UGM Expert Proposes Restructuring Official Allowances to Fund PPPK Salaries

The issue of salary payments for Government Employees with Work Agreements (PPPK) continues to draw attention. Professor Agus Pramusinto, a public policy expert from Universitas Gadjah Mada (UGM), argues that this phenomenon reflects a lack of synchronisation between central government policy and the fiscal capacity of regional governments. He stated that when regional governments are no longer able to meet salary obligations, the responsibility for resolution falls to the central government as the national policymaker. He assessed that the current situation is a consequence of budget efficiency policies that were not designed comprehensively.

Agus highlighted that government policymaking tends to be reactive and fails to address the root of the problem. Rather than optimising existing institutions, the government often creates new programmes that add to the budget burden. Regarding the push for regions to find new revenue sources, he cautioned against imposing additional taxes on the public. ‘To seek new revenue from taxes, it is a pity for the people who are already heavily burdened. Layoffs are happening everywhere, and finding work is increasingly difficult. Do not then put more pressure on the public with taxes,’ he stressed.

He also noted that the regulation limiting personnel expenditure to a maximum of 30 per cent of the Regional Budget (APBD) needs to be reviewed, as it becomes less relevant when regional budget capacity declines due to central efficiency drives. As a long-term solution, Agus proposed that the government evaluate the real needs for state civil apparatus before opening new recruitment, prioritising the restructuring of organisations by eliminating obsolete positions. As a concrete solution for financing PPPK salaries, he specifically proposed restructuring the allowances of government officials. He concluded that resolving the PPPK salary crisis requires the government’s courage to thoroughly evaluate state spending priorities, arguing that reorganising apparatus expenditure is more fundamental than simply pushing regions to find new revenue sources that risk burdening the public.