What Prabowo Says About Cuts to Regional Transfer Funds

September 18, 2026 | 04:42 pm

TEMPO.CO, Jakarta - President Prabowo Subianto slams "suboptimal" regional governments' budget management, believing that funds channelled by the central government are often not used to support development and public services.

Prabowo revealed this is part of the reasons why the central government decided to cut regional transfer funds. He emphasized that the central government must ensure that the state budget is used effectively and extend direct benefits to all citizens.

He cited unused funds due to problems at the regional level. "It's odd sometimes, the regional governments did not spend the money. We have evidence. It's deposited in banks, for various reasons. Or there are conflicts between regents or governers with lawmakers, causing the funds to be unused," Prabowo said in the "President Answers" program broadcast on Wednesday, September 16, 2026.

He said this situation requires attention, as the purpose of regional fund transfer is to accelerate development and improve public welfare.

Regional governments, he said, are authorized to manage budgets according to local needs and priorities. However, budget use must remain effective and accountable.

Prabowo highlighted the development of basic infrastructure at the village level, which he considered still disproportionate to the budget allocated to the regions. "How long has this decentralization been going on? 25 years. We've distributed funds to each village. One billion. Over the past 10 years," he said.

"Why haven't bridges been built in villages? Even though the bridges cost only Rp400 million," Prabowo remarked.

President Prabowo also questioned the effectiveness of the budget disbursed by the central government to the regions. "Where did the money go?" he asked.

In 2026, the government reduced the regional budget ceiling compared to previous years. The government earmarked Rp650 trillion for 2026 regional transfer funds, a 24.7 percent drop compared to the same budget ceiling in 2025.

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