Minister of Home Affairs asks local governments to be efficient and creative in finding funds to prevent PPPK layoffs

Minister of Home Affairs (Mendagri) Muhammad Tito Karnavian/

JAKARTA - Minister of Home Affairs Tito Karnavian asked local governments (pemerda) to be efficient and creative in finding income to prevent the termination of employment relationships (PHK) for government employees with work agreements (PPPK).

Tito conveyed this following the implementation of the scheme for regional employee spending of a maximum of 30 percent of the regional revenue and expenditure budget (APBD) in January 2027, as stipulated in Law Number 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments (HKPD Law).

"He has to do other efficiency shopping. I'm afraid they haven't done that. Efficiency, for example, meetings, official travel, eating and drinking," said the Minister of Home Affairs, quoted by ANTARA, Monday, March 30.

Tito's statement also responded to the issue of local governments who were forced to dismiss PPPK due to budget constraints. The members of the commission for domestic governance also questioned the issue during the meeting.

According to the Minister of Home Affairs, efficiency is one of the steps that can be taken by local governments. In this case, he warned regional heads to allocate budgets wisely.

"There are areas that can do efficiency and efficiency can be closed to pay for PPPK. There are such things," he said.

In addition to efficiency, he also asked the local government to be creative in finding new revenue so that they do not only rely on funds transferred to the region (TKD). He gave an example, the activity of Regional Owned Enterprises (BUMD) as well as micro, small, and medium enterprises (MSMEs) needs to be revived to increase the local original revenue (PAD).

"That's the use of the regional head. If only routine work spends the APBD, everyone can, but how can a regional head have creativity so that he can not burden the people," said Tito.

In addition to PAD, he continued, it can also be maximized through taxes on large companies such as restaurants and hotels. This tax must be ensured to enter the Regional Revenue Office (Dispenda).

On the other hand, Tito said Article 146 paragraph (3) of the HKPD Law allows for adjustments to the percentage of regional employee spending. The adjustment was decided by the Minister of Finance after coordinating with the Minister of Home Affairs as well as the Minister of State Apparatus Utilization and Bureaucratic Reform.

However, the Minister of Home Affairs emphasized that the adjustment was the last solution. The Ministry of Home Affairs will monitor the ability of the local government first. Tito will also send a team to the regions.

"Don't expect these last solutions. Don't go there first before trying. We also want to see who the great regional heads are. There are regional heads who may just give up immediately. Yes, let the people, why choose him, not creative," he said.