Home Affairs Minister: Transition period for 30% regional personnel expenditure limit to be extended
Jakarta (ANTARA) - The Minister of Home Affairs, Tito Karnavian, stated that the transition period for the implementation of the maximum 30 per cent limit on personnel expenditure from the Regional Revenue and Expenditure Budget (APBD) will be extended.
Tito, during a working meeting with Commission II of the Indonesian House of Representatives (DPR RI) in Jakarta on Monday, said that extending the transition period is one of the legal mechanisms to address salary issues for Government Employees with Work Agreements (PPPK).
This relaxation, he noted, was the result of a meeting between the Minister of Home Affairs, the Minister of Finance, and the Minister of State Apparatus Utilization and Bureaucratic Reform on 7 May 2026.
According to Tito, this policy will be regulated within the 2027 State Budget (APBN) Law, rather than through an amendment to Law Number 1 of 2022 concerning the Financial Relations between the Central Government and Regional Governments (HKPD). The government opted to include the extension provision in next year’s APBN Law because revising the HKPD Law was deemed too time-consuming and procedurally complex.
“At the very least, it will be extended by one year. This provides more time to deliberate and work. I expect this law to be released around October or November,” he said.
Consequently, Tito added, the principle of lex posterior derogat lex priori will apply, meaning the newer regulation (lex posterior) will supersede or override the older regulation (lex priori).
The 30 per cent limit on personnel expenditure from the APBD is currently regulated under Article 146, paragraph (1) of the HKPD Law. The percentage can be adjusted via ministerial decree, as stipulated in Article 146, paragraph (3).
In response to recent dynamics, the Minister of Home Affairs, the Minister of Finance, and the Minister of PANRB have studied options to adjust the percentage limit for regional personnel expenditure.
Initially, Tito proposed increasing the personnel expenditure limit to 40 or 50 per cent to align with regional fiscal capacities. However, the Minister of Finance proposed maintaining the 30 per cent limit but providing a relaxation of the transition period.
“If we open it to 40–50 per cent, there is a fear that regional heads might become complacent and fail to seek creative ways to increase Local Original Revenue (PAD) or improve the health of Regional Owned Enterprises (BUMD). Therefore, we will stick to 30 per cent for now; let the regions be creative while we evaluate regions that genuinely require additional Transfers to Regions (TKD),” he said.
Meanwhile, Commission II of the DPR RI, in its meeting conclusion, stated its support for the agreement reached between the Ministry of Home Affairs, the Ministry of PANRB, and the Ministry of Finance to extend the aforementioned transition period.