Home Affairs Minister Urges Local Governments to Boost Efficiency to Prevent PPPK Layoffs

Home Affairs Minister Tito Karnavian has requested that local governments carry out budget efficiencies to prevent the termination of employment contracts for Pegawai Pemerintah dengan Perjanjian Kerja (PPPK). This advice was given following reports of numerous PPPK at risk of dismissal because several regions’ personnel expenditure budgets are insufficient to cover their salaries.

The inability of regions to pay PPPK salaries is triggered by the restriction on personnel expenditure to a maximum of 30 percent of the regional revenue and expenditure budget (APBD). This new regulation, effective from January 2026, is stipulated in Law Number 1 of 2022 on Financial Relations between the Central Government and Regional Governments.

Tito suspects that some regions claiming inability to pay PPPK salaries have not yet implemented efficiencies. Allocations for less critical components, such as official travel, meeting consumables, and other activities, remain too high. “There are regions that have already carried out efficiencies, and that is sufficient to pay PPPK,” Tito said when met at the DPR Complex, Senayan, Jakarta, on Monday, 30 March 2026.

The former Chief of the Indonesian National Police also suggested that regional heads be more creative in seeking alternative funding sources beyond the APBD. For example, developing regional-owned enterprises; promoting the growth of micro, small, and medium enterprises (UMKM); and optimising tax revenues, such as from restaurants, to flow into the regional revenue service.

Tito is confident that there are many ways to increase original regional revenue, thereby preventing mass layoffs of PPPK. Tito then emphasised that regions should not always rely on the APBD to run government operations.

“If it’s just routine work, spending the APBD, anyone can do it. But how can regional heads have creativity so that they do not burden the people,” he stated.

If efficiencies and efforts to find funding sources beyond the APBD have been pursued, but the region still cannot pay PPPK salaries, Tito said the central government will offer a final solution, namely adjusting the 30 percent APBD usage limit for personnel expenditure.

According to clause 3 of Article 147 of Law Number 1 of 2022, Tito explained, the 30 percent personnel expenditure restriction can be adjusted by the Minister of Finance after coordinating with the Minister of Home Affairs and the Minister for State Apparatus Utilisation and Bureaucratic Reform.

Therefore, Tito urged the public not to worry about PPPK dismissals occurring. The central government is open to adjusting regulations and finding solutions. “We will first see which regions have truly given up. They have already implemented efficiencies, already racked their brains to find new revenues, but still cannot cover PPPK salaries; there will be an adjustment, namely changing the size of that 30 percent,” he said.

Previously, discussions of mass PPPK dismissals due to the personnel expenditure restriction to a maximum of 30 percent of the APBD have emerged in several regions. In Nusa Tenggara Timur, for instance, Governor Emanuel Melkiades Laka Lena plans to dismiss 9,000 PPPK in the NTT Provincial Government environment when the personnel expenditure restriction regulation takes effect.

Meanwhile, West Sulawesi Governor Suhardi Duka is also preparing to dismiss around 2,000 PPPK for the same reason.