The Indonesian government has implemented a drastic 256 trillion rupiah (US$15.76 billion) budget cut for ministries and state agencies, aiming to achieve a total saving of 306.6 trillion rupiah in state funds. These measures are part of the government's broader strategy to address financial challenges in the first of three planned phases. This decision has led to significant budget reductions across various ministries, with wide-ranging impacts on public services and employment.
The Ministry of Public Works announced plans to lay off 18,000 contract employees due to a lack of budget allocation, reflecting the profound impact of these cuts. Additionally, the Ministry of Women's Empowerment and Child Protection has seen its budget nearly halved for 2025, affecting essential services under its purview. Similarly, the Ministry of Communication and Digital Affairs faces a 58 percent reduction in its financial resources, while the Ministry of Primary and Secondary Education's budget has been trimmed by about 25 percent.
The Ministry of Defence is particularly affected, with its 2025 budget slashed by more than half to 50.48 trillion rupiah. Despite these cuts, special staff members at the Ministry of Defence continue to receive significant compensation packages, including monthly salaries and performance allowances.
"Our motivation has plummeted. We just want to do the bare minimum. What really crushes our spirit is the disparity in efficiency measures between higher-ranking officials and (other) staff," said Kardiani, highlighting the frustration among civil servants.
The Ministry of Public Works will also cancel road maintenance programmes covering 47,000 kilometres, further illustrating the extensive scope of these budgetary constraints. Meanwhile, ministries are prioritizing essential expenditures with their reduced budgets, as seen with the Ministry of Women's Empowerment and Child Protection.
"Support services such as victim assistance, outreach, and rehabilitation remain unfunded," stated Arifah Fauzi, emphasizing the challenges faced by the ministry in maintaining critical services.
The Indonesian government plans to utilize 200 trillion rupiah from dividends generated by state-owned enterprises as part of its strategy to manage fiscal constraints. This is set against the backdrop of a government debt that reached 8,680.13 trillion rupiah as of November 2024, with a total debt maturing between 2024 and 2029 amounting to 4,182.5 trillion rupiah.
Despite these challenges, the Indonesian economy is predicted to grow by 4.7 percent in 2025 due to these budget efficiency measures, below the government's target of 5.2 percent.
"Our people, our children, must not go hungry," emphasized Prabowo Subianto, underscoring the government's commitment to ensuring basic needs amidst fiscal adjustments.
Within this complex financial landscape, civil servants express concerns over living conditions and workplace morale. Costs are rising while their earnings remain stagnant, leading to frustrations over unclear directions and rising living expenses.
"If this so-called ‘efficiency’ backfires, it will ultimately be civil servants who pay the price," warned Joanna, voicing concerns about the potential repercussions of the efficiency measures.
"Celebrities should stay in the entertainment industry, not in the government," commented Agus Pambagio, reflecting public sentiment on governance priorities.
As ministries grapple with these financial changes, experts call for strategic reallocations to better serve public interests.
“A blanket approach will undoubtedly have negative consequences. The key is reallocating funds to create a budget structure that better serves public interests,” advised Tauhid Ahmad.
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