Home Affairs Ministry Considers Using General Allocation Fund for PPPK Salaries

The Ministry of Home Affairs (Kemendagri) is still formulating a proposal to use the General Allocation Fund (DAU) to assist local governments facing fiscal difficulties in paying the salaries of Government Employees with Work Agreements (PPPK).

“One of the proposals is that PPPK payments could be resolved through the DAU. However, this is not yet certain, and we are still working on the formula while awaiting policy direction from the Ministry of Finance,” said Deputy Minister of Home Affairs Bima Arya Sugiarto in Makassar, South Sulawesi, on Wednesday.

He stated that his team has been instructed to identify provinces, regencies, and cities that lack the fiscal capacity to cover PPPK salaries across various regions. Furthermore, Minister of Home Affairs Tito Karnavian is continuing to coordinate with regional administrations to determine which are unable to pay PPPK salaries, as well as with the Ministry of Finance to verify the latest data and conditions of local governments.

“So, this is what we are currently working on. We are delving into the data from regions that are genuinely struggling to pay PPPK salaries,” he said in response to reporters’ questions.

Regarding efforts by provincial governments to propose additional DAU allocations to cover the now-stalled PPPK salary payments, Bima noted that such requests are reasonable given their importance. However, the central government will review the proposal by first assessing the national fiscal capacity before making an appropriate decision.

“The proposal is fine, but we need to see the extent of our state budget’s (APBN) ability to allocate for it. The most important thing now is to confirm that the payments truly cannot be made,” he responded.

The former Mayor of Bogor reiterated that budget efficiency policies must be implemented sustainably until 2027. Therefore, local governments must be rational in managing their regional expenditure budgets.

“This principle of efficiency continues. Unreasonable allocations must be eliminated, that is the principle. However, the portion of the Transfer to Regions (TKD) is still being formulated and conditioned with the Ministry of Finance,” he said firmly.