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View all search resultsGovt revises 2026 state budget, increases regional spending
Following deadly protests and unrest that shook the country last month, the government has decided to increase total spending to Rp 3.84 quadrillion (US$232.4 billion), including an increase in regional spending to Rp 693 trillion.
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Thumb up: Finance Minister Purbaya Yudhi Sadewa reacts to journalists after his first hearing with the House of Representatives’ finance commission on Sept. 11 in Jakarta. (Antara/Dhemas Reviyanto)
T
he House of Representatives approved on Thursday a proposal from the government to increase the 2026 state budget that would include bigger transfers to regions.
Following deadly protests and unrest that shook the country last month, the government has decided to increase a total spending to Rp 3.84 quadrillion (US$232.4 billion), including an increase in regional spending to Rp 693 trillion. The higher budget allocation is set to deliver bigger transfers for regions with special autonomy like Aceh and Papua provinces and those with special status like Yogyakarta.
The larger spending has enlarged the budget deficit for next year to 2.68 percent of GDP, from the previously planned in August at 2.48 percent. The deficit plan, however, is still lower than that of this year that has been projected to reach 2.78 percent.
“The [regional transfers] increase is to respond the requests from House commissions and also overwhelming news coverage on the budget,” said House Budget Committee chairman Said Abdullah, during a hearing with the Finance Ministry.
Previously, the government had proposed a significant cut of 25 percent in regional transfers for next year, reducing the central support from Rp 864 trillion this year to Rp 650 trillion in the August proposal.
The cut in regional spending has been responded by steep increases of property taxes in some regions, triggering protests in Pati, Central Java, and other regions.
With the larger spending plan next year, the government also targets bigger revenue in 2026 at Rp 3.15 quadrillion. To fulfill the target, the government has aimed to increase revenue, among others, from customs and excises at Rp 336 trillion and non-tax revenue at Rp 455.2 trillion.
