Fiscal Policy under the Prabowo Administration Strengthens Equity and Public Purchasing Power
By: Chandra Muhammad Hamzah
Fiscal policy serves as a key instrument to maintain economic stability while ensuring that the benefits of development are distributed evenly across regions. Under President Prabowo Subianto, fiscal policy has emphasized equitable growth, protection of public purchasing power, and the creation of inclusive employment opportunities. This focus is reflected in government spending programs aimed at strengthening the economic foundation of the people and enhancing the capacity of domestic enterprises.
Finance Minister Purbaya Yudhi Sadewa reported that Indonesia’s economy grew 5.04% year-on-year in Q3 2025, despite challenging global conditions, including economic slowdowns in major trading partners. This achievement reflects a stable national economic engine, with domestic consumption maintained, public purchasing power preserved, and businesses able to sustain production activities.
The Minister emphasized that this economic growth is closely linked to effective fiscal management throughout the year. The state budget (APBN) acts as a buffer when global economic pressures increase. Targeted government spending, subsidies for vulnerable groups, and financing schemes supporting productive sectors have helped maintain the competitiveness of domestic businesses while safeguarding household purchasing power.
Equity in fiscal distribution among regions remains a central concern. Bursah Zarnubi, Chairman of the Association of Indonesian Regency Governments (APKASI), highlighted the ongoing effort to advocate for fair fiscal policies that empower local governments. Many regencies face limited fiscal space due to low local revenue and inflexible mandatory expenditures. APKASI’s advocacy focuses on creating a more equitable fiscal structure and gradually increasing financial autonomy for local governments, enabling them to design and implement programs tailored to local needs.
From an academic perspective, economist Gede Sandra observed that the fiscal approach under Minister Purbaya reflects a strong pro-people economic orientation. Policies prioritize boosting purchasing power among the lower- and middle-income population, expanding access to finance for micro and small enterprises, and enhancing protection for the workforce.
Gede also highlighted the provision of Rp 200 trillion in liquidity to reduce interbank interest rates. This policy has begun to stimulate credit growth, which previously slowed due to global uncertainty. The rebound in credit indicates positive momentum for businesses, enabling expansion and financial stability, and contributing to inclusive national economic growth.
Overall, government fiscal management under this administration demonstrates a balance between macroeconomic stability and social welfare. The government recognizes that pursuing economic growth alone is insufficient; it must also deliver equitable benefits to all citizens, not just select groups.
The success of fiscal policy should therefore be measured not only by growth figures or fiscal balances but also by the tangible impact on public welfare. Public support is crucial for sustaining progressive, equity-oriented fiscal policies.
At this point, all elements of society are encouraged to support fiscal policies that prioritize equity and social justice. Through collaboration, shared understanding, and active public participation, Indonesia can achieve inclusive and sustainable development, with fiscal policy serving as a bridge toward equitable prosperity for all.
— The author is an Observer of Economic Policy.
