Central Government Warns Hundreds of Regional Administrations Struggling to Pay Civil Servant Salaries
Hundreds of regional governments are experiencing financial difficulties in paying employee salaries. Despite this, the central government has sent a firm message to regional administrations not to dismiss state civil apparatus (ASN), including both civil servants (PNS) and government employees with work agreements (PPPK).
Deputy Minister of Home Affairs Bima Arya Sugiarto acknowledged that several regional governments are struggling to pay ASN salaries. However, he warned them to thoroughly review their fiscal capacity before resorting to layoffs. Bima Arya asked regional administrations to reallocate ineffective or unused budgets to cover salary payments.
“We certainly ask that regional heads do not take drastic steps such as dismissals and terminations too easily. They must first examine their fiscal capacity, assess how critical the situation truly is, and then communicate with us so we can find a solution together,” Bima Arya said at the Presidential Palace Complex in Central Jakarta, Tuesday (28/7/2026).
Finance Minister Purbaya Yudhi Sadewa previously revealed data indicating that around 490 regional governments are having difficulty paying employee salaries. Bima Arya stated that his ministry is still mapping which regions are facing these challenges. “Yes, we are continuing to map the regions that are experiencing difficulties in paying salaries,” he said.
The reduced ability of regional governments to pay ASN salaries has also been attributed to cuts in Transfer to Regions (TKD) funds. Since the cuts were implemented, the central government has been continuously monitoring regions that lack sufficient funds to pay employee salaries. Bima Arya said his party is still coordinating with the House of Representatives and the Ministry of Finance regarding adjustments to the TKD. “This is still being refined and communicated with Commission II and the Ministry of Finance regarding many matters,” he added.
Meanwhile, Finance Minister Purbaya stated that there is a possibility of providing additional funds to regional governments struggling to pay ASN salaries. “It is possible that all 490 regions could receive additional funds, but that depends on the President’s direction. So, the opportunity exists, pending the President’s instructions,” Purbaya said at Pacific Century Place in South Jakarta on the same day.
A day earlier, Minister of Home Affairs Tito Karnavian met with Purbaya at the Ministry of Finance in Central Jakarta. The meeting discussed a top-up scheme for regional governments facing financial difficulties in covering personnel expenditures. Tito explained that the top-up scheme would only be provided after regions have implemented efficiency measures and after the Revenue Sharing Fund (DBH) from the central government has been disbursed, yet the regional budget remains insufficient to cover salaries. He said the scheme is intended to prevent any employees from being laid off due to tight regional finances. “We do not want to give false hope by immediately providing a top-up. Otherwise, regions would have no incentive to implement efficiency measures,” Tito said at the Ministry of Finance office in Jakarta.