Hadi said in a recorded statement received here on Saturday that the recent meeting between governors and the Finance Ministry was not a form of protest, but rather an opportunity for regional leaders to convey suggestions and input regarding the transfer mechanism.
He explained that there are two transfer schemes in use: direct and indirect. The indirect transfer scheme covers several national programs implemented by the central government that benefit people at the regional level, such as the Free Nutritious Meal (MBG) program, which has an allocation of around Rp335 trillion (US$20.4 billion) in the State Budget.
He noted that some regional leaders expressed concern over the cuts, saying they could hinder the allocation of funds needed to fulfill political campaign promises.
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Hadi emphasized that the central and regional governments need to align their budget management to ensure that every program truly benefits the public.
“That’s what we are explaining — we are now coordinating between the central, provincial, and regional governments to improve budget governance and design programs that prioritize real impact on society,” he said.
Jambi Governor Al Haris, who also serves as Chairperson of the National Provincial Governments Association (APPSI), outlined several challenges arising from the reduction in regional budget transfers.
Among them are difficulties in paying incentives and managing operational costs.
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Haris also noted that many regions are struggling to balance the 2026 Regional Budget (APBD) due to limited allocations, reduced revenue sharing, and delayed disbursements.
Regions with small local revenues, he said, are particularly dependent on the TKD scheme and Village Funds. Reductions in these transfers could hinder the implementation of priority development programs.
He added that some regional leaders are concerned the cuts could also affect the performance and productivity of state civil servants due to delayed salary payments.
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Translator: Fathur Rochman, Mecca Yumna
Editor: M Razi Rahman
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