Regional Budget Boiling Point

August 11, 2026 | 04:55 pm

TEMPO.CO, Jakarta - A letter from the Ministry of Home Affairs arrived on the desk of West Sulawesi Governor Suhardi Duka on Sunday, July 5, 2026. It notified regional governments that the central government was compiling data on regions unable to cover personnel expenses, including the salaries of government employees under employment agreements (PPPK). The letter also ordered regional heads to submit data on the number of employees, spending amounts, and funding shortfalls.

But, Suhardi said, the reporting deadline was extremely tight. The letter instructed regional heads to submit the data to the Directorate-General of Regional Financial Development at the Ministry of Home Affairs no later than noon on Monday, July 6. "We quickly filled out the forms and sent the data to the Ministry of Home Affairs," he told Tempo on Tuesday, August 4, 2026.

For Suhardi, the letter was like an oasis in a parched desert. The West Sulawesi Provincial Government's coffers were running low. Suhardi and his officials were, in effect, counting down the days until they ran out of money to pay the salaries of about 4,000 PPPK employees, most of whom provide public services as teachers and health workers. This year, the West Sulawesi government had enough money to pay their salaries for only 10 months.

The problem began with the central government's cuts to regional transfer funds (TKD). West Sulawesi's Regional Budget allocation fell from Rp1.83 trillion (about US$102.8 million) last year to Rp1.67 trillion (US$93.8 million). The physical special allocation fund (DAK) disappeared, the general allocation fund (DAU) was reduced, and disbursements of revenue-sharing funds were held back.

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