State Palace: Strong economic fundamentals mean budget cuts not yet needed

State Secretary Minister Prasetyo Hadi has emphasised that Indonesia’s economic fundamentals and fiscal condition remain strong, meaning budget cuts for defence and the police are not yet necessary. Speaking at the Presidential Palace complex in Jakarta on Tuesday, Prasetyo said the possibility of cutting the defence or police budgets would only be pursued if the fiscal situation faced pressure or specific circumstances demanded it. “The possibility. That possibility means if it is needed in a certain situation, maybe it will be done. The results of our evaluation to date, thank God, our economic fundamentals are quite strong,” he said. Prasetyo stated that the government’s fiscal condition, including the state budget deficit position, remains well maintained, so the government does not yet see the need to take such a step. Nevertheless, he said the government continues to follow President Prabowo Subianto’s directive to pursue efficiency in budgets deemed less productive, so that state spending becomes more effective and delivers greater benefits. Finance Minister Purbaya Yudhi Sadewa had previously said the government was open to the possibility of cutting the defence and police budgets if fiscal conditions and the state budget deficit target came under pressure. However, no discussions on reallocating those budgets have taken place to date. The statement aligns with President Prabowo Subianto’s speech, in which he stated the government would continue to pursue budget efficiency and, if necessary, was prepared to reduce the defence or police budgets to support poverty and hunger alleviation efforts. According to Prasetyo, the government’s current focus is on maintaining fiscal health while ensuring that all state spending is utilised effectively to support the implementation of priority government programmes.