Analyst urges state budget evaluation to focus on spending effectiveness
Jakarta (ANTARA) - Public policy analyst Arfianto Purbolaksono is urging that the evaluation of the State Revenue and Expenditure Budget (APBN) should not only focus on the budget absorption rate, but also on the effectiveness of state spending in producing tangible benefits for the public.
According to Arfianto, the criticism from the Indonesian Democratic Party of Struggle (PDIP) faction regarding the realisation of the 2025 APBN serves as important input for strengthening fiscal governance. However, he believes that the measure of the APBN’s success cannot be seen solely from the amount of budget spent.
"The measure of the APBN’s success is not merely how much of the budget has been spent, but whether that spending is capable of producing outputs and outcomes that are truly felt by the community. Budget absorption is only an initial indicator, whereas budget effectiveness is the real measure," Arfianto said in a statement in Jakarta on Friday.
He assessed that APBN management should prioritise the ‘money follows function’ principle, meaning the budget follows the function carried out by the state, rather than simply being spent to meet administrative targets.
"The question that should be asked is not only whether the education budget absorption is high, but whether the budget truly supports improving the quality of education, expanding access, and reducing service disparities. That is where the substance of APBN management lies," he said.
Arfianto reminded that a high budget absorption rate does not necessarily reflect effective policy if it fails to produce real benefits for the public. Conversely, a less-than-optimal budget realisation does not automatically indicate failure if the delay in spending is intended to avoid waste or to ensure programmes are better targeted.
Furthermore, he assessed that the budget deficit also needs to be understood proportionally, as it does not always have a negative impact on the economy.
"A deficit is not automatically bad. Under certain conditions, a deficit is actually needed to maintain economic stability and finance priority programmes that provide long-term benefits. Therefore, what must be assessed is the quality of the financing, not just the size of the deficit figure," he said.
Arfianto also stressed that fulfilling the constitutional mandate regarding budget allocations, including the education budget, must be accompanied by measuring the policy’s impact on public welfare.
"The constitution does not only require that the budget is available, but also that the budget truly works to improve public welfare. Therefore, APBN evaluation must combine fiscal compliance with measuring policy effectiveness," he said.
He invited all stakeholders to build an APBN discourse that is more oriented towards development outcomes.
"The debate on the APBN should not stop at budget absorption figures. What is far more important is ensuring that every rupiah of state money follows the right public function and produces real benefits for the community. In the end, budget absorption is just a number, whereas budget effectiveness is proof that the state is truly working to achieve development goals," Arfianto concluded.