Central-Regional Fiscal Relations Law Scrapped Regional Autonomy

The House of Representatives (DPR) finally passed the Law on Central-Regional Fiscal Relations (UU HKPD) during the 10th plenary meeting on Tuesday (12/7). It is the last legislation process in Indonesia before the act is signed by the president and is officially enforced. The HKPD Bill was passed after Deputy Speaker of the House of Representatives Sufmi Dasco Ahmad, as the chair of the session, asked the factions present about it. The majority of the members approved the ratification of the HKPD Bill into law.

Only the Prosperous Justice Party (PKS) faction rejected the ratification. Ahmad Junaidi Auly, a member of the Finance Commission from the PKS faction, argued that many local governments in the provinces, cities, and districts rejected the HKPD Bill. "The spirit of regional autonomy does not exist in the HKPD. It is leaning towards recentralization," Ahmad said representing PKS' views at the meeting.

Meanwhile, Finance Minister Sri Mulyani assured that this regulation would optimize financial management in regions that still have a number of shortcomings at this time. "The HKPD Law will increase regional revenues at the regency/city level by 50 percent, ranging from Rp 61.2 trillion to Rp 91.3 trillion," she explained.