Purbaya Wants to Cut Ministry/Institution Budgets: No More Submissions

Finance Minister Purbaya Yudhi Sadewa has emphasised that the government will cut budgets for ministries and institutions (K/L), including restricting new budget submissions. This policy is being implemented to maintain fiscal discipline amid global economic dynamics, particularly due to the rise in world oil prices. Purbaya assessed that many ministries have continuously submitted large additional budget requests, necessitating adjustments to keep state expenditure under control. Nevertheless, Purbaya assured that this budget efficiency policy will not disrupt economic growth. The government, he said, will continue to ensure smooth economic activity. “But this won’t go as far as affecting the economy. We also ensure the economy remains stable. I monitor it continuously,” he stated. He explained that the government is currently calculating the scale of budget efficiency to be applied. One scenario under discussion is a cut of around 10 percent from ministry/institution budgets. However, according to Purbaya, this efficiency proposal is not yet final as it is still in the discussion stage. The government is still formulating the final percentage for the budget cut, taking into account the needs of each ministry. “We’re calculating it for all ministries. Initially, we proposed they submit (efficiency) of 10 percent, but when I offered it to them, instead of cutting, they kept adding. So I said I’ll cut it, then they’ll adjust. But the percentage is still being discussed,” he clarified. Previously, Purbaya said he had asked each ministry and institution to prepare simulations of expenditure cuts, including estimating what percentage of the budget could be reduced if fiscal conditions require the government to make adjustments. The budget cut step is prepared as an anticipation if pressures on the State Revenue and Expenditure Budget increase amid rising world oil prices. “We’ve already asked them to prepare, approximately what percentage of their budget will be cut. Then they will adjust their policies based on the cuts from the Ministry of Finance,” he said at the Coordinating Ministry for Economic Affairs on Monday (16/3/2026). According to him, budget efficiency is the first option being considered by the government if global energy prices continue to rise.