Indonesia’s Shadow Cabinet Criticizes Prabowo’s Budget, Economic Policies

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Shadow Cabinet Voices Concerns Over Economic Direction Under Prabowo Administration

Indonesia’s Shadow Cabinet has raised multiple objections regarding economic management and budgetary decisions during the current administration led by President Prabowo Subianto. Bhima Yudhistira, serving as the Shadow Cabinet’s Minister of Finance and Budget Governance, pointed out that public funds are frequently allocated without proper consideration or systematic planning.

According to Bhima, these financial resources ultimately originate from taxpayers across the nation. He expressed serious doubts about whether adequate accountability mechanisms exist within the current budget management framework under the new government leadership.

Questionable Program Implementation Without Adequate Testing

The criticism extends to several populist initiatives that were launched without sufficient preliminary research or pilot testing. Among these are the free nutritious meal program and the establishment of red and white village cooperatives throughout rural areas.

“Starting from populist programs without research and pilot projects such as free nutritious meals and the red and white village cooperatives,” said Bhima when contacted on Saturday, July 18, 2026.

Bhima emphasized that Purbaya Yudhi Sadewa, currently serving as Finance Minister, must thoroughly evaluate the viability of every government-backed initiative before implementation. Since these programs consume both taxpayer money and national borrowing capacity, their success depends on careful planning rather than political expediency.

“If it’s not feasible, don’t become a ‘yes man’,” said the Executive Director of the Center of Economic and Law Studies.

Fiscal Responsibility and Budget Freezes

The Shadow Cabinet representative stressed that a finance minister must possess the courage to halt budget allocations when programs prove unviable. This principle should apply even to established mechanisms like the Surplus Budgetive Balance designated for Bank Himbara institutions, particularly when broader fiscal challenges remain unresolved.

“As a finance minister, one should know the right rules of the game,” he said.

Beyond budget management, Bhima identified a pattern of economic policies that appear to cannibalize rather than strengthen the private sector. The nutritious meal initiative, for instance, has inadvertently displaced local canteens and small-to-medium enterprises operating near educational institutions.

Similarly, the village cooperative program functions as a retail competitor rather than supporting existing commerce. These government-established cooperatives directly challenge private stores and distributors handling subsidized products, creating an uneven playing field.

“The economic pie doesn’t grow, instead there is state capture by the elites who make policies contrary to Article 33 of the 1945 Constitution,” said Bhima.

Tax Policy Shortcomings and Their Impact

Another significant concern involves insufficient innovation in how the state treasurer manages public revenue. This stagnation creates risks for economic contraction, particularly affecting lower-income households.

Bhima noted that tax policy has remained largely unchanged, with authorities failing to implement progressive taxation measures targeting wealthy individuals and windfall profits. Meanwhile, adjustments to income tax (PPh) have disproportionately burdened smaller businesses and working-class citizens.

“There is no significant change in tax policy, not daring to pursue large taxpayers through progressive taxes such as windfall profit tax and wealth tax,” he said.

The previous year’s tax buoyancy rate of negative 0.12 illustrates this problem clearly. This figure indicates that despite economic growth of one percent, tax collections actually declined by 0.12 percent. Bhima warned that continuing this approach would generate frustration among middle-class families and small business owners while the overall tax-to-GDP ratio remains stubbornly low.

Recommended Policy Corrections

Bhima outlined several areas requiring immediate attention. The first involves eliminating budget waste, particularly through freezing expenditures related to the MBG project. He argued that the campaign promise has not achieved its primary objective of reducing stunting rates because the Rp268 trillion allocation far exceeds what is necessary.

“It only needs Rp10 trillion per year, not Rp268 trillion,” he said.

Additional recommendations include restoring efficiency to regional budgets, which Bhima believes have triggered excessive local taxation. The government must also reform subsidies for public transportation and energy to ensure citizens receive these essential services at appropriate quality levels.

Finally, Bhima called for resolving the high-speed rail financing issue without further straining public funds. He urged the administration to eliminate counterproductive regulations, strengthen progressive taxation, close existing loopholes, and maintain appropriate boundaries between fiscal and monetary policy decisions.

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