Japan’s new prime minister signals bold reform as Indonesia weighs its own efficiency drive.

Japan’s newly elected Prime Minister Sanae Takaichi has drawn global attention with a symbolic yet meaningful proposal: cutting her own salary and that of her cabinet to reinforce the country’s commitment to fiscal reform. As Indonesia pursues its own efficiency agenda, the question emerges—should Jakarta follow Tokyo’s example?

Japan’s New PM Pushes Symbolic Fiscal Reform

Less than a month into office, Prime Minister Sanae Takaichi moved to revise Japan’s public remuneration law, aiming to cut salaries for all cabinet members, including herself. The plan—discussed during an extraordinary parliamentary session—reflects long-standing calls from her Liberal Democratic Party (LDP) and new coalition partner Nippon Ishin no Kai to reduce parliamentary privileges.

At present, Japanese lawmakers earn around 1.29 million yen (Rp140 million/SGD 11,200) per month, while cabinet ministers receive 489,000 yen (Rp53 million/SGD 4,240) in additional allowances. Takaichi already returns 30% of her additional pay, and ministers return 20%, effectively reducing their allowances to 390,000 yen (Rp42 million) and 110,000 yen (Rp12 million) per month. Reform advocates praised the move as “extraordinary,” although critics argue that it sends a deflationary signal at a time when Japan is trying to raise household incomes.

Indonesia’s Efficiency Drive Under Prabowo

The debate resonates in Indonesia, where President Prabowo Subianto has instructed nationwide spending cuts through Inpres No. 1/2025 on Budget Efficiency. The policy restricts travel budgets for governors, mayors, and regents while targeting a Rp306.69 trillion reduction across the 2025 APBN and APBD. The first two phases of the efficiency program surpassed expectations, saving Rp308 trillion by February 2025.

A third phase aims to draw Rp300 trillion in dividends from state-owned enterprises (BUMN)—Rp200 trillion for the state budget and Rp100 trillion as capital reinforcement for BUMN. In total, Prabowo claims to have secured Rp750 trillion in potential savings, framing efficiency as both an economic safeguard and an anti-corruption effort.

The Challenge of a “Fat Cabinet”

Despite efficiency goals, Indonesia continues to face criticism over the size of its cabinet. The current structure includes 48 ministries with 109 ministers and deputy ministers, leading to concerns about ballooning operational costs. FITRA estimates that such a large bureaucracy could increase personnel spending by 20–30%, not only due to salaries but also allowances and operational needs.

Comparisons further sharpen public debate. Under former President Jokowi, a cabinet of 34 ministers and 17 deputy ministers reportedly cost Rp387.6 billion per year. Under Prabowo, projections nearly double to Rp777 billion, reinforcing skepticism about whether efficiency is truly being prioritized.

Symbolism vs. Structural Reform

Analysts argue that Japan’s salary cuts represent moral leadership rather than fiscal impact. FITRA’s Badiul Hadi stresses that trimming ministerial pay will barely affect Japan’s public finances, but it creates ethical pressure to reform deeper inefficiencies.

Indonesia is in a similar position. Data shows that high-level officials’ salaries represent less than 0.1% of Indonesia’s Rp3,621 trillion national budget. A 30% pay cut for top officials would save only around Rp600 billion—a fraction of the country’s annual Rp500 trillion deficit.

Still, the symbolic value remains powerful. As economist Achmad Nur Hidayat notes, fiscal morality begins at the top: leaders who demonstrate personal sacrifice set the tone for broader institutional efficiency.

Targeting the Real Sources of Waste

Experts agree that Indonesia’s greatest inefficiency does not lie in salaries but in operational spending. Funds for travel, meetings, honorariums, ceremonies, building rentals, and consultancy fees remain major leak points. The government’s plan to trim 15 types of expenditure starting in 2026 is seen as a more impactful step toward structural reform.

Ministerial and bureaucratic privileges—vehicles, facilities, overseas trips, and layered allowances—also require tighter scrutiny. Without correcting these foundational issues, salary cuts alone would be little more than political theater.

Lessons From Tokyo

Japan’s approach demonstrates that reform begins with example-setting before cascading into systemic change. Indonesia can embrace the same spirit by:

• Strengthening oversight of non-productive spending
• Reducing bureaucratic redundancy
• Eliminating dual salaries for civil servants
• Reforming allowances and facilities
• Ensuring public transparency in efficiency gains

The goal is not mere frugality, but ethical, transparent, and responsible use of public funds—a principle relevant not only for Indonesia but also for neighbouring economies like Singapore dealing with similar public expectations.

Japan’s symbolic cabinet pay cut highlights the power of moral leadership in shaping public trust. While Indonesia’s fiscal challenges differ, the underlying lesson remains universal: efficiency must be structural, transparent, and ethically grounded. For both Indonesians and Singaporeans observing regional governance trends, the push for responsible public spending reflects a broader call for integrity and accountability in leadership.

Sources: Tirto.id (2025) , CNN Indonesia (2025)

Keywords: Sanae Takaichi, Cabinet Salary Cuts, Indonesia Efficiency, Fiscal Policy, Public Spending Reform