Holiday Allowances which Shock the Regions

ANTARA FOTO/ RENO ESNIR

Manpower Minister Hanif Dhakiri (right) inspects services at the opening of a command post for complaints on the provision of Idul Fitri holiday bonuses (THR) at the One Stop Integrated Service Center (PTSA), the office of the Manpower Ministry, Jakarta, Monday (28/5/2018). The post is intended to accommodate reports in the implementation of THR payments, from central to regional governments through the work services in the provinces and regencies/cities.

Government Regulation No. 19/2018 on the provision of holiday bonuses (THR) for civil servants has sparked problems in the regions. Not all regions are prepared.

The lack of preparedness of regions to pay the holiday bonuses is reflected in the Kompas piece, "Regions Asked to be Creative about THR", published on Wednesday (6/6/2018). Local governments are generally shocked by the provisions in Government Regulation No. 19/2018 because funds in the Regional Budget (APBD) to be prepared are much greater than expected.

According to the head of budgeting at the Yogyakarta Revenue, Financial Management and Assets Agency, Aris Eko Nugroho, the provincial government of Yogyakarta had initially prepared THR and additional months’ salary amounting to Rp 95 billion, but the amount to be paid swelled to Rp 128 billion. Surabaya Mayor Tri Rismaharini refused to give THR to civil servants if they are taken from the regional budget (APBD). Southeast Aceh Regent Raidin Pinim considered the bonuses to be a burden.

Government Regulation No. 19/2018 controls the provision of THR for civil servants, military personnel, police officers, state officials, government retirees and beneficiaries. The regulation was created to improve the welfare of the recipients and as a form of government appreciation for their devotion to the nation and state. The THR was given in May salaries, which included basic salary, family allowance, job allowance or general allowance, and performance allowance. The provision of an additional month’s salary is regulated under Government Regulation No. 18/2018 and will be paid in July 2018.

Article 4 of Government Regulation No. 19/2018 states that THR is paid in June, but can be paid the following month if it has not been realized. Article 9 Letter (b) states that the funds to pay THR are taken from the APBD, for civil servants who work at regional government offices, offices of the governors and deputy governors, regents and vice regents, mayors and deputy mayors, or provincial/city legislative council members. Fund for additional month’s salary are taken from the APBD.

A number of local governments had initially only budgeted the THR amounting to the basic salary without any allowances and without the additional month’s salary. When President Joko Widodo announced the provision of THR and an additional month’s salary, last May, followed by the issuance of the government regulation, several local governments reacted. The local governments were shocked and expressed their objections. The APBD has been burdened by many things. Several local governments had only accounted in their budgets the provision of THR by referring to the old regulations.

Vice President Jusuf Kalla asked local governments to be creative in budgeting so that they can pay THR and the additional months’ salary according to the rules. Finance Minister Sri Mulyani Indrawati explained that the provision of THR and the additional months’ salary was regulated under Law No. 15 of 2017 on the 2018 state budget (APBN). In accordance with the law, the 2018 State Budget is estimated to be in deficit of Rp 329.93 trillion.

Local governments\' shock and objections indicate that communication between central and local governments, with regard to funding, is smooth. If the additional months’ salary and THR had already been regulated under Law No. 15/2017, the regions should have better prepared themselves. This communication should be addressed so as not to burden the regions or create political drama in 2019.