2027 State Budget: Ensuring Every Rupiah is Meaningful for the People

The State Budget (APBN) is more than just a collection of figures. Behind the Rp4,106.3 trillion in state expenditure in the 2027 APBN lies the lives of more than 280 million Indonesians with diverse needs and expectations. There are families hoping rice prices remain affordable, farmers requiring fertiliser and price certainty, workers desiring better incomes, youths seeking their first jobs, parents hoping their children can continue their education, small business owners in need of capital, and families wishing to access healthcare without depleting their savings when a member falls ill.

To ensure all these expectations can be measured and their progress tracked—so they do not remain mere absurd narratives—we have agreed on figures to measure economic growth and improvements in public welfare. Economic growth is targeted at 6 per cent, the poverty rate is aimed to drop to 6-6.5 per cent, the open unemployment rate to 4.30-4.87 per cent, the Gini ratio to 0.360-0.365, and the creation of approximately 2.57 million to 3.49 million new jobs.

These figures carry one important message: growth must not proceed in isolation. Growth must be accompanied by equality, job creation, and increased welfare so that national economic progress is truly meaningful for the lives of the people.

Behind the significant budgetary requirements, the 202nt APBN carries responsibility. The government must be able to meet the state revenue target of Rp3,435.1 trillion, while simultaneously managing the risk of an APBN deficit of Rp671.2 trillion, equivalent to 2.4% of GDP. The House Budget Committee (Banggar DPR) hopes that fiscal discipline must be maintained, because every rupiah of state revenue that is not achieved carries a message: the deficit could potentially grow larger, or planned expenditure targets may be forced to be cut.

Both options carry their own consequences. If the APBN deficit rises, it means the obligation to incur new debt will increase. In the next episode, the burden of interest and principal payments will become larger in the future. As an illustration, in 2015, debt interest obligations cut 10 per cent of state revenue; in 2026, this rose to 19 per cent, and it has the potential to continue rising if the deficit target cannot be kept lower.

If the option is to cut state expenditure, then part of the hopes placed on the APBN, along with all its economic and social targets, will need to be recalculated. Therefore, the effort to achieve the state revenue target is equivalent to an economic jihad for the nation.

Rp539.7 Trillion to Protect the Poor

The 2027 APBN provides an allocation of Rp539.7 trillion for social protection. The magnitude of this figure demonstrates that economic growth must go hand in hand with protection for the most vulnerable members of society. When families face price pressures, job losses, illness, or other economic conditions, the state must not allow them to sink further into poverty.

However, the size of the budget must be matched by precision in targeting. The issues of inclusion error and exclusion error should not be viewed merely as administrative matters. We must ensure that the people who should receive assistance do not fail to receive it. Improvements and updates to the socio-economic database must continue so that subsidies and social protection are increasingly well-targeted.

A single data error might only appear as one line among millions of government data points. For a poor family, that error could mean food assistance not received, children’s educational needs unmet, or healthcare expenses postponed. Precision in targeting, therefore, is not merely a matter of budget efficiency, but a matter of justice. Every rupiah that can be saved from ineligible recipients must be returned to those truly in need or used to strengthen productive programmes that help them become more self-sufficient.

Social protection must also be increasingly directed towards empowerment. The state must be present when the people face difficulties, but the strongest support is when such protection simultaneously paves the way for people to escape vulnerability. Assistance keeps people from falling, while education, employment, business financing, and economic opportunities provide the ladder for them to move up.

Rp824 Trillion to Pave the Way for Upward Mobility

The 2027 APBN allocates Rp824 trillion for education. Such an amount must be allocated as an investment to improve the quality of human resources while breaking the intergenerational cycle of poverty. Education is one of the most powerful paths for a child to have a better economic future than their parents.

The success of the education budget cannot be measured solely by the absorption rate of the funds. The measure is whether Indonesian children can more easily access quality education, whether school dropout rates can be suppressed, whether teacher quality improves, whether graduates are better aligned with the needs of the workforce, and whether children from low-income families have the opportunity to pursue education as far as their abilities allow.

A labourer’s child must have the opportunity to become an engineer, a farmer’s child must have the opportunity to become a doctor, and a fisherman’s child can become a researcher, entrepreneur, or technology expert. A family’s economic capability should not be a wall that determines how high an Indonesian child may aspire. It is there that the Rp824 trillion education budget gains a meaning far greater than mere numbers in the APBN. Education must be an instrument of social mobility that allows the people to move up the social ladder.

Investment in education becomes increasingly important as economic structures change rapidly. Indonesia is pushing for industrialisation, downstreaming, digitalisation, and increased productivity. Infrastructure…