Regional Funds Cut: Prabowo Exposes Issues with Regional Budgets and Political Costs
President Prabowo Subianto has been outspoken regarding the reasons behind the government’s decision to implement efficiency measures on Regional Transfer Funds (TKD). According to him, the reduction in TKD is being carried out because, after more than 25 years of decentralisation, issues regarding the use of regional budgets persist.
Prabowo assessed that local governments have not fully fulfilled their responsibilities in providing public services, including the development of infrastructure and educational facilities. “So, the issue with the regional transfers that we are reducing is in the interest of efficiency. This system has been running for how long? More than 25 years,” Prabowo stated during a media interview in Hambalang, Bogor, recently.
He cited the division of educational authority under the decentralisation system as an example. Provincial governments are responsible for senior high schools (SMA), while primary (SD) and junior high schools (SMP) fall under the responsibility of regency/city governments. However, according to Prablanwo, in practice, many local governments do not utilise their budgets according to their assigned responsibilities.
“It turns out that for several decades, many local governments have not used the budgets they are supposed to use; in fact, they can be said to be ‘trimmed’ or misappropriated. As a result, many schools are collapsing,” he said.
Prabowo also touched upon the condition of regional infrastructure, which he believes does not receive full attention from local authorities. He pointed to regency and provincial roads that remain unrepaired despite the fact that their construction and maintenance fall under the jurisdiction of local governments.
“It shouldn’t be like that. In the final two or three years of President Jokowi’s administration, he checked regency roads and they were not being repaired, even though that is the responsibility of the Regency. Provincial roads were not being repaired,” said Prabowo.
He noted that this situation forced the central government to intervene through Presidential Instructions (Inpres) to accelerate regional infrastructure development. “If I am not mistaken, in the last two years, he was forced to use Inpres. I will follow that course,” Prabowo continued.
Prabowo stated that these issues are a key consideration in the budget efficiency policies of his administration.
30% Leakage in National and Regional Budgets
During the same opportunity, Prabowo also revealed his estimates regarding government budget leakages. He mentioned that leakages in the State Budget (APBN) and Regional Budgets (APBD) are estimated to reach approximately 30%.
“So, if we look at when I was elected, and even before I took over, I already understood that the leakage from the APBN and APBD is around 30%. This is a leakage in cash sources,” Prabowo said.
According to him, one source of the problem lies in government spending patterns, including goods and services expenditure.
Prabowo then linked this issue to the high political costs required to win regional head elections. “Why is there a problem? Because political costs are too expensive. You, as journalists, monitor this; to become a Regent, sometimes you need Rp 50 billion,” he said.
When asked if the cost of becoming a Governor could reach Rp 200 billion, Prabowo confirmed the figure. He noted that these high political costs must inevitably be recouped, which is why many officials misappropriate regional budgets. “Rp 200 billion. Yes. How can they recover that if they do not misappropriate the APBD?” Prabowo concluded.