IJTC Ilomata International Journal of Tax & Accounting P-ISSN: 2714-9838; E-ISSN: 2714-9846 Vol. 1 No. 4 October 2020 pp. 193-209 https://www.ilomata.org/index.php/ijtc Decrease in Labor Levels in the Covid-19 Government Budget Lesi Hertati1 , Wahyudin Zarkasy2, Mohammad Adam3 , Haryono Umar4, Harry Suharman5 1Lecturer, Faculty of Economics of Accounting, STIE Rahmaniyah – Indonesia 2, Lecturer Faculty Economics and Business of Accounting, Padjadjaran University, Indonesia 3Lecturer Faculty Economics of Management Sriwijaya University, Indonesia 4Lecturer Faculty of Economics and Business of Accounting, Perbanas University Correspondent: hertatilesi@yahoo.co.id Submitted : September 12, 2020 Revised : October 10, 2020 Published : October 31, 2020 ABSTRACT The overall budget of the government affected by covid-19 plays an important role in contributing to the welfare of the people who are being hit by a corona outbreak and more importantly is how the government's focus in determining the composition of the government budget itself. Determination of the composition of the government budget is a strategic plan to achieve the population safety targets of the covid-19 outbreak and at the same time to emphasize the human resource sectors because all residents are required to lockdown. The government budget component is related to the provision of basic food and health assistance in the regions and the provision of basic community needs such as free food and free health. Government budget allocations to the food and health sectors for free encourage an increase in the corona outbreak so that the population death rate decreases more broadly. A small enemy that is not visible to the naked eye but enough to stifle the economy and employment so that development is stalled in all directions, poverty rates increase, economic growth is paralyzed. The government is responsible for the allocated financial allocations for health and food for the residents of their respective countries. The availability of food is influenced by the availability of local government budget in providing government policies. Regions that have better regional income budgets compared to other regions will tend to have high levels of regional income budgets. Government expenditure is closely related to community life processes due to the co-19 pademic as a result of the government's success in handling co-19 nationally or regionally. This research method is descriptive and verification method, the analysis tool is structural equation modeling (SEM, Lisrel). The results showed that the decline in labor affected Government Budget Period of the Covid-19. Keyword: Decrease in Labor Rates, Covid-19, Government Budget INTRODUCTION The attention of the world is stirred by the plague of co-¬ 19 which quite shocks the people wherever they are so that it is merely the economic boom and the work of humankind in the equator. The wheels of the economy are totally paralyzed by governments made helpless all over the world. The role of the government is very important in social assistance such as distribution of basic food and free health care. Iron Road Limited. (2015) states that the government sector can influence directly or indirectly on economic growth which is still chaotic in lanta corona. While Luke, & Emmanouil, (2019) stated that government policies can affect long-term growth through three fiscal instruments, namely: tax free, clean water in tackling government spending and budget balance from the economic crisis caused by corona https://www.ilomata.org/index.php/ijtc mailto:hertatilesi@yahoo.co.id Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 194 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 (MacKinnon, 2002) . These three components affect the level of efficient use of resources, accumulation of production factors and technological development (Martin, 2010). The success of development in Indonesia during the 1980s could not be separated from the substantial development funding support that originated from state revenue due to high oil prices and capital inflow flows that flowed in from outside (Mills, 2010). But in the next period the government faced various difficulties in mobilizing funds to finance food and public health affected by corona (Parker, 2020). The decline in government savings and reduced capital inflow have an effect on the government's ability to finance corona, including a decrease in central government assistance to local governments to finance basic food and free medical treatment at regional levels. The government has an important and very strategic role (Plummer, et, all, 2018). The tendency of openness of the global economy that leads to economic integration will have an impact on the national economy which will ultimately also affect the economy at the regional level. Factors of production stop moving between countries and regions which cannot follow market mechanisms and the stagnation of economic sectors does not grow. This model will open up opportunities for areas with sufficient resources to grow leaving areas that have limited resources. Therefore, in the context of regional development, the government must pay attention to the inter-sector linkages and the inter-regional linkages based on the principle of interrelation and dependence (Hertati, et, all, 2020: Argent, 2013: Boschma, 2015: Fielke, 2017: Gunton , 2003). Government policies relating to lockdown focus of basic food needs to replace spending on households who cannot work because of financial limitations and government involvement in providing good services (Hertati & Syafarudin, 2018: MacKinnon, et, all, 2009). Free social financial and basic food assistance to reduce the burden on the community with government support. In connection with this in an effort to spur the stopping of economic growth the government is a private sector partner in growing basic food aid activities. Government policies in the context of encouraging the provision of groceries due to the weakness of the regional economy are expected to create efficiency and increase regional economic activity. Each region requires free food services that support the burden of people who cannot work due to covid-19. Regional free basic food funding from central and regional government funds (government investment) is intended to stimulate other sources of funds to ease the burden on society, but in reality most regions are still very dependent on funds from the central government. This can be seen from the large share of central government funds reaching around 70% - 80% in the regional income and expenditure budget (Hertati & Syafarudin, 2018: M., Marshall, et, all, 2007). One government policy that is closely related to efforts to mobilize factors of production is through fiscal policy. In modern economic management fiscal policy contains three main objectives namely; The first is to influence the allocation of economic resources (resource allocation). The purpose of fiscal policy in this context is to find the right balance both in real and nominal terms between the allocation of economic resources to the public sector and the opportunity cost of transferring economic resources from private entrepreneurs. Second, is to carry out the process of redistribution of wealth and income among economic groups in society. In this case fiscal policy aims to obtain an interpersonal balance in net income or welfare. Third, is to determine the direction