Bamsoet Criticises TKD Adjustments, Calling the Scale Too Extreme
The Speaker of the MPR RI, Bambang Soesatyo (Bamsoet), has highlighted the impact of the central government’s policy to adjust Regional Transfer Funds (TKD). This budget reduction measure is assessed to be creating heavy pressure on regional operational continuity.
The Member of the House of Representatives (DPR RI) revealed the reality of the difficulties currently faced by regional apparatuses. Financial pressure has left hundreds of regencies and cities struggling to manage their cash flows.
“The adjustment of Regional Transfer Funds (TKcal) from the central government has had a real impact or excess for hundreds of local governments (Pemda),” Bamsoat wrote in a written statement on Friday (18/09/2026).
The shrinking budget situation is also sacrificing various public service programmes. Many regions have been forced to postpone several development projects while struggling to meet the financial entitlements of employees.
“Not only is it difficult to pay employee salaries, but many local governments are also finding it hard to build or repair regional infrastructure. Dozens of local governments have even been forced to seek loans to overcome development budget limitations,” he explained.
Bamsoet understands the central government’s move to lock certain fund flows as a form of shock therapy. Throughout 2026 alone, dozens of regional heads have been caught in sting operations by law enforcement agencies.
“Amid the prevalence of corruption cases by officials at the regional level, the TKD adjustment policy from the centre can be accepted and supported by various elements of society. Between 2004 and 2025, as many as 201 regional heads were involved in corruption cases,” Bamsoet clarified.
While the policy aims for good discipline, the budget cuts are deemed to still need to consider the continuity of government operations. Local governments essentially require a safe fiscal space to ensure that public services do not stall.
“Ideally, the adjustment of TKD from the centre should not cause excess or problems for the regions,” he emphasised.
The effect of these cuts has prompted the Provincial Government of DKI Jakarta to finalise plans for issuing regional bonds. Jakarta’s TKD allocation for 2026 has been drastically cut to 16 trillion Rupiah.
A similar situation is experienced by North Maluku, which has been forced to propose a regional loan of 1 trillion Rupiah. According to recent records, 94 local governments have applied for financing loans from PT Sarana Multi Infrastruktur (SMI).
“The pattern or mechanism of local government debt repayment to SMI using Revenue Sharing Funds (DBH) or TKD reductions tends to continue weakening local government finances. Building new infrastructure or repairing existing infrastructure is a continuous need,” said Bamsoet.
The lack of funds for repairing public facilities has ultimately triggered initiatives from citizens in various regions to take direct action. Community groups in Aceh, Bengkulu, and Central Java have been forced to self-fund to repair damaged roads.
“If the manifestation of the excess is like that, it may be because the scale of the TKD adjustment is too extreme and the calculation was inaccurate,” he said.
The senior political figure urged the central government to review the percentage of regional transfer cuts. More accurate calculations are crucial to ensure that public facilities in border areas are not neglected.
“That is an example of the excess of a TKD adjustment scale that is too extreme with inaccurate calculations,” Bamsoet concluded.