CELIOS Slams Prabowo Subianto's Potential Bloated Cabinet: 'Fiscal Burden Already Excessive'

TEMPO.CO, Jakarta - Center of Economic and Law Studies (CELIOS) believes President-elect Prabowo Subianto’s big cabinet will burden the State Budget and result in a complicated bureaucracy.

The Director of CELIOS, Bhima Yudhistira, responded to the widely spread news of 44 ministerial positions in Prabowo’s cabinet. “Creation of new ministries means additional personnel and goods expenditure,” Bhima told Tempo via telephone call on Thursday, September 12, 2024. “The fiscal burden for institutional expenditures is already excessive.”

Based on Book II of the Financial Note and the 2025 State Budget Bill, the government allocates Rp513.22 trillion for personnel expenditure, up 11.36 percent compared to 2024. Meanwhile, goods expenditure decreases by 27.50 percent from this year’s outlook to Rp342.6 trillion.

Bhima questions Prabowo’s purpose in forming new ministries and governmental agencies, considering his programs could be run under the existing ministries. For example, the free meal program could have been under the Ministry of Agriculture or the Ministry of National Development Planning/National Development Planning Agency.

A bloated cabinet, he said, will complicate coordination and bureaucratic process. He added that the citizens must be careful about Prabowo's plan to split the Ministry of Finance and the State Revenue Agency (BPN). 

"That also does not simplify the bureaucracy, but rather complicates it because income and spending are inseparable,” he said. 

Bhima believes that if the country's economy slows down, then the State Budget should be able to stimulate the economy through incentives or subsidies, not be used to spend on new agencies. 

Prabowo had expressed his optimism to boost Indonesia's economic growth to 8 percent. "This (the addition of ministries or agencies) will actually hinder Prabowo's ambitious economic growth achievement for the next five years," said Bhima.

Indonesia's economic growth currently stagnates at around 5 percent, based on data from the World Bank, the International Monetary Fund (IMF), and the Organization for Economic Cooperation and Development (OECD).

According to data from the Ministry of Finance, the country's tax ratio from 1972-2023 is consistently low and tends to decline, most recently at 10 percent in 2023. State tax revenues are also only 10 percent of Gross Domestic Product (GDP), with the target only being achieved in 2021, 2022, and 2023.

The debt-to-GDP ratio is around 38 percent this year, according to data from the Ministry of Finance, with a three-fold increase during President Jokowi's administration.

NABIILA AZZAHRA

Editor’s Choice: Prabowo's Cabinet to Be Dominated by Professionals, Says Gerindra        

Click here to get the latest news updates from Tempo on Google News