Finance Minister Ready to Inject Funds into Regions Facing Financial Constraints
Finance Minister Purbaya Yudhi Sadewa has stated that the ministry has prepared financial injections for regions experiencing financial difficulties following the reduction of regional transfers (TKD).
“Throughout this year, I have been monitoring the financial condition of the regions month by month. I am continuously assessing whether there are any risks or if operations can continue. If not, I have prepared funds to inject back into the system,” Purbaya said in Jakarta on Thursday.
Purbaya noted that there has been a reduction in regional transfers of up to Rp200 trillion, driven by budget efficiency efforts and the aim to ensure regional spending is precisely targeted.
He added that despite the reduction in regional transfers, the central government has increased central-led regional spending to Rp400 trillion.
“At that time, it was evident that regional allocations were not hitting the mark and spending was inaccurate. Consequently, a portion was redirected to the central government, which then manages the spending in the form of regional infrastructure development,” he explained.
Nevertheless, Purbaya emphasised that the Central Government continues to monitor regional finances for any signs of instability, and if risks are identified, funds will be injected into the system.
Purbaya acknowledged that in August, several regions faced difficulties in paying salaries; in response, the government released assistance to these regions amounting to Rp20.5 trillion to ensure stability.
Furthermore, Purbaya stated that the Central Government is implementing a policy regarding the salaries of Government Employees with Work Agreements (PPPK), which will be taken over by the central government.
“We have implemented a policy where PPPK staff will become full-time starting in January, with salaries paid by the central government. Those who were previously part-time will also be able to begin registering as Civil Servants (PNS) starting in January, with payments handled by the central government in stages,” he said.