Regional Governments Struggle to Pay PPPK Salaries, Home Affairs Ministry Drafts DAU Assistance Proposal
The Ministry of Home Affairs (Kemendagri) is currently formulating a mechanism to use the General Allocation Fund (DAU) to assist regional governments experiencing limited fiscal capacity in paying the salaries of Government Employees with Work Agreements (PPPK).
“One of the proposals is that PPPK salaries could be resolved through DAU assistance. However, this is not yet certain and is still being formulated, pending policy direction from the Ministry of Finance,” said Deputy Minister of Home Affairs Bima Arya Sugiarto in Makassar, South Sulawesi, on Tuesday.
Bima explained that the ministry has instructed its staff to identify and verify districts, cities, and provinces that no longer have sufficient fiscal space to bear the burden of PPPK salaries. Simultaneously, Minister of Home Affairs Tito Karnavian is coordinating with the Ministry of Finance to validate data and the real financial conditions of regions experiencing delays in fulfilling these obligations.
“We are currently investigating the data from regions that are genuinely struggling to pay PPPK salaries,” Bima stated.
Regarding initiatives from several provincial governments proposing a direct increase in DAU, Bima considered it reasonable given the urgency of the issue. Nevertheless, he stressed that the central government must calculate the national fiscal capacity within the State Budget (APBN) before making a final decision.
“The proposal for DAU is fine, but we need to see the extent of our APBN’s fiscal ability to allocate it. The most important thing now is to confirm that the salaries truly cannot be paid by the regions,” he said.
The former Mayor of Bogor emphasised that regional budget efficiency policies must be consistently implemented until 2027. Regional governments are required to be rational in managing their spending. “This principle of efficiency continues. Unreasonable allocations must be eliminated, that is the principle. However, the portion of Transfers to Regions (TKD) is still being formulated and conditioned with the Ministry of Finance,” Bima asserted.
Previously, South Sulawesi Governor Andi Sudirman Sulaiman proposed that PPPK salary allocations be borne by the central government through the APBN. The limitations of regional budgets, impacted by cuts to TKD allocations, are considered to heavily burden regional finances following the increase in the number of PPPK personnel.
A similar concern was raised by the Chairman of Commission II of the Indonesian House of Representatives, Muhammad Rifqinizamy Karsayuda. Based on the commission’s evaluation, dozens of regions in Indonesia have fiscal space that is no longer sufficient to finance PPPK salaries despite maximum efficiency efforts. Data indicates that 79 districts and cities have been assessed, and even after calculating budget efficiencies, their regional budgets cannot cover the costs without assistance from the APBN, potentially sourced from DAU.