Bali Regional Parliament Proposes Differentiating Minimum Wage for Foreign and Local Companies

Commission II of the Bali Regional House of Representatives (DPRD) has proposed that the Provincial Minimum Wage (UMP) for foreign investment companies (PMA) be differentiated from that of domestic investment companies (PMDN). The proposal was made because foreign investment is said to dominate 70 per cent of investment in Bali.

“Today I also proposed to Apindo, which is part of the wage council, whether the UMP for PMA could be differentiated from the UMP for PMDN. Because 70 per cent of investment in Bali is PMA,” said Agung Bagus Pratiksa Linggih, Chair of Commission II of the Bali DPRD, at the DPRD building on Tuesday (15/9/2026).

According to Ajus, as Agung Bagus Pratiksa Linggih is known, differentiating the UMP is expected to prevent local investment from competing directly with foreign investment. In this way, foreign investment could fill sectors not served by local investors.

Ajus also proposed the introduction of zoning for workers to increase people’s purchasing power, one measure being regulating the distance between workers’ homes and their places of work.

This would reduce workers’ expenditure, as spending on petrol and other necessities would fall.

“But if there were certain zones for local communities, someone working in Badung would not have to come from Gianyar, Tabanan and the surrounding areas. That is why I am asking for certain zones to be established,” said Ajus.

Pushing for a 2027 UMP Increase

Ajus is also pushing for a rise in the 2027 UMP. However, he asked that any increase be calculated in a measured and fair manner so as not to harm either employers or workers.

“Overall, participants in today’s meeting agreed that there must be a UMP increase. However, that increase must be measured, because the UMP is essentially a safety net for fresh graduates and single people,” said Ajus.

He said employers reported that people’s purchasing power has declined, making it difficult to accommodate a significant UMP rise. On the other hand, a UMP increase is feared to heighten interest in working in Bali and narrow job opportunities for local residents.

“So the Governor and the DPRD must also coordinate with the Bali Wage Council, because the recommendation must come from the wage council,” said the Golkar politician.

Ajus noted that UMP increases over the past four years have averaged 6–7 per cent, while inflation has risen 2–3 per cent. Yet this has not been accompanied by an improvement in people’s purchasing power.

“But in reality it is not so. Purchasing power has actually fallen. That means there are other factors behind the declining cost of living. This is what we are trying to find out,” Ajus explained.

He also warned that a UMP increase misaligned with economic conditions could trigger mass redundancies and price rises.

“Secondly, for example, if the UMP rises, employers must increase their revenue to pay their staff. In the end, prices of everything go up,” he said.

According to Ajus, in principle all parties agree that the UMP should rise. However, a middle ground is needed in determining the formula and calculation for the UMP increase.

“Employers must not act arbitrarily towards workers, and workers must also be reasonable in line with the capacity of employers and the economy,” Ajus added.

Next, the DPRD will hold a joint meeting with several commissions and relevant stakeholders to discuss the size of the 2027 UMP increase.