of growth and stability of the national economy. Therefore fiscal policy must be able to engineer actions that will facilitate the optimal use of resources such as Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 195 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 natural resources, human resources and financial resources (Hertati, et, all, 2020: MacKinnon, et, all, 2009). With regard to financing development in the regions, basically development in the regions can be financed by the regional government itself from the results of the mobilization of tax and retribution funds and other levies reflected in the amount of local revenue. Development funding in the regions is also funded by the central government through the state budget income in the form of providing assistance to regions outside the autonomous region subsidy (before the enactment of the Regional Autonomy Law). Sources of funds for social assistance in the region both from the regional government itself and from the central government are government investment (government sector). It is expected that from this government investment it can reduce the economy in the regions and cities that increase the capacity to provide large-scale social assistance services to the community which in turn can help the people's economy and do not have income due to corona income between individuals and between sectors in the region. Another factor affecting regional economic growth is the influence of sectoral and regional policies in the distribution of priority social assistance funds to regions through channeling aid funds between levels of government. Socio-economic assistance in a region is very dependent and influenced by internal factors, namely the economic carrying capacity of the region and external factors, namely the carrying capacity of external support, in this case the assistance of the central government. Development of central government expenditure based on DIK / DIP allocation by province. Central government expenditures in the form of donors of basic food assistance and free health services during the corona period are realized by the regional and provincial heads of the regions which are the central government funds used in the corona period assistance whose financing is borne by the State Budget (APBN). The allocation of central government funds to the regions is provided through assistance, namely the Autonomous Regional Subsidy (SDO) and free basic food and health assistance from the Corona through INPRES funds. Autonomous Regional Subsidies (SDO) are given to the regions in order to finance the administration of the government in the regions while the Inpres funds are intended to assist the regions in financing the activities stipulated in the free basic food assistance budget. The consequence of the high co-19 development is the limited economic capacity to create jobs. Economic growth has fallen sharply which tends to be driven by an increase in consumption not proportional to the growth of the labor force will have implications for increasing the number of unemployed. Efforts to reduce the number of open unemployment through increasing basic food assistance and free health so that the economy continues to recover are pursued, among others, through government budget policies at both the central and regional levels. Government policies to increase the state budget even with the consequence of increasing the fiscal deficit and focusing its spending on sectors where free food and health assistance are expected to reduce the burden on the population in a country so that the rate of unemployment can be overcome (Martin, 2012: Measham ,, et, all, 2019: Mee, et, all, 2004: Nelson & inter, 2002). Economic growth greatly affects job creation, especially in economic sectors that have a high employment elasticity. Increased economic growth will increase employment when there is an increase in investment. Economic growth in recent years has tended to be driven by increased consumption so that despite economic growth it has been very slow in job creation. National economic growth experienced a sharp decline in 2020. The decline in national economic growth Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 196 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 in 2020 was caused by world oil prices which dropped dramatically, the epidemic covid-19 which also affected regional economic growth. The decline in world oil prices was followed by the worldwide co-19 pademic outbreak and the reduced flow of capital inflows into the country. This condition affects the diminishing state finances and has an impact on the ability of the government to finance food consumption due to lockdowns by the central government to stay at home not doing work outside the home. The economic growth model is expressed as a form of production function that describes the relationship of input and output in which the input variable consists of capital, labor and technology. The variable of labor becomes important because labor plays a dual role, in addition to being a subject that will be a source of other resources, it is also an object of development. sector due to corona outbreaks struck. The decline in labor in various economic sectors is closely related to the economy. The economic decline in the long run, following the decline in national income growth, will bring a fundamental change in the structure of the economy, from the traditional economy (agriculture as the main sector) to the modern economy (manufacturing) (Poruschi, et, all, 2020). Decline is defined as a series of changes that are interrelated to one another in the composition of aggregate demand, foreign trade (exports and imports), aggregate supply (production and use of factors of production such as the decline in labor and capital (Ryser, et, all, 2019 : Scearce, et, all, 2019) Environmental uncertainties in the economic sector into two sectors, namely: (1) The traditional sector (agriculture), is a subsistence and overpopulated rural sector, which is characterized by a marginal productivity decline in labor, almost equal to zero, (2) the modern sector (industry) with high productivity is a decrease in labor from all sectors, production in the modern sector will decrease and the benefits derived will decrease as well.The process of decreasing growth and decreasing employment opportunities in the modern sector continues until all decline labor in all traditional sectors which are not absorbed by the sector industry. This process will stop when marginal productivity in all sectors has a corona impact with wage levels falling above the average even zero income line (Scearce, & Fulton, 2004). The characteristics of the decline in labor occur due to factors such as the following: that is: 1. Open unemployment. It is unemployment based on the characteristics of the first is open unemployment the situation of someone who does not work at all and is trying to find work. Open unemployment is caused by employment that is not available or is not suitable between job openings and educational background. 2. Seasonal Unemployment is when the corona season, rainy season rubber tappers and fishermen all affected cannot work appeal the government has to lockdown because the covid-19 outbreak cannot do their work and is forced to be unemployed. In addition, in the dry season the farmers cannot do the work of the government period, the rubber civil servants, rