Prabowo Administration Eyes $5 Billion in Budget Cuts as Signature Programs Face the Knife

JAKARTA, Investortrust.id — President Prabowo Subianto’s administration is sharpening its fiscal scalpel. On Friday, March 27, 2026, State Secretary Prasetyo Hadi confirmed that the government is finalizing a plan to prune Rp 80 trillion ($5.06 billion) from the state budget (APBN), signaling a new era of austerity for Indonesia’s sprawling bureaucracy.

The efficiency drive is not merely a technical adjustment; it is an ideological stress test for the administration’s most expensive promises. Among the items on the chopping block is the Free Nutritious Meals Program (MBG)—a cornerstone of Prabowo’s campaign platform. To preserve the program’s long-term viability, officials are weighing a proposal to trim the feeding schedule from six days a week to five.

This belt-tightening comes at a critical juncture for Southeast Asia’s largest economy. As global commodity volatility and high interest rates create persistent hurdles, Jakarta is attempting to prove to international markets that it can fund ambitious social safety nets without blowing past its fiscal deficit caps. For investors, the Rp 80 trillion target serves as a litmus test for the administration’s ability to impose discipline on ministries accustomed to expansionary spending.

"I am combing through everything," Prasetyo told reporters following a coordination meeting at the Coordinating Ministry for Economic Affairs in Jakarta on Friday. He indicated that a formal announcement regarding the specific cuts across various ministries and agencies (K/L) is expected by the end of the week.

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Trimming the Flagship

The National Nutrition Agency (BGN), which oversees the meal program, has reportedly proposed the five-day schedule as a primary efficiency measure. Finance Minister Purbaya Yudhi Sadewa noted on Thursday, March 26, that optimizing the MBG program alone could save the treasury as much as Rp 40 trillion ($2.53 billion).

"There is an efficiency in the MBG program," Purbaya said at the Ministry of Finance. "Initial calculations are around Rp 40 trillion—a rough figure, but it could be more." He emphasized that while the frequency of delivery might change, the nutritional quality of the food must remain uncompromised. The final decision rests with President Prabowo, following a briefing from BGN head Dadan Hindayana.

A Three-Stage Strategy

The broader Rp 80 trillion efficiency target will be implemented in three distinct stages. Initially, the Ministry of Finance asked individual departments to suggest their own cuts, but the results were underwhelming. Consequently, the central government has decided to take a more directive approach.

"I cannot rely on the K/L’s own proposals for cuts," Purbaya remarked during a briefing on March 11. "Ultimately, the government will set the limits, and the ministries must adjust." The Minister identified "unclear meetings" and "policies with slow impacts on economic growth" as the primary targets for elimination.

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Remote Work and Strategic Delays

Beyond the meal program, the administration is exploring structural shifts to lower overhead. Coordinating Minister for Economic Affairs Airlangga Hartarto revealed on March 19 that the government is calculating the savings potential of "Work From Anywhere" (WFA) protocols for civil servants.

Minister Sadewa has also urged ministries to postpone expenditures that do not yield immediate economic dividends. This include curbing travel and administrative costs that have long been a fixture of Jakarta’s bureaucratic landscape. Despite the aggressive targets, the Finance Ministry maintains that Indonesia’s fiscal position remains "secure," and that these efficiencies are a proactive measure to ensure the 2026 budget can accommodate new strategic priorities without straining the national debt.