President Prabowo Pushes Fiscal Discipline, Targets Rp360 Trillion in Procurement Savings
President Prabowo Subianto emphasized that fiscal discipline must be maintained from the approval of the State Budget to the way every rupiah is spent. The Government is committed to improving the efficiency of state spendings by consolidating government procurement of goods and services.
The statement was conveyed by the President during the Presentation of the Government Statement on the Bill on the State Budget for the 2027 Fiscal Year and its Financial Note at the Plenary Meeting marking the Opening of the First Session of House of the Representatives (DPR) for the 2026–2027 Parliamentary Year, at the at Nusantara Building in the Parliamentary Complex in Jakarta, on Friday (08/14).
“Fiscal discipline must be maintained from the approval of the budget to the way every rupiah is spent,” the President stated.
According to the President, one of the issues that has caused government spending less efficient was the fragmented procurement of goods by ministries, agencies, and regional governments. Goods with similar specifications were purchased by multiple institutions at different prices, resulting in the weakening of the state’s bargaining power.
“We must put an end to the use of the State Budget for uncoordinated purchases of same goods—a practice akin to having thousands of buyers who do not communicate with one another,” he stressed.
The Government, he noted, will implement procurement consolidation by utilizing electronic catalogs, data-driven planning, and best procurement practices. Based on data from the National Public Procurement Agency (LKPP), the consolidation of regional government procurement has yielded efficiency gains of 20.86 percent in 2025 and 25.43 percent projected in 2026.
“This means the efficiency could reach approximately Rp360 trillion per year. We can imagine 20 billion US dollar. This is no small amount. We can achieve many things with Rp360 trillion in our hands,” the President said.
The President further provided the procurement of Interactive Flat Panels (IFP) as a concrete example. Previously, the devices were procured separately by regional governments at around Rp150 million per unit. After being consolidated by Ministry of Primary and Secondary Education, the Government was able to procure the IFP with Rp26 million per unit, which even included delivery and assembly cost to the underdeveloped, frontier, and outermost regions.
To strengthen this policy, the Government planned to upgrade the institutional status of LKPP into a government procurement agency. The President also called for support from the House of Representatives for the initiative as part of efforts to establish a more coordinated and efficient procurement system.
“We will elevate the LKPP status to a Government Procurement Agency. For that reason, we ask for the House of Representatives’ support,” the President stated.
Under the new scheme, the requirements of various ministries, agencies, and regional governments will be aggregated, goods specifications will be standardized, and procurement volumes will be consolidated. The entire process will also be conducted digitally to enhance transparency, competition, and accountability.
The President assessed that savings in government spending would ultimately create greater fiscal room to finance programs that directly benefit the public. Savings from efficiency measures could be allocated to repairing classrooms and schools, renovating community health centers (Puskesmas), building and strengthening hospitals, and providing medical equipment.
“Every rupiah we save means more fiscal rooms to be used for the benefit of the people. More classrooms to be repaired, more Puskesmas to be renovated, more hospitals and medical devices to be provided in all cities, districts, and in turn, for better lives of the people,” the President concluded. (BPMI of Presidential Secretariat) (YA/MMB)
