Indonesia Considers Budget Cuts Amid US-Israel-Iran Tensions

Indonesian Politician Proposes Government Spending Cuts Amid Geopolitical Uncertainty

Jakarta – Chairman of the Second Commission of the Indonesian House of Representatives, Rifqinizamy Karsayuda, has proposed efficiency measures across a number of government programs in response to the volatile geopolitical situation stemming from the conflict involving the United States, Israel, and Iran.

Karsayuda’s statement came as a reaction to plans reportedly under consideration by President Prabowo Subianto to reduce the salaries of members of the DPR, ministers, and vice ministers, a move the politician characterized as a positive signal.

“It’s not just salary cuts that are needed, but also making existing government budgets more effective and efficient,” Karsayuda said, according to reporting by CNN Indonesia on March 25, 2026.

The NasDem Party politician believes the proposed salary reductions signal a need for preparedness in the face of global economic instability caused by ongoing conflicts in the Middle East. He argued that the government should not only focus on cost-cutting but also ensure that all budget allocations are used appropriately.

“Ensuring that the budget has clear outputs and outcomes for development activities… that, in my view, is very positive,” Karsayuda stated.

He suggested that implementing salary cuts wouldn’t necessarily require legislative revisions, and could instead be enacted through a Presidential Regulation (Perpres) or a regulation from the Ministry of Finance.

However, Karsayuda cautioned that any efficiency measures should not impede public services. “The most important thing is that everything is managed well, transparently, accountably, and, most importantly, efficiency must target the right areas,” he said.

President Subianto initially raised the possibility of salary reductions during a cabinet meeting on March 13, 2026, also suggesting potential fuel consumption savings, citing similar measures taken by Pakistan, including a shift to remote work.

According to reporting from March 17, 2026, State Secretary Prasetyo Hadi indicated that the government was beginning a more in-depth review of the proposal to cut salaries for ministers, cabinet members, and DPR representatives. While Indonesia’s national fuel reserves are currently considered secure, Hadi emphasized the need for all parties to use the situation as an opportunity to implement cost-saving measures.

“It will start with elements of the government, ministries, and agencies. There are many things that can be done to reduce fuel consumption, for example, how we migrate to public transportation, how we reduce or limit the use of official vehicles,” Hadi said.

Born on November 6, 1982, in Hulu Sungai Tengah, South Kalimantan, Rifqinizamy Karsayuda previously served as a member of the House of Representatives from 2019 to 2023 and again beginning October 1, 2024. He is a member of the NasDem Party and currently serves as Presidium of the National Council of the Korps Alumni Himpunan Mahasiswa Islam (KAHMI) for the 2022-2027 period.