Home Affairs Ministry to Scrutinise Regional Budgets of Areas Claiming Inability to Pay Employee Salaries

The Ministry of Home Affairs (Kemendagri) will conduct an in-depth review of the regional budgets (APBD) of local governments that claim to be experiencing difficulties or are unable to pay the salaries of Government Employees with Work Agreements (PPPK). This step is being taken to ensure whether the regions have made maximum efforts in budget management. Minister of Home Affairs Tito Karnavian revealed that his ministry is currently conducting simulations and studies related to the issue. However, he stressed that he does not want to immediately conclude that a region is incapable before directly checking the efficiency of its spending and its innovation in generating Regional Original Income (PAD). “We want to look at the regions that say they are unable to pay salaries. We will scrutinise their APBD, have they carried out efficiency measures? If a region claims it is unable but after we check it hasn’t made efficiencies,” Tito said at the Parliament Complex in Senayan, Central Jakarta, Thursday (16/7). Tito cited Lahat Regency as a successful example, which managed to save up to IDR 400 billion after implementing efficiencies. The savings were achieved by cutting official travel costs, reducing meeting budgets, and slashing excessive maintenance costs, allowing the region to have sufficient allocation to pay employee salaries. In addition to efficiency, Tito also encouraged local governments to be creative in generating innovations to boost PAD without burdening the community. He took the example of a breakthrough by the Pekanbaru City Government, which in the previous year successfully increased PAD from IDR 800 billion to IDR 1.2 trillion simply by simplifying the tax and levy payment system and intensifying public outreach. “So for regions we consider to be struggling, let’s see first, have they made efficiencies? Have they made efforts to increase PAD? If both have been done, perhaps a top-up from the central government is needed,” Tito explained. Tito added that if a region is proven to have carried out maximum efficiency and optimised PAD but still lacks funds, the Ministry of Home Affairs will step in. His party is ready to propose to the Ministry of Finance that unpaid Profit-Sharing Funds (DBH) be immediately disbursed to the region to ensure that the salary rights of PPPK employees can be fulfilled.