House Budget Committee Chair Denies Regional Transfer Funds Will Decrease in 2027

Chairman of the House of Representatives’ Budget Committee (Banggar), Said Abdullah, has denied reports of a cut in the central government’s regional transfer budget for the 2027 fiscal year. Said instead claimed that the allocation for Transfer to Regions (TKD) in 2027 will increase compared to this year. The Indonesian Democratic Party of Struggle (PDI-P) politician also questioned the source of information suggesting a decline in next year’s TKD figure. “My calculation is that the 2027 TKD will certainly increase compared to the Rp 649 trillion in 2026,” Said stated at the Parliament Complex in Jakarta on Monday, 6 July 2026.

Nevertheless, Said noted that no final decision has been made regarding the exact amount of regional transfer funds for 2027. However, the assumption of an increase is based on the TKD calculation formula, which is determined by the target gross domestic product (GDP) ratio. He explained that a ratio of 2.5 to 2.7 percent of total GDP provides an opportunity for an additional TKD allocation in 2027. The TKD allocation for 2026 was set at Rp 692.9 trillion, a figure lower than the 2025 allocation of Rp 919 trillion, which was subsequently cut to Rp 869 trillion.

Said stated that the current budget discussions within the Budget Committee are still referring to the posture outlined in the preliminary fiscal policy framework, which is not yet final. “The term ‘TKD decrease’ is not applicable because it is still at the posture stage, and the exact figure will be delivered by the President in the financial note on 16 August,” he said. He expressed confidence that the government is committed to increasing the components of the TKD, including the General Allocation Fund (DAU), Special Allocation Fund (DAK), and Revenue Sharing Fund (DBH). However, he noted that this budget allocation comes with the consequence that regional government programmes must be aligned with central government programmes. “Later, the programmes will be earmarked from the central to the regional level, so there is a shared vision with the president,” he said.

Previously, Deputy Chairman of House Commission II, Aria Bima, stated that the regional transfer budget for 2027 might decrease because the budget efficiency policy remains in effect. According to him, the TKD allocation could shrink from around Rp 900 trillion to Rp 600 trillion. He expressed concern that this budget cut would affect the financing of salaries for honorary educators and Government Employees with Work Agreements (PPPK), which are largely charged to the Regional Revenue and Expenditure Budget (APBD), while the APBD posture in many regions still relies on regional transfer funds. Aria claimed that Commission II has requested the Ministry of State Apparatus Empowerment and Bureaucratic Reform and the Ministry of Home Affairs to proactively discuss this matter with the Ministry of Finance. “So that civil servants and PPPK are not affected by the efficiency measures in 2027,” he said on 28 June 2026.