The current economic situation in recent weeks reflects the accumulation of persistent problems: inequality, unfair taxation, inefficient spending, and the government’s ballooning debt. Real and implementable solutions are urgently needed to address the challenges faced by Indonesia’s middle- and lower-income groups. CELIOS calls for a Reset of Indonesia’s Economy through eight key policy demands aimed at restoring public trust, strengthening the state budget (APBN), and protecting household purchasing power.
On the ground, fiscal pressures are mounting while household consumption weakens, and public perception of state spending accountability continues to deteriorate. CELIOS therefore asserts that the fiscal helm—namely, the Minister of Finance—must be immediately replaced. Additionally, the planned increase in parliamentary allowances should be revoked, lawmakers’ salaries should be capped at no more than three times the Jakarta minimum wage (UMP), an Independent Remuneration Committee for state officials must be established, and members of parliament should disclose their recess funds as public information.
Bhima Yudhistira, Executive Director of CELIOS, emphasized that tax injustice must be addressed swiftly. “The government must expand fiscal space without suppressing household consumption. For this reason, CELIOS consistently pushes for the implementation of a Wealth Tax and the acceleration of the Asset Forfeiture Bill so that assets from economic crimes can be recovered,” Bhima said.
He added that a complete overhaul of the current tax regime is essential, including lowering the Value Added Tax (VAT) to 8% as a direct stimulus for SMEs and middle- to lower-income households. This measure aims to strengthen a progressive revenue base and cushion the decline in domestic demand.
On the spending side, CELIOS calls for cutting non-priority state budget allocations, including tighter oversight of police expenditures, and conducting a full review of funding for MBG, Koperasi Desa Merah Putih, and Danantara. Savings from these cuts should be redirected toward direct cash transfers for vulnerable groups to ensure swift and measurable impact. To uphold fiscal discipline, CELIOS also urges debt restructuring (adjustment of tenor/coupon) and a moratorium on new debt issuance until fiscal space indicators improve.
To eliminate conflicts of interest and governance leakages, the government must enforce the Constitutional Court’s ruling prohibiting ministers and deputy ministers from holding concurrent positions, particularly in investment and downstream sectors linked to entities such as Danantara. Furthermore, National Strategic Projects such as the new capital city (IKN) and the Food Estate initiative should be halted as they burden state finances.
Media Wahyudi Askar, Director of Fiscal Justice at CELIOS, added that Indonesia’s tax regulations require a comprehensive overhaul. Taxes paid by state officials must be made public as a measure of accountability, enabling citizens to evaluate whether their declared wealth aligns with their tax contributions.
“Moreover, the surge in cabinet members’ wealth under the Prabowo-Gibran administration highlights the dominance of the ultra-rich in government. The median wealth of ministers now stands at IDR 55.1 billion—almost 50 percent higher than the previous cabinet. Currently, the median wealth of the Prabowo-Gibran Cabinet is 671 times greater than that of the median Indonesian citizen,” Media noted.
CELIOS also highlights severe inequality within law enforcement institutions, where the salaries of top officials can exceed those of lower-ranking staff by more than 20 times. This disparity becomes even more pronounced when considering the additional assets amassed by senior officials beyond their basic salaries.
Nailul Huda, CELIOS Director of Economics, stressed that the erosion of the middle class and the government’s repeated failure in tax collection clearly signal the need to reset Indonesia’s economy. “Indonesia’s middle class bears the burden of paying taxes but reaps little benefit from them. As a result, their numbers are shrinking over time. Meanwhile, the government has failed to effectively collect taxes from society,” Huda concluded.
For more information, please visit www.celios.co.id or contact Galau
(email: galau.muhammad@celios.co.id)
