TEMPO.CO, Jakarta - Indonesia’s Constitutional Court has limited the government’s authority to change allocations in the 2026 state budget through a presidential regulation without approval from the House of Representatives (DPR).
Therulingcouldaffectfundingforgovernmentpriorityprograms, includingtheFreeNutritiousMeals (MBG) program.
The restriction is contained in Constitutional Court ruling No. 100/PUU-XXIV/2026, which conditionally revised Article 8(5) of the 2026 State Budget Law. If a budget change made through a presidential regulation affects the amount of central government spending by function, the government must first obtain approval from the DPR.
Muhamad Saleh, a researcher at the Center of Economic and Law Studies (CELIOS) and legal counsel for MBG Watch, said government priority programs such as MBG could not be used as a basis for unilaterally changing the direction of state spending, particularly if the changes affect the structure and functions of the state budget or involve fundamental fiscal policy.
“If the changes affect the amount of spending by function or fundamentally alter fiscal policy, the DPR must be involved. MBG may be a government priority program, but the state budget is not the president’s wallet,” Saleh said in a written statement on Thursday, September 17, 2026.
Court Limits Fiscal Discretion
The Constitutional Court also conditionally revised Article 29(1) of the 2026 State Budget Law. The court ruled that the government could not exercise unlimited fiscal discretion even in situations involving threats to the national economy or financial system stability.
Changes to policies concerning state revenue, spending, or budget financing must still receive approval from the DPR, according to the ruling.
Saleh said another change concerns village funds. The court ruled that the central government does not have the authority to determine how village funds are used solely on the grounds of implementing central government policies.
Article 14(1)(b) of the 2026 State Budget Law previously allowed part of village funds to be used as village incentives “and/or to implement central government policies.” The court placed conditions on the provision.
Following the ruling, central government policies involving village funds must be implemented by village governments and directed toward supporting sustainable village development.
What the Court Ruled
The Constitutional Court partially granted petition No. 100/PUU-XXIV/2026, which challenged Law No. 17 of 2025 on the 2026 State Budget. The ruling was delivered at a court hearing at the Constitutional Court building on Wednesday, September 16, 2026.
The court granted challenges to three of the seven provisions under review.
It ruled that Article 8(5), particularly the provision concerning changes to central government spending allocations, is conditionally unconstitutional under the 1945 Constitution. Any change affecting the amount of central government spending by function must be approved by the DPR.
The court also ruled that Article 14(1)(b), specifically the phrase “as village incentives and/or to implement central government policies,” is conditionally constitutional. The provision applies as long as it is understood as village incentives forming part of a central government policy implemented by village governments to support sustainable development.
The court similarly ruled that Article 29(1), which governs the government’s authority to take budgetary policy measures in response to threats to the national economy or financial system stability, is conditionally constitutional as long as such measures are carried out with DPR approval.
The court rejected challenges to Article 9(4), Article 11(2), Article 13(4), and Article 20(1). It found that provisions covering the details of transfers to regions, adjustments to general allocation funds, and special autonomy funds remained constitutional and did not undermine regional fiscal autonomy.
Petition Challenged Seven Provisions
The petition was filed on March 10, 2026, by several organizations and individuals, including Sayogo Institute, the Association of Women's Micro and Small Business Assistance, the Indonesian Consumers Foundation (YLKI), Busyro Muqoddas, Agus Sarwono, and Sabik Muhammad.
They challenged seven provisions in the 2026 State Budget Law: Article 8(5), Article 9(4), Article 11(2), Article 13(4), Article 14(1), Article 20(1), and Article 29(1).
The petitioners argued that the provisions gave the government broad authority to shift, change, and set budget priorities through presidential regulations.
Agus Sarwono, another MBG Watch member, described the ruling as a constitutional warning to the president, arguing that the state budget is an instrument of popular sovereignty rather than solely an instrument of government power.
“When trillions of rupiah are moved from one priority to a National Strategic Project, DPR oversight is no longer a bureaucratic obstacle but a democratic oversight safeguard against unilateral budget misuse,” Agus said.
Another MBG Watch member, Mike Verawati, said the state budget should be formulated based on people’s needs.
“This Constitutional Court ruling also recalls Constitutional Court ruling No. 40/PUU-XXIV/2026, which prohibited the government from taking allocations from education and other budget items,” Mike said.
Tempo contacted State Secretary Prasetyo Hadi for comment, but he had not responded as of publication.
