Disclaimer: I am not an economist, a management expert, a finance minister, or a member of Bappenas. But I want to critique these smart people based purely on experience. So, if someone later says, “Well, in theory, it works the way you described, but in practice, it’s different…”—know this: I don’t know the theory. What I’m criticizing is what actually happens on the ground.
The key term I want to discuss is “spending” (serapan). From the moment I first encountered the world of budgeting years ago, this word has been a mantra for government officials. I naïvely asked at the time, “Why is spending the entire budget considered an achievement?”
My boss back then gave me the same answer I’ve since heard from everyone: “The ability to spend the budget reflects good planning.” If a department fails to use its entire budget, it means their planning is poor! The following year, their budget will inevitably be reduced as punishment.
This logic is precisely what fuels the spending frenzy in the final quarter of the year. Hotels are packed with ministry and agency (KL) events. What kind of events? It doesn’t matter what the backdrop says or which ministry is hosting—it’s all the same: BURN THROUGH THE BUDGET.
I heard Hasan Nasbi say on YouTube last night that this is one reason why Prabowo decided to slash budgets. Since ministries and agencies have a habit of “spending” their budgets in ways deemed wasteful by the president and his team, the solution was simple: cut their funding to reduce waste.
To some extent, I agree that this year-end spending spree is a terrible practice. But this is not how you fix it.
The root of the problem isn’t just that funds take too long to be disbursed at the start of the fiscal year (it’s already February, and we’re still arguing about our final budget allocations). The real issue is how budgets are evaluated: through absorption rates.
In this system, spending the budget is synonymous with success. So why wouldn’t ministries and agencies race to deplete their budgets at the end of the year? There’s nothing wrong with it under the current rules!
Here’s my proposal: Change the evaluation metric. Instead of measuring success by absorption rates, assess budgets based on outcomes and impact. Rather than punishing ministries for underspending, we should reward those that meet their targets efficiently—achieving results without exhausting their entire budget.
For example, let’s say the Dean of the Faculty of Dakwah is tasked with securing accreditation for five study programs with a budget of Rp500 million. At the end of the year, the first and most crucial question should be: Were all five programs accredited? If the target was met, then we move to the budget: How much was actually spent to achieve this?
If the dean managed to accomplish the goal using only Rp250 million, they should be praised, not punished for having a 50% absorption rate.
To me, that is the true definition of efficiency—not mindlessly slashing budgets at the start of the year, but using the smallest possible amount of funding to achieve the greatest possible results.
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