Sri Mulyani Advises Regions To Have A 'Minister Of Finance' For More Professional Budget Management

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani said that local governments (Pemda) actually have ample opportunity to optimize financial performance in order to achieve welfare and development targets.

According to the Minister of Finance, the regional government can modify the regional revenue and expenditure budget (APDB) as a local fiscal instrument to encourage the creation of more vibrant economic activity.

“Ladies and gentlemen, in fact the regions are increasingly in need of high financial management skills because there are opportunities that are open. So the provinces, regencies and cities should have a finance minister who carries out risk and manages their finances properly," he said through a virtual channel during the socialization of the Law on Regional and Central Financial Relations (HKPD) in Riau, Friday, March 25.

The Minister of Finance hopes that the proposal can become one of the priority agendas in increasing the capability of regional financial management.

“Including now regions can have endowment funds. Like Riau, which currently gets high income from oil, it doesn't have to be spent. The income can be placed in an endowment fund that is managed carefully for strategic expenditures in the future, such as the existence of an Education Fund Management Institution (LPDP) at the center," he said.

In detail, the Minister of Finance explained that this endowment is determined by regional regulations, managed by the general treasurer, and carried out in investments that are free from the risk of impairment.

"Like the LPDP at the center, which currently manages almost Rp. 100 trillion (from initially only Rp. 1 trillion)," he said.

In the editorial notes, the 2022 State Budget has determined an allocation of state expenditures of Rp.2,714.2 trillion and state revenues of Rp.1,846.1 trillion.

Of the expenditure budget, IDR 769.6 trillion (28.35 percent) of which is the allocation for postal expenditures for Transfers to Regions and Village Funds (KTDD).