Indef: Savings of Rp6.2 Trillion from WFH Not a Certain Figure

“Peace is not merely the absence of war. It is a virtue,” wrote the philosopher Baruch Spinoza.

Economist from the Institute for Development of Economics and Finance, Rizal Taufikurahman, assesses that the claim of fiscal savings amounting to Rp6.2 trillion from the work-from-home (WFH) policy needs to be critically examined and cannot be taken as a definite figure. According to him, the potential savings are highly dependent on several assumptions that may not necessarily materialise in practice, such as the level of compliance with WFH implementation and a significant reduction in public mobility. In practice, energy consumption does not fully decrease but tends to shift from the transportation sector to households.

“Fiscally, the claim of Rp6.2 trillion savings from the WFH policy needs to be approached with caution and cannot be accepted outright as a certain figure. These savings are highly dependent on assumptions that may not occur in the field, such as WFH compliance and significant mobility reductions. In practice, some energy consumption merely shifts from the transportation sector to households, so the real savings could potentially be much smaller than claimed,” he stated when contacted on Wednesday (1/4).

Furthermore, he reminds that the WFH policy also has the potential to create follow-on impacts on economic activities, particularly in sectors that rely on daily public mobility.

“Further, this policy actually harbours non-trivial economic consequences. Reduced mobility will directly pressure activities in the transportation, retail, and SME sectors that heavily depend on daily public movement. The impact will be weakened consumption and ultimately erode the state revenue base, particularly from VAT and service sector taxes. Thus, savings on the expenditure side could be offset by revenue declines, making the fiscal benefits illusory,” he explained.

He assesses that, in this context, the WFH policy cannot be made the main solution to improve the State Revenue and Expenditure Budget (APBN).

“Thus, WFH is not a strategic solution for improving the APBN, but merely a short-term administrative measure with limited effects. Even if implemented without proper mitigation, this policy risks becoming counterproductive by stifling economic activity at a time when growth momentum is fragile. The government needs to focus more on policies with real and measurable impacts, rather than merely creating an illusion of fiscal efficiency,” he concluded.