Jakarta, CNBC Indonesia – Officials in regional governments are worried that their agencies will collapse or go bankrupt as a result of the planned employee budget basket system policy that the central government wants to implement in the draft government regulations (RPP) regarding the management of state civil servants (ASN).

This concern about bankruptcy was conveyed by one of the North Konawe district government officials, Safruddin, at the ASN Management Arrangement event after Law no. 20 of 2023 concerning ASN, which was held Monday (6/11/2023).

He assessed that the burden on employee budgets using the basketball system would burden regional finances. Because, so far many regional governments have relied on the burden of their employee budgets on general allocation funds from the central government.

“Well, in the proportion that after the issuance of the ASN management structuring aspect, the birth of Law No. 20/2023 will of course be a burden and there will even be regions that will collapse, because the burden is based on regional capacity,” he said as quoted on Tuesday (7/11 /2023).

Konawe Regional Secretary, Ferdinand Sapan added, this problem is also caused by the APBD structure in many regional governments where the portion of original regional revenue is as high as 15% of each APBD, some even depend on 95% of their income from central government transfer funds.

“In practice, what you have included in this law has good basic principles, but in its implementation in the regions there are many obstacles and challenges that are not what you think,” he stressed.

Responding to this statement, Plt. Assistant Deputy for Talent Management and HR Capacity Building for PANRB Ministry Apparatus, Yudi Wicaksono, emphasized that the employee budget basket system will not make a region go bankrupt, because it is also burdened with paying regional employees.

He estimates that what could possibly happen is that there are employees in the agency whose salaries or income are below the new income range that the government will set in the RPP for ASN employee management. The RPP is a derivative regulation from Law no. 20/2023 replacement for Law no. 5/2014.

“I don’t think the imposition of a new HR budget will cause HR to collapse, sir. What might happen is that your employees will be paid below the salary range,” said Yudi.

Therefore, he suggested having a road map for dealing with employees who have the potential to earn below the new salary range in the future. Starting from a reduction to the relocation of employees to other areas that have larger budget or APBD space.

“When we simulated it for the first time, for the first migration, it could be that there are those who are below the new salary range. For this reason, every regional agency that has employees under the new salary range must have a roadmap for when the person concerned can be included in the range, how to mitigate it, that means there has to be a reduction,” he said.

Another option is that the region must be able to increase its share of regional revenue (PAD), or be able to increase the transfer allocation from the central government by strengthening the contribution of national priority achievements, the RB index, and the human resources budget which are reviewed by the Head of Bappenas, the Minister of Finance, the Minister PANRB, and the Ministry of Home Affairs.

“If the budget cannot increase, the PAD cannot increase or the top up from the center cannot increase, then the choice must be redistribution of employees in that agency,” said Yudi.

“We will have an exchange for ASN positions, hopefully it will be open, Konawe can see that in Sulawesi, which still needs employees at what level, with what formation, it will be open, hopefully it will be like that so that employees in your place can be encouraged to transfer to areas where the budget is still loose ,” he said.

If regions do not want to use a basket system for employee expenditure budgets, Yudi stressed, the government could return to the current expenditure system, with the portion of the budget for salaries being smaller than the incentives received. As a consequence, he ensures that retired ASNs will not improve and will continue to be small in old age.

“So that’s for the budget basket system, if not, we’ll go back to the current system where our salary is less than the incentive, ladies and gentlemen were prosperous when they were in office but as soon as they retired they immediately went into free fall. This is a choice, life is a choice, do we want a basketball system or “We are centralizing the system like now, so please discuss it later in the RPP discussion,” said Yudi.

Director of General Transfer Funds, Directorate General of Financial Balance, Ministry of Finance, Sandy Firdaus, added that from the simulation results of using the employee budget basket system, it is currently not possible for 100% of regions to implement it in the near future. Including the issue of implementing new salary ranges.

“Regarding regions that might collapse, this is actually still being simulated, what about this new range, whether 546 regions can implement everything straight away, even though the possibility is small, actually if it can be 100%, everything falls within the existing salary range, the possibility is actually small,” said Sandy.

However, he emphasized, what the government wants to change now is related to fulfilling the welfare of ASN. If the portion of the system’s employee expenditure budget is not changed, he estimates that there will be no improvement in employees’ income until retirement.

“If we talk about ASN management there are two things, not just salaries but what pattern we have formed, which we are trying to change, there are new breakthroughs from friends from the PANRB Ministry, once again this is a process, so we will wait for your input from the regions – the sample areas,” he said.

For information, the budgeting flow for the employee budget budget system will coincide with the proposal of program or activity plans and existing budgets in each agency.

The budget submission will be reviewed by the Head of Bappenas, the Minister of Finance, the Minister of PANRB, and the Ministry of Home Affairs by considering the contribution to achieving national priorities, the bureaucratic reform index (RB), and the human resources budget.

After that, the policy for each ministry, institution or region will be determined, regarding the budget, whether there will be an increase in that agency, or the portion of the employee budget will remain constant, or will it even experience a decrease due to the considerations of the three ministers.

If the specified employee expenditure budget decreases, then the agency must transfer or redeploy its employees to adjust the portion of the budget received, salaries will not increase, so the incentives received as income will decrease.

[Gambas:Video CNBC]

(mij/mij)