By: Adi Hertanto )*
Fiscal stability and resilience are the primary foundations for a country to achieve sustainable and inclusive development. Amidst uncertain global economic dynamics, Indonesia has demonstrated decisive action in strengthening its fiscal foundations as a key to driving national economic growth. This strengthening is not limited to efforts to reduce the deficit and maintain the debt ratio, but also ensures that every rupiah spent by the state has a productive impact on society.
Over the past few years, Indonesia’s fiscal policy direction has focused on structural economic transformation. This approach is evident in the government’s budget allocations to strategic sectors such as infrastructure, education, health, and downstream industries. These steps not only strengthen national competitiveness but also create a multiplier effect for regional economies. Thus, every fiscal policy implemented is directed towards creating sustainable added value, expanding employment opportunities, and reducing disparities between regions.
Finance Minister Purbaya Yudhi Sadewa stated that Indonesia’s fiscal policy has begun to move in a style that could be called “acrobatic,” not in the sense of recklessness, but rather the ability to maintain balance amidst conflicting pressures: the need for growth, demands for stability, and the limits of the country’s fiscal capacity.
Furthermore, strategies to increase state revenue are also a crucial part of strengthening the fiscal foundation. Tax reforms continue to be intensified to create a fairer, more transparent, and more efficient system. Through the implementation of the Tax Regulation Harmonization Law (HPP) and the optimization of the digitalization of the tax system, the government is striving to broaden the tax base without burdening businesses. Furthermore, increased voluntary taxpayer compliance is one indicator of the success of these reforms. A technology-based approach and user-friendly public services are expected to strengthen public trust in the national tax system, which in turn strengthens the country’s fiscal capacity.
A strong fiscal policy is also reflected in the government’s ability to maintain budget discipline amidst various pressures. Post-pandemic, Indonesia has succeeded in gradually reducing the state budget deficit without sacrificing productive spending that reaches priority sectors. This step demonstrates the firm direction of fiscal policy, which is oriented not only toward short-term recovery but also toward solid long-term economic development. Debt management is also carried out carefully, considering sustainability and repayment capacity. With a debt-to-GDP ratio maintained below a safe limit, Indonesia has sufficient fiscal space to anticipate various future global risks.
Meanwhile, Public Policy Observer Muhammad Gumarang stated that Finance Minister Purbaya Yudhi Sadewa’s move to regulate regional government funds held in deposits at regional banks is an appropriate and bold policy. He believes this policy will strengthen fiscal discipline while simultaneously encouraging optimal budget absorption in the regions.
In the context of national development, strengthening the fiscal foundation plays a crucial role as a driving force for various priority government programs. For example, industrial downstreaming, food security, the green energy transition, and accelerating development in underdeveloped regions all require strong and sustainable fiscal support. Without thorough fiscal planning, these programs struggle to achieve optimal impact. Therefore, the government emphasizes the importance of spending efficiency and improving the quality of budget planning so that each program truly provides tangible benefits to the community.
In addition to strengthening macroeconomic aspects, the government also pays attention to the social dimension of fiscal policy. Through various social protection programs such as cash assistance, targeted energy subsidies, and community economic empowerment programs, fiscal policy serves as an instrument for maintaining people’s purchasing power while reducing poverty. This aligns with the spirit of equitable development, which is the foundation of the Advanced Indonesia vision. A healthy fiscal system is not just about numbers and a balanced balance sheet, but also about the state’s ability to protect its citizens from economic shocks and ensure that every citizen has the opportunity to grow.
Furthermore, collaboration between the central government, regional governments, and the private sector is a crucial element in maintaining fiscal resilience. Strengthening fiscal coordination and efficient budget decentralization will accelerate equitable economic development across Indonesia. The government andIndonesia is expected to utilize transfer funds more productively through innovations in local revenue (PAD) and asset management focused on improving public welfare.
Given the current policy direction, Indonesia’s economic future looks increasingly promising. A solid fiscal foundation is the mainstay for achieving stable economic growth above 5 percent, and even higher in the medium term. With prudent and development-oriented fiscal management, Indonesia can maintain investor confidence, reduce dependence on foreign debt, and increase national economic independence.
Overall, strengthening the fiscal foundation is not merely a technocratic policy effort, but part of a broader strategy to strengthen the nation’s economic sovereignty. When the state’s fiscal resources are managed wisely, fairly, and in a way that favors the people, economic growth becomes more than just a number, but a concrete path to shared prosperity. The government has taken the right path, building a strong, adaptive, and sustainable fiscal foundation as the foundation for achieving Indonesia Emas 2045.
People’s Economy Observer based in Yogyakarta
