Jakarta. A proposed increase in housing allowances for members of the House of Representatives (DPR) has drawn fierce criticism, highlighting tensions between legislative perks and the country’s persistent economic inequality.

Executive Director of Core Indonesia Mohammad Faisal warned that Indonesia’s recently reported Gini ratio of 0.375, released by the Statistics Indonesia (BPS) in March 2025, fails to fully capture the depth of wealth disparity across the nation.

“Measured by wealth, asset ownership, or income, inequality is far greater than the Gini ratio suggests,” Faisal said on the Investor Daily Talk program on Beritasatu TV, Friday.

Faisal pointed to urban areas as the epicenter of the nation’s inequality. “The gap between rich and poor in cities is much wider than in rural areas. This is not unique to Indonesia; it’s a global pattern,” he said. With roughly 60 percent of Indonesians living in cities, he added, slow progress in reducing urban inequality is a pressing concern.

Urban residents face multiple economic pressures, Faisal said, from unemployment and housing shortages to a rising wave of layoffs. “Job cuts have increased in recent years, especially in manufacturing, trade, and the digital sectors, while rural agriculture remains relatively stable,” he said.

Faisal cautioned against relying on a single metric to assess economic health. “Inequality is not just about the Gini ratio. Employment trends, layoffs, formal versus informal work, wage levels, and poverty rates are all interlinked,” he said.

Critics say the DPR’s plan to convert official housing into a cash allowance of Rp 50 million ($3,200) per month for lawmakers is tone-deaf amid these challenges. Faisal described the proposal as contradictory to the country’s weakening economy.

“DPR salaries come from the state budget. As of May 2025, APBN revenue totaled Rp 995.3 trillion, down 11.4 percent from the same period in 2024,” he said. Faisal said major revenue sources --taxes and value-added taxes-- have fallen sharply, underscoring the need for fiscal restraint.

“In this climate of declining revenue, government spending should be more efficient,” Faisal added, calling the allowance increase “out of step with the government’s efficiency drive.” He also highlighted declining real wages in both agriculture and manufacturing, stressing that a DPR pay hike undermines social fairness.

Faisal acknowledged that cutting lawmakers’ salaries is politically difficult. “The more realistic approach is to freeze increases for both salaries and allowances. Public officials can demonstrate fiscal sensitivity by postponing such hikes,” he said. He emphasized that improving legislative performance should take precedence over securing extra perks.

The debate comes as President Prabowo Subianto’s administration seeks fiscal space for key priority programs, making disciplined public spending crucial. “Budget discipline is essential to ensure funds are used for productive and public-oriented purposes, not merely to benefit a select few,” Faisal said.

House Speaker Puan Maharani defended the allowance, citing rising Jakarta rents and the return of official residences in Kalibata and Ulujami to the government. “The housing allowance has been carefully considered based on conditions and prices in Jakarta,” she told reporters Thursday. Puan added that evaluations would continue in the spirit of transparency.

Some lawmakers, including Deputy Speaker Adies Kadier and Gerindra’s Abdul Wachid, argued that Rp 50 million per month is reasonable, saying that local rents near the DPR can exceed Rp 70 million. Meanwhile, public criticism intensified after Nasdem Party lawmaker Nafa Urbach defended the allowance on Instagram, prompting her to close comments amid online backlash.

Netizens criticized Urbach’s remarks for comparing lawmakers’ housing needs with those of ordinary workers struggling with rent, traffic, and the high cost of living.