Indonesia allocates Rp 18.9 trillion to support local government salaries

The Indonesian government has allocated Rp 18.9 trillion to 546 local governments to address fiscal pressures and ensure the payment of salaries for civil servants, including Government Employees with Work Agreements (PPPK). This funding consists of Rp 10 trillion in unpaid Revenue Sharing Funds (DBH) and over Rp 8 trillion in additional General Allocation Funds (DAU).

Minister of Home Affairs Tito Karnavian stated that the government has implemented three schemes to prevent local employees from being laid off due to budget constraints. First, local governments are encouraged to practice budget efficiency by reducing non-essential spending such as official travel and meetings. Second, unpaid DBH will be disbursed to cover personnel expenses. Third, if efficiency and DBH are insufficient, the central government will provide additional DAU.

Members of the House of Representatives (DPR RI) have welcomed the move but emphasized the need for improved regional financial governance to prevent future fiscal issues. There are calls to evaluate the Regional Transfer (TKD) scheme for 2027 to ensure that the decentralization of authority is properly supported by adequate financial transfers.