Flanked by leaders of eight Indonesian political parties, Subianto told a televised news conference in the capital, Jakarta, that they had agreed to cut the housing allowance and suspend overseas trips for members of parliament.
It was a rare concession in response to mounting public anger.
"Lawmakers will see certain allowances scrapped and overseas work trips suspended under a new moratorium," Subianto said.
As nationwide protests escalated across the world's third-largest democracy last week, Subianto summoned the country's prominent figures and cancelled a high-profile trip to China.
He met with 16 religious figures and eight political leaders, including former President Megawati Sukarnoputri, the chairwoman of the country's only formal opposition party, the Indonesian Democratic Party of Struggle.
Five days of protests began in Jakarta on Monday, sparked by reports that all 580 MPs receive a monthly housing allowance of 50 million rupiah ($A4,702) in addition to their salaries.
The allowance, introduced last year, is almost 10 times the Jakarta minimum wage.
Critics argue the new allowance is not only excessive but also insensitive at a time when most people are grappling with soaring living costs, taxes and rising unemployment.
The protests grew wider and more violent following the death of 21-year-old ride-hailing driver Affan Kurniawan.
A video on social media, apparently showing his death during a rally in Jakarta on Thursday, shocked the nation and spurred an outcry against the security forces.
Kurniawan was reportedly completing a food delivery order when he was caught in the clash.
Witnesses told local television that the armoured car from the National Police's Mobile Brigade unit suddenly sped through the crowd of demonstrators and hit Kurniawan, causing him to fall.
Instead of stopping, the car ran over him.
Subianto said police are investigating seven officers linked to the incident.
The death toll from riots that broke out in multiple cities rose to six after authorities in Yogyakarta on Sunday confirmed that Friday's clashes between rock-throwing demonstrators and riot police killed a 21-year-old university student.
Subianto reiterated that his government respects freedom of expression as guaranteed in Indonesia's constitution and international conventions.
"But when demonstrations turn anarchic, destroying public facilities, endangering lives, and attacking private homes or public institutions, this becomes a serious violation of law," he said.
Subianto cautioned that violent acts risk veering into treason and terrorism, and warned "the state would not tolerate attempts to destabilise the country".
The former general further called on the public to express their aspirations peacefully and constructively, and promised their voices would be heard.
"I sincerely ask all citizens to trust the government and remain calm," Subianto said.
