Kadin Indonesia Pledges Support for 3 Million Home Program Despite Ministry Budget Cuts

JAKARTA, investortrust.id – The Indonesian Chamber of Commerce and Industry, or Kadin, has pledged its support for the government's ambitious program to build or renovate 3 million homes, even as the Ministry of Housing and Settlements faces significant budget cuts.

The ministry's 2025 budget was reduced from an initial allocation of Rp 5.2 trillion ($328 million) to Rp 1.6 trillion ($101 million) following a Presidential Instruction on budget efficiency.

"I appreciate Minister Ara with the budget that has been made efficient by the government, but with collaboration, I am sure the results can be achieved," said Kadin Chairman Anindya Bakrie at a press conference at the Kadin Tower in South Jakarta on Thursday, Feb 6, 2025, referring to the minister by his nickname.

"Of course, it is not easy, because the (target) number is very large, 3 million (homes), but this is where Kadin must think for the benefit of the wider community and think about the country."

Anindya added that Kadin will also collaborate with the business community to prioritize the 3 million homes program, in line with President Prabowo Subianto's "Asta Cita" development goals. Asta Cita refers to the eight commitments or aspirations of the Indonesian government under President Prabowo. "

We are also creating industrialization, so that small and medium entrepreneurs can become big," he explained. "This is what makes us very attractive and this (3 million homes program) will be one of our flagship programs as well, how to support the PKP Ministry and Mr. Prabowo's program."

The budget cut for the Ministry of PKP is a result of Presidential Instruction (Inpres) Number 1 of 2025, which mandates budget efficiency in the implementation of the 2025 state and regional budgets. The initial 2025 budget was efficiented for Rp 3,661 trillion (about $231 million) so the remaining budget for PKP ministry is Rp 1,613 trillion.

Minister Maruarar Sirait has not yet detailed any new initiatives following the budget cuts.

The government-wide efficiency measures, totaling Rp 306.69 trillion (about $19.3 billion) from a total 2025 state expenditure of Rp 3,621.3 trillion (about $228 billion), target operational and non-operational spending, including office expenses, maintenance, business travel, government assistance, infrastructure development, and the procurement of equipment and machinery. However, the cuts exclude employee salaries and social assistance spending.

The Ministry of PKP has previously outlined several initiatives to achieve the 3 million homes program within one year. These include proposing the program as a National Strategic Project (PSN), adjusting the funding scheme for the housing finance liquidity facility (FLPP) to a 50:50 split between the government and banks, exempting land and building acquisition tax (BPHTB) in certain regions, and accelerating the building permit (PBG) approval process from 45 days to 10 days.