Financing social protection

Indonesia’s spending on social protection is low for a country at its income level but it has risen significantly in recent years and is emerging as a budgetary priority. This chapter locates social protection spending within broader Government of Indonesia expenditure and identifies how it fits into the intergovernmental budgetary system. It analyses spending on key social protection programmes as well as the spending dynamics of various programmes. It assesses the potential to scale up social protection, particularly the scope for higher levels of tax financing, and concludes by examining the fiscal incidence of taxes and transfers to understand their combined impact on poverty and inequality.