Indonesia's Finance Minister Explains 2025 Education Budget Shortfall

Finance Minister Purbaya Yudhi Sadewa has clarified why Indonesia's education budget realization for 2025 is projected to fall below the constitutionally mandated 20 percent of total state expenditure. He attributes the decline not to a reduction in the education sector's nominal allocation, but to significant, unexpected increases in spending for disaster response efforts in regions such as Aceh and Sumatra.

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It is actually designed to be above 20 percent, but when there are disasters in Aceh and other places, everything gets inflated.

Purbaya explained that the initial design for the 2025 state budget included an education allocation exceeding the 20 percent minimum. However, the necessity to fund disaster management efforts inflated overall state spending, consequently reducing the education sector's proportional share. "It is actually designed to be above 20 percent, but when there are disasters in Aceh and other places, everything gets inflated," he stated.

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So, the percentage of the education budget decreased. It has not been fully distributed to the new Ministry of Education yet, and that may be the main reason.

The minister stressed that the situation does not reflect a diminished commitment to education or a reduction in the Free Nutritious Meals program. Instead, he highlighted the fiscal challenge of maintaining the mandatory budget ratio when unforeseen expenses arise. "If I have to add Rp100 trillion elsewhere, the education budget must also increase by 20 percent, right?" Purbaya posed, illustrating the difficulty of absorbing large, sudden allocations for other sectors without impacting the education budget's percentage.

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If I have to add Rp100 trillion elsewhere, the education budget must also increase by 20 percent, right?

He further noted that ministries responsible for education might not always be equipped to absorb substantial additional funding within short timeframes. Purbaya urged that discussions should extend beyond the mere percentage figure, focusing instead on the effectiveness of spending to ensure meaningful improvements in the education sector. The government, he maintained, remains committed to its constitutional mandate and enhancing the impact of educational investments.

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If Rp100 trillion suddenly has to be allocated for disasters, the education budget would also have to increase because of the proportional requirement. That is difficult to anticipate.