Tito Asks Local Governments Not To Panic Transfer Funds To Be Cut: We Can Also Fix The COVID Era

JAKARTA - Minister of Home Affairs (Mendagri) Tito Karnavian emphasized that local governments should not panic in the face of cutting transfer funds to the regions (TKD) by the central government in the budget next year.

Tito asked regional heads to focus on efficiency in spending and not rush to state budget shortages.

"Facing the dynamics of regional financial transfers that switch to the center, one tip is that colleagues in the regions must make spending efficiency, especially bureaucratic spending," Tito said after the Coordination Meeting for the Development and Supervision of Regional Government Implementation at the Pullman Hotel, Jakarta, Wednesday, Thursday, October 9.

According to him, many budget posts have been too large and have not been oriented towards results, such as meeting spending, official travel, consumption, and asset maintenance. That budget can be the target of savings.

Moreover, Tito assessed that the provincial and district/city governments had faced similar problems. Namely when the regional budget had to be diverted or refocused for handling COVID-19 some time ago.

"This must be reduced. Many regions can do that. We can also reduce our budget during the COVID era," he said.

In addition to efficiency, the former National Police Chief also encouraged local governments to be more creative in finding new sources of income that did not burden the small community. He gave an example of optimizing the tax on restaurants, hotels and parking, which had experienced many leaks.

"The Customer may not read, in the bill there is a tax, you know. The question is, is the tax submitted to the regional Dispenda? Not necessarily," said Tito.

Furthermore, Tito asked regional heads to take advantage of central government programs that according to him have economic effects in their regions, such as Free Nutrition Food (MBG), Red and White Cooperatives, Fishermen's Villages, as well as food and energy security programs.

"The positive way is, employment, there is a supply chain, making economic turnover because of the money circulating in the area. Here are just some tips for the region to face the physical year ahead," he said.

For information, the TKD allocation in the 2026 RAPBN is planned at IDR 692,995 trillion, or a decrease of around 24.7 percent compared to the previous year which reached IDR 919.9 trillion. This means that there is a cut of around IDR 226.9 trillion.

In response to this, as many as 24 governors and deputy governors were present at the Head Office of the Ministry of Finance on Tuesday, October 7 to voice their aspirations.

They expressed objections to the Minister of Finance, Purbaya Yudhi Sadive, regarding the cutting of transfer funds to the regions (TKD) in the 2026 State Revenue and Expenditure Budget Draft (RAPBN).

The regional heads who attended included Jambi, East Kalimantan, North Kalimantan, Bangka Belitung Islands, Banten, Riau Islands, Central Java, Central Sulawesi, North Maluku, West Sumatra, DI Yogyakarta, Mountains Papua, Bengkulu, Aceh, North Sumatra, Lampung, South Sulawesi, West Nusa Tenggara, Southwest Papua, South Kalimantan, Central Kalimantan, East Java, Gorontalo, and South Sumatra.