Jakarta – Several regional administrations have unveiled austerity measures, including reduced workdays and remote work policies for civil servants, following the central government's decision to cut regional transfers (TKD) for fiscal year 2026.
One of these is the Bengkulu provincial administration, which is considering cutting civil servant allowances and reducing the standard five-day workweek to just three or four days, among other measures.
"This is part of our efforts to reduce spending on water, electricity, office supplies and other operational costs. We're also planning to halt programs that don't directly benefit the public," acting Bengkulu secretary Herwan Antoni said on Monday, as quoted by Kompas.com.
Bengkulu is set to see its TKD next year cut by nearly Rp 348 billion (US$21 million) for a total allocation of Rp 1.40 trillion, from Rp 1.75 trillion this year.
West Java Governor Dedi Mulyadi is also exploring remote work policies and trimming the province's civil service budget to cope with a projected Rp 2.46 trillion cut to its TKD allocation.
"We will not discontinue any programs, despite the budget cuts," Dedi said.
"The reductions will mainly focus on administrative expenses, including [for] office supplies, building maintenance, official trips, as well as meals, beverages and transportation for civil servants," he said.
In addition, civil servants in nonstrategic or low-productivity roles will be reassigned as school administrative staff to avoid new hires and improve civil service efficiency.
Similar austerity measures are also being implemented at the regency and municipal levels.
In Central Java, Surakarta Mayor Respati Ardi has announced a plan to reduce administrative costs 30 percent by instituting a once-weekly remote work policy for civil servants who do not work directly with the public.
"We will establish clear performance oversight for civil servants working remotely. As long as these performance goals are met, it won't matter whether they are physically in the office," Respati said on Monday, emphasizing the new policy would not compromise the quality of public services.
To further reduce costs, snacks served at official meetings will be minimized and civil servants will be encouraged to bring their own drinking water, while online meetings will be held whenever possible.
Surakarta's TKD is to be cut by Rp 218 billion next year, resulting in a projected Rp 161 billion deficit in the city's 2026 draft budget.
Meanwhile, Central Java's Cilacap regency administration is also considering implementing a remote work policy for civil servants after the central government decided to slash its TKD allocation by Rp 393 billion.
Cilacap Regent Syamsul Auliya Rachman said civil servants might be required to work from home once or twice a week to save on administrative and overhead costs, such as electricity.
"We will also reduce their work allowances, since several programs will be suspended as part of austerity measures. If those programs are cut, related allowances and bonuses must also be adjusted," he said on Friday, as quoted by Antara.
Regardless of the planned cutbacks, Syamsul emphasized that spending on education, health care and infrastructure would remain a priority for the regency.
Regional alarm
The central government has allocated just Rp 693 trillion for regional transfers in the 2026 state budget, around 20 percent less than the already reduced figure for this year and the lowest allocation in nearly a decade, even lower than the 2016 TKD.
Officials say the changes aim to improve budget efficiency and targeted spending, and that they are not related to concerns over weaker revenue collection this year.
Despite the sharp reduction, the government insists the move will stimulate economic growth, not hinder it, by reallocating funds toward national priority programs such as the free nutritious meal program, the food and energy self-sufficiency agenda and health care.
The government's move has alarmed regional leaders, many of who have warned that reduced TKD allocations could undermine local development, disrupt public services and even jeopardize civil servant salaries. Most provinces remain heavily dependent on central government funding as their main income source.
On Oct. 7, at least 18 governors of provinces across the country, from westernmost Aceh to the easternmost Papua Highlands, along with delegates from eight other provinces under the Association of Provincial Administrations (APPSI), met with Finance Minister Purbaya Yudhi Sadewa at his Central Jakarta office to urge the government to reconsider the massive cuts to TKD allocations in the 2026 budget.
While Purbaya acknowledged the governors' concerns, he called on regional administrations to improve fiscal management, particularly by accelerating budget disbursements.
He also pointed out that while regional transfers had been reduced by around Rp 200 trillion, total funding for regional programs, including centrally managed initiatives, had actually risen from Rp 900 trillion to Rp 1.3 quadrillion.
Experts say the move runs contrary to President Prabowo Subianto's promise of greater regional autonomy and risks fueling political tensions if it is not managed carefully.
Several regions have faced public backlash for introducing steep hikes to local taxes in a bit to offset the decrease in TKD this year. In August, large-scale protests erupted in Pati, Central Java, after regent Sudewo increased land and building taxes up to 250 percent.
The unrest spread to other regions implementing similar increases, and demonstrations broke out in Bone regency, South Sulawesi, while calls for protests emerged in Cirebon, West Java, and Jombang, East Java.