Home Affairs Ministry considers using DAU to pay regional PPPK salaries

The Ministry of Home Affairs (Kemendagri) is currently formulating a proposal to utilise the General Allocation Fund (DAU) to assist regional governments facing fiscal difficulties in paying the salaries of Government Employees with Work Agreements (PPPK). Deputy Minister Bima Arya Sugiarto stated in Makassar, South Sulawesi, on Tuesday that the proposal is not yet finalised. “Perhaps one of the proposals is that PPPK salaries could be helped through the DAU. However, this is certainly not certain yet, and the formula is still being developed while awaiting policy from the Ministry of Finance,” he said. He explained that his ministry has instructed its ranks to identify districts, cities, and provinces that lack the fiscal space to bear the PPPK salary burden. Minister of Home Affairs Tito Karnavian is also coordinating with the Ministry of Finance to verify the data and current conditions of regional governments. Bima acknowledged that it is natural for provincial governments to propose additional DAU directly to pay PPPK salaries, which are now facing payment obstacles, given the importance of the matter. However, the central government will still review the proposal by first assessing the national fiscal capacity before making an appropriate decision. “The proposal is fine, but we must see the extent of our state budget’s (APBN) ability to allocate it. What is important now is to first confirm that the salaries truly cannot be paid,” he responded. The former Mayor of Bogor reiterated that the budget efficiency policy must continue to be implemented sustainably until 2027. Therefore, regional governments must be rational in managing their expenditure. “This efficiency principle continues. Unreasonable allocations must be eliminated, that is the principle. But the portion of the Transfer to Regions (TKD) is still being formulated and conditioned with the Ministry of Finance,” he said firmly. He assessed that PPPK salaries should ideally be allocated from the state budget, especially given the central government’s cuts to the TKD. On the other hand, the salary component is also considered to burden the regional budget posture following an increase in the number of PPPK personnel. Previously, the Chairperson of Commission II of the House of Representatives, Muhammad Rifqinizamy Karsayuda, stated that evaluations found dozens of districts and cities in Indonesia lack sufficient fiscal space to finance PPPK salaries, despite various efficiency measures. “We have data showing 79 districts and cities have been thoroughly assessed. Efficiency measures have been taken, their regional budgets have been calculated, yet there is no other way but to be financed or assisted by the state budget. One source is the DAU, the transfer to regions budget,” he said in Makassar.