretariat also gathered each K/L and asked each K/L to reconstruct the budget with new efficiency values.

Through the reconstruction, there was a change in the portion and efficiency of the budget in a number of K/L. The efficiency value that must be carried out by most K/L was reduced. In return, as said by the Chairman of the DPR Budget Agency Said Abdullah, all K/L were affected by budget efficiency so that it was "fair".

Previously, there were 16 ministries/agencies that escaped the efficiency obligation, namely law enforcement agencies, state audit institutions, legislative and judicial institutions, the National Nutrition Agency as the implementer of the Free Nutritious Meals (MBG) policy, and a number of ministries.

As of Thursday (13/2/2025), almost all ministries/agencies have definitely been affected by the cuts, including agencies considered to be Prabowo's "priorities", such as the National Nutrition Agency, the Ministry of Defense, the Indonesian National Police, and the State Intelligence Agency.

Deputy Chairman of the DPR Budget Agency from the Gerindra Party Faction, Wihadi Wiyanto, said that the portion and amount of efficiency that must be carried out by each K/L is determined by Prabowo and the Ministry of Finance, which "stripped down" the K/L budget to unit 9, aka the most detailed spending items.

"The President and the Minister of Finance are conducting a sweep of programs that are considered inefficient. The President does have the authority to make changes to the figures in the ministry because the nomenclature of the ministry in 2024 is different from 2025," said Wihadi.

Regarding the budget reconstruction that was carried out midway, Wihadi said that it had to be done because there was a miscommunication between the Ministry of Finance and each K/L. Initially, the Ministry of Finance only provided guidance in the form of budget values that K/L had to streamline along with the percentage of cuts for certain spending items.

However, in the end the efficiency plan carried out by the K/L did not meet expectations. Finally, a budget reconstruction was carried out to re-arrange the efficiency policy as well as determine spending items that could be cut in detail.

"There was a miscommunication because there was a new K/L who also did not understand. We understand, because the minister is new," said Wihadi.

According to him, for now, all Ministries/Institutions are asked to carry out budget efficiency. However, there is an opportunity to increase the budget if the related agencies need additional funds in the future. "Now everything is being made efficient first. However, later, if the budget is lacking for the related program, it can be communicated again," he said.

In line with Sri Mulyani, he said, there is a possibility that the budget efficiency that is currently being carried out in 2025 will continue until 2026. "Efficiency must continue to be carried out so that programs run by the government can be directed towards the interests of the people," he said.

However, Executive Director of the Center of Economics and Law Studies (CELIOS) Bhima Yudhistira assessed that the government was very wrong in implementing budget efficiency. Efficiency should target non-essential spending. However, in Indonesia, efficiency also cuts the budget for important spending such as public services.

Finally, budget efficiency actually harms the community and becomes a "blunder" for economic growth. "Efficiency is carried out brutally and actually disrupts the government's program itself. Prabowo wants to push economic growth higher, but in many regions, money circulation has actually decreased due to this efficiency," said Bhima.