PRESIDENTIAL INSTRUCTION NUMBER 1 OF 2025 BUDGET EFFICIENCY FOR OPTIMIZING PUBLIC SERVICES
On January 22, 2025, President Prabowo Subianto issued Presidential Instruction Number 1 of 2025, focusing on expenditure efficiency in the implementation of the State Budget (APBN) and Regional Budget (APBD) for the 2025 Fiscal Year. Through this instruction, the government targets savings of Rp306,695,177,420,000.00 (three hundred six trillion six hundred ninety-five million four hundred twenty thousand rupiahs), with details of Rp. 256,100,000,000,000.00 (two hundred fifty-six trillion one hundred billion rupiahs) from ministry or agency expenditures and Rp. 50,595,177,420,000.00 (fifty trillion five hundred ninety-five billion one hundred seventy-seven million four hundred twenty thousand rupiahs) from transfers to regions.
Instructions for Ministers and Heads of Institutions Identify Efficiency Plans Review operational and non-operational expenditures, including office operational expenses, maintenance, official travel, government assistance, infrastructure development, as well as procurement of equipment and machinery. The identification of efficiency plans does not apply to employee expenditures and social assistance.
Instructions for Governors, Regents, and Mayors Restrictions on spending to reduce ceremonial activities, studies, comparative studies, printing, publications, focus group discussions, and reducing travel expenses by 50%. Governors, Regents, and Mayors have also received instructions from President Prabowo Subianto to limit honorarium spending by restricting the number of teams and the amount of honorarium based on the Presidential Regulation on Regional Standard Unit Prices, reducing expenditures that are supportive in nature and do not have measurable outputs, allocating budgets based on public service performance targets rather than equal distribution among regional agencies or previous budget allocations, being more selective in granting aid to Ministries or Institutions, and adjusting the 2025 fiscal year regional budget (APBD) sourced from transfers to regions.
Instructions for the Minister of Finance Set adjustments to the allocation of transfers to regions for the 2025 Fiscal Year derived from revenue-sharing funds, general allocation funds designated for public works, physical special allocation funds, special autonomy funds, Yogyakarta Special Region privilege funds, and village funds.
Instructions for the Minister of Home Affairs Monitor the implementation of expenditure efficiency by regional governments and take necessary steps to ensure efficient management of the APBD.
Presidential Instruction Number 1 of 2025 underscores the government’s commitment to optimizing budget utilization to enhance the quality of public services and ensure more efficient state financial management.