Home Affairs Minister Tito Outlines Strategy for PPPK and Contract Workers, Rules Out Dismissals

The Minister of Home Affairs, Muhammad Tito Karnavian, has ensured that there is no intention to pursue the option of employee dismissal. He stated this during a Hearing with Commission II of the Indonesian House of Representatives (DPR RI) regarding the issues surrounding Government Employees with Work Agreements (PPPK) and honorary workers.

“We do not expect the option of employee dismissal,” the Minister explained in the Commission II Meeting Room, Jakarta, on Monday, 8 June 2026.

During the session, the Minister also presented several strategies to adjust the employee expenditure posture to a maximum of 30 per cent, as mandated by the Law on Central and Regional Financial Relations (UU HKPD) starting from 2027. Regarding expenditure, he urged local governments (Pemda) to refrain from both new recruitment and the dismissal of existing employees.

“[Regional heads] must be firm: there shall be no new recruitment of honorary workers,” said the Minister.

From the revenue side, the Minister encouraged local governments to be creative in increasing Regional Original Income (PAD). He cited the success of Pekanbaru City, which managed to optimise PAD from Rp800 billion to over Rp1 trillion through streamlined licensing. He also provided the example of Banyuwangi Regency, which successfully linked restaurant and hotel taxes directly to the local government, thereby boosting PAD.

Furthermore, the Minister encouraged the optimisation of Regional-Owned Enterprises (BUMD) to serve as instruments for increasing PAD. In addition to these efforts, he confirmed that he has held meetings with the Minister of Administrative and Bureaucratic Reform, Rini Widyantini, and the Minister of Finance, Purbaya Yudhi Sadewa. The results of these meetings, held in early May, have led to a proposal to extend the transition period for the implementation of the UU HKPD by one year.

“This will not be done through a revision of the UU HKPD, but rather by including it in the 2027 State Budget (APBN) Law, extending it for one year. In accordance with the legal principle of Lex Posterior Derogat Legi Priori, the later rule overrides the previous one,” concluded the Minister.