Good News From Sri Mulyani For The Regional Government: Transfers To The Regions Increase 1.58 Percent To IDR 811 Trillion Next Year

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani explained that in the 2023 State Budget Bill (RUU) the central government allocated a transfer budget to the regions (TKD) amounting to Rp811.7 trillion. That number increased 1.58 percent compared to the 2022 period which amounted to IDR 799.1 trillion.

"This is the first time since the (Covid-19) pandemic, TKD will reach another Rp800 trillion, which is Rp811.7 trillion," he said in a written statement on Friday, August 19.

According to the Minister of Finance, TKD for Fiscal Year 2023 is directed at improving the quality of public services in the regions, including health and education services because they are decentralized services.

The Minister of Finance added that the allocation of TKD was influenced by the presence of several new provinces in Papua and an increase in revenue-sharing funds (DBH) due to rising commodity prices.

"We have several new provinces in Papua and we also hope that for the DBH we have to pay because next year's high commodity prices will have to be paid to the regions," he said.

On the other hand, he continued, the general policy of TKD for the 2023 period was divided into several focuses. First, increasing the synergy of central and regional fiscal policies as well as harmonization of central and regional expenditures.

Second, strengthening the quality of TKD management that is directed, measurable, accountable, and transparent. Third, increasing the capacity of regional taxation while maintaining the investment climate, ease of doing business, and public welfare.

"And the last is how to encourage the use of financing instruments to overcome limited fiscal capacity and the need for accelerated development," he said.

According to VOI records, the total state expenditure in the 2023 APBN Bill is IDR 3,041.7 trillion. This value consists of central government spending of IDR 2,230 trillion, as well as transfers to the regions of IDR 811.7 trillion.

Meanwhile, for revenue, next year's APBN targets an income of Rp. 2,443.6 trillion. Thus, the budget deficit is designed to be around IDR 598.2 trillion or equivalent to 2.85 percent of gross domestic product (GDP).