Prabowo-Gibran's Mainstay Program Will Be Difficult To Run Due To The Increase In The Ministry's Indicative Ceiling

Prabowo Subianto and Gibran Rakabuming Raka. (Photo: Doc. ANTARA)

The State Revenue and Expenditure Budget (APBN) is expected to be burdened again due to the increase in the addition of the Indicative Ceiling for all ministries/agencies so that the government of the President and Vice President-elect Prabowo Subianto and Gibran Rakabuming Raka will find it difficult to run mainstay programs such as free nutritious meals, IKN development and other PSN.

Head of Bank Permata economist, Josua Pardede, assessed that there will be several impacts on the 2025 State Budget (APBN) if there is an additional Indicative Ceiling for all ministries/agencies if approved.

One of them is the fiscal space for programs from the new president and vice president, which will be narrow in the future.

"In general, during the transitional period of government, sufficient fiscal space is needed to accommodate the elected presidential and vice presidential programs that will only be inaugurated in October, including through the APBN-P in early 2025," he explained to VOI, Thursday, June 13.

Moreover, he said, currently discussions about the priorities for the development of a new government through the National Medium-Term Development Plan (RPJMN) are still in the discussion stage and will only be ratified in early 2025.

Josua said, in addition to causing a limited fiscal space, the addition of the indicative ceiling also has the potential to increase the fiscal deficit.

"If all proposed budget increases are approved and without the re-allocation of ceilings from other ministries and institutions, it is certain that the total budget will increase and without an increase in income, the state budget deficit will widen in 2025," he said.

Meanwhile, regarding the condition of the state budget in the future, Josua assessed that more efforts were needed from the government to be able to increase state revenues to be able to offset future expenses, including through the search for alternative sources of funding and tax reform.

Meanwhile, Director of the Digital Center of Economic and Law Studies (Celios) Nailul Huda said the State Revenue and Expenditure Budget (APBN) would be burdened with a fairly high burden for the government of the elected president and vice president Prabowo Subianto and Gibran Rakabuming Raka in running flagship programs such as free nutritious meals, and the construction burden of IKN and other PSN.

"So the government must save and choose to cut the budget of ministries/agencies that are not very important," he said.

According to Huda, if there is an additional budget for each ministry/institution, the deficit will automatically widen, so that there will be a real threat, namely that the government has a contest that will violate the State Financial Law.

Huda explained, there were several increases in the Indicative Ceiling for all ministries/agencies.

However, there are also several ministries whose budgets have been reduced.

"I see that the reduced indicative ceiling is intended to increase government spending related to special programs that I don't think will be sufficient to be financed only from state revenues," he explained.

Huda said that the Minister of Finance often said that next year, the economy will be increasingly uncertain and will greatly affect state revenue.

Therefore, the tax ratio in 2024 and 2025 is down on target.