Indonesia Considers Salary Cuts for Officials Amidst Iran Conflict Economic Concerns
JAKARTA – Facing potential economic fallout from the ongoing conflict involving the United States, Israel, and Iran, several political parties within Indonesia’s governing coalition and cabinet members are discussing proposals to cut salaries for executive and legislative officials as part of broader austerity measures.
President Prabowo Subianto initially raised the idea during a plenary cabinet session on March 13, ahead of the Idul Fitri holiday. He emphasized the need for proactive steps to mitigate growing uncertainty in global energy markets triggered by the escalating tensions in the Middle East.
Prabowo cited austerity measures adopted by Pakistan as a potential model, including salary reductions for officials, the promotion of remote operate policies in both the public and private sectors, and the postponement of non-essential state spending.
Coalition Support for Austerity
The proposal has garnered support from key parties within Prabowo’s ruling coalition. Golkar, which holds the largest number of cabinet portfolios among coalition parties and the second-largest bloc of seats in the House of Representatives, has voiced its willingness to participate.
“If the country requires it, Golkar is ready for its members serving in the cabinet and the legislature to have their salaries cut,” stated Golkar secretary-general Muhammad Sarmuji. He added that such a move would demonstrate the nation’s responsiveness, and adaptability.
Sarmuji also suggested a review of less effective programs and improvements in budget efficiency to achieve meaningful savings, though he did not specify which programs would be targeted.
The National Mandate Party (PAN), with chair Zulkifli Hasan and eight other members in the cabinet, also expressed support for the President’s directive, pledging to actively promote its acceptance among the public and other coalition members.
Opposition Weighs In
The Indonesian Democratic Party of Struggle (PDI-P), the only major party in the House not aligned with Prabowo’s coalition, indicated it did not oppose the plan but insisted that any austerity measures should begin with the highest offices.
“If there are cuts or savings to be made, they should start with the top, from the President and Vice President down to ministers and other state officials,” said PDI-P lawmaker Andreas Hugo Pareira, as quoted by Kontan.
Ministerial Support and Focus on Allowances
Several ministers have also signaled openness to the austerity measures. Human Rights Minister Natalius Pigai publicly stated his willingness to accept a reduced paycheck for the benefit of the nation, even volunteering to forgo his salary entirely.
“I am the poorest minister in the current cabinet,” Pigai wrote on X on March 20. “However, if it is for the greater fine or interest of the people and the nation, […] even if I don’t receive a salary as a minister, I am willing.”
Finance Minister Purbaya Yudhi Sadewa confirmed that the government is reviewing the details of the potential cuts, emphasizing that cost-cutting efforts should begin within government institutions themselves.
Public policy expert Trubus Rahardiansah from Trisakti University suggested focusing on trimming additional allowances rather than base pay, noting that ministers’ salaries represent a small portion of their total compensation. He also advocated for broader cuts across all levels of government, including regional officials and state-owned enterprise executives, to maximize fiscal impact.
Calls for Structural Reform
Rahardiansah further proposed structural reforms, including a temporary reduction in the number of ministries and state agencies – currently totaling 49 under President Prabowo, the largest cabinet since 1966 – as a temporary measure to be reversed once economic conditions improve.
Related reading