Home Affairs Minister Says Regional Head Remuneration Needs Revision, Must Be Based on Performance and PAD
Minister of Home Affairs (Mendagri) Muhammad Tito Karnavian has judged that the regulation governing the financial rights of regional heads and their deputies is due for review.
Government Regulation (PP) No. 109 of 2000, which currently serves as the legal umbrella, is considered far behind when compared with today’s economic conditions, inflation rate, and currency exchange values.
Nevertheless, Tito stressed that any adjustment to the operational support funds (BPO) of regional heads cannot be done haphazardly. Its allocation must be tied directly to performance achievements and improvements in Locally Generated Revenue (PAD).
“So if it were to be adjusted, then it must be linked to one thing: performance. Performance must be good. There are seven main indicators, with assessments perhaps from BPKP and the Ministry of Administrative and Bureaucratic Reform together with the Home Minister,” said Tito at the Parliament Complex in Senayan, Central Jakarta, on Thursday (30/7).
INNOVATION WITHOUT BURDENING THE PEOPLE
Tito explained that this new scheme is designed to create a mutually beneficial system (a win-win solution) between regional governments and the public.
By linking operational spending to the level of PAD, regional heads will be spurred to be more creative in exploring revenue potential without having to weigh down the public’s economic burden.
An increase in PAD will automatically strengthen the structure of the Regional Revenue and Expenditure Budget (APBD). The positive impact is that public spending allocations, such as road infrastructure development, improvements to education facilities, and better healthcare services, can be further optimised.
“It’s not only regional heads who benefit, but the public benefits too. Because there is an incentive for regional heads not to be indifferent. They will strive to find creative, innovative ideas without burdening the people to generate local revenue,” he explained.
CROSS-MINISTERIAL TEAM TO BE FORMED
In response to the proposal to adjust the remuneration, the government has stated it is ready to re-examine the applicable regulation.
The Ministry of Home Affairs will soon form a cross-ministerial team together with the Ministry of Finance (Kemenkeu) and Bappenas to formulate an ideal formula.
Tito emphasised that the revision of PP No. 109 of 2000 will still go through an in-depth study as a follow-up to the conclusions of the working meeting with Commission II of the House of Representatives (DPR RI).
“Yes, because we see that 2000 and 2026 are very different. It is perhaps time for a revision to be made. But of course we will later form a team at the government level, and we will also discuss it with the Finance Minister and Bappenas,” Tito concluded.