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View all search resultsCut in transfers worries regions
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Police officers stand guard in front of Bone regency office in South Sulawesi, on Aug. 19, 2025, before a rally in protest at a property tax hike. (Kompas.com/Abdul Haq Yahya Maulana T.)
L
ocal administrations are showing signs of unease over the central government’s plan to slash regional transfers (TKD) next year, which experts believe could put a strain on regions’ programs and erode the hard-won decentralization established after the New Order era.
As part of President Prabowo Subianto’s ambitious plan to boost state revenue, the government plans to reduce the allocated regional budget by nearly 25 percent to Rp 650 trillion (US$40 million) in 2026 to be used for programs under ministries and government agencies.
The figure, announced during the annual state budget address before the People's Consultative Assembly (MPR) on Aug. 15, is a steep drop from this year’s regional budget outlook of Rp 864 trillion and the lowest within the last five years.
The plan has since caused concern among local leaders over their programs, after regions already had their spending cut earlier this year to fund the President’s flagship free meals program and other costly initiatives.
Yogyakarta Governor Hamengkubuwono somberly accepted the plunge in regional funding and said it would hinder Yogyakarta’s usual programs.
“All programs will still run, but only on a small scale and just the priorities,” he said, as quoted from Tribunnews.com.
Yogyakarta, a designated special region, will be given Rp 500 billion in 2026, only half of the budget it received this year. Other special autonomy regions like Aceh and Papua will also see their 2026 budgets decrease.
