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View all search resultsGovt orders more cuts to regional ‘inessential’ spending on flagship programs
Among the non-essential expenditures targeted by the joint circular signed by the finance and home ministers are ceremonial activities, official trips with “non-measurable” outputs and regional grants disbursed to other institutions.
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The Finance Ministry office is seen Dec. 6, 2024, in Jakarta. (Shutterstock/ardiwebs)
T
he central government has ordered all regional administrations to implement more stringent austerity measures in 2026, including by cutting ceremonies and travel allowances, to safeguard funding for President Prabowo Subianto’s flagship programs.
The instruction was underlined in a joint ministerial letter signed on Dec. 9 by Finance Minister Purbaya Yudhi Sadewa and Home Minister Tito Karnavian which outlines legal requirements for spending in next year’s regional budget.
The joint directive stated that general grants, or funds without a designated purpose, must be prioritized to cover mandatory expenditures and support the government’s priority programs.
According to point 4(e) of the circular, the government priority programs include the free nutritious meal program, the Red and White cooperatives program, various subsidies and essential public works projects, such as road and bridge maintenance, public housing and Sekolah Rakyat (community schools).
In the circular, the ministers also targeted nonessential expenditures such as ceremonial activities and official trips with “non-measurable outputs”. Funds initially allocated for such things should be rechanneled for national priority projects, according to the letter.
Regional grants, disbursed to other institutions in the form of cash, goods or services, should also be streamlined.
On the revenue side, the circular encourages regions to optimize their regional original income (PAD). However, it also cautioned that efforts to boost local revenues must not end up stifling the regional economy.
