Indonesia Finance Ministry denies plan to pay civil servant salaries via cooperatives

Finance Minister Suahasil Nazara has clarified that the payment of civil servant (ASN) salaries will remain through the existing banking system. This statement follows a proposal from the Ministry of Cooperatives to explore using the Merah Putih Village/Sub-district Cooperatives as partners for salary and pension disbursements to expand the cooperatives' economic role.

The proposal has faced significant opposition. Members of the PDI Perjuangan party have called for the plan to be canceled, citing concerns over inefficiency and the lack of deposit insurance from the Indonesia Deposit Insurance Corporation (LPS) for cooperative funds. Critics argue that shifting salary payments to cooperatives could pose financial risks to millions of employees if the cooperatives face insolvency or mismanagement.

In a separate regional development, the Makassar City Government has extended the work contracts of 6,472 part-time government employees with work agreements (PPPK Paruh Waktu) to maintain local employment stability.