Budget Efficiency Must Consider the Health of Spending by Ministries/Institutions and Regions

Jakarta (ANTARA) - Executive Director of the Center of Economics and Law Studies (CELIOS), Bhima Yudhistira, stated that the government’s ongoing budget efficiency policy must consider the health of spending by ministries/institutions (K/L) and regional governments. When contacted by ANTARA in Jakarta on Friday, Bhima explained that careless budget cuts could pose risks to the economy, particularly as cuts should not be applied to essential spending items, such as education and health. “If regional budget efficiency leads to the termination of contracts for PPPK (Government Employees with Work Agreements), the risk of economic disruption will increase. Or public services will decline sharply, accompanied by problems in infrastructure quality. This contradicts efforts to attract investment,” he clarified. He assessed that last year’s budget efficiency policy had limited the flexibility of regional spending reallocations. Meanwhile, K/L spending, although there is still room for cuts, must be calculated carefully to ensure efficiency does not disrupt performance. Bhima reminded that budget efficiency policies need to be based on transparent fiscal studies. Moreover, several priority programmes with large allocations are not affected by the efficiency policy. “The public can also assess why allocations for MBG (Free Nutritious Meals) and the Red and White Village Cooperatives are not subjected to efficiency first before increasing efficiency in other spending items,” he said. “There must be an open fiscal risk study to the public based on moderate and worst-case scenarios,” Bhima added.