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View all search resultsBappenas proposes subsidy cut to keep budget in balance in 2025
National Development Planning Minister Suharso Monoarfa sees a possibility that subsidy allocations in the 2025 state budget may be cut under president-elect Prabowo Subianto to reduce government spending.
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Finance Minister Sri Mulyani Indrawati gets ready to brief the press about the state budget in her Jakarta office on April 26, 2024. (JP/Deni Ghifari)
N
ational Development Planning Minister Suharso Monoarfa says there was a possibility that subsidy allocations in the 2025 state budget may be reduced under president-elect Prabowo Subianto to reduce government spending.
Suharso, who in his capacity as minister also heads the National Development Planning Agency (Bappenas), explained that slashing the state’s high subsidy bills was a way to limit the budget deficit.
A budget deficit occurs when the state spends more money than it collects from taxes and other revenue sources. Last year, Indonesia’s state budget deficit came in lower than initially planned at just 1.65 percent of GDP, which was significantly lower than the corresponding figures in other countries of the region, such as Malaysia, Thailand, Vietnam and the Philippines.
Another way to address the issue while avoiding spending cuts was to boost tax revenue, the minister noted.
“We hope the Finance Minister and [House of Representatives] Commission XI will agree that the deficit can be reduced to between 1.5 and 1.8 percent [of GDP],” he said on Wednesday in a meeting with the commission, which oversees financial affairs, as reported by Bisnis.
Suharso said Bappenas would review government programs where spending might be reduced and identify potential cuts in subsidy spending as there were programs that could be trimmed to reduce the deficit, CNN Indonesia reported.
“There are a lot, there are central [government] expenditure [items] where we can make a slight adjustment,” he said.
