Heaptalk, Jakarta — Minister of Home Affairs Muhammad Tito Karnavian has called on local governments (Pemda) to transform their mindset and prioritize increasing regional revenue rather than relying heavily on central government transfers.
“Local governments must no longer depend on central government funds but should focus on optimizing their revenue sources, particularly through Regional Original Revenue (PAD) and revitalizing Regional-Owned Enterprises (BUMD),” Tito stated during the National Coordination Meeting on Regional Finance (Rakornas Keuda). The 2024 APBD Award Ceremony, held at the Grand Sahid Jaya Hotel, Jakarta, on Wednesday, December 18, 2024.
Emphasizing Revenue Growth and Financial Surplus
Tito urged regional leaders to shift their focus towards generating income. “Leaders, especially regional heads and secretaries, need to rethink how to boost revenue, primarily from PAD and by revitalizing BUMDs. Regional Original Revenue (PAD) thrives only when the private sector is active,” he explained.
The Minister also highlighted the importance of maintaining a financial surplus where revenue surpasses expenditures. This allows local governments to fund impactful community programs, such as stunting prevention, free nutritious meals, land acquisition for public housing, education programs, and infrastructure development.
“Managing finances, whether at the national, regional, or household level, follows the same fundamental principle—income must exceed expenses,” Tito elaborated.
Tito stressed the significance of fostering regional financial independence. Areas with higher PAD than central government transfers are more autonomous and resilient. Local governments must evaluate and enhance their revenue generation strategies to achieve this.
“I want a thorough evaluation of revenue sources to identify opportunities for improvement,” he added.
Pro-People Policies in Housing and Public Services
The event was also attended by Minister of Housing and Settlement Areas Maruarar Sirait, who emphasized the government’s commitment to President Prabowo Subianto’s pro-people policies, particularly in providing affordable housing for low-income citizens.
“Our responsibility as state officials is to make processes easier, faster, and more affordable—if possible, free,” Maruarar said. He noted that collaboration among ministries, agencies, and local governments is vital to successfully implementing these initiatives.
State officials must focus on policies that simplify business processes and improve access to essential services, such as affordable housing, at the central or regional level.
“Cooperation, mutual respect, and transparency can have a greater impact than mere budget allocation. With collective efforts and public support, we can deliver housing solutions for underserved communities,” Maruarar concluded.
This renewed focus on revenue growth and pro-people policies aims to strengthen regional autonomy and enhance the quality of life across Indonesia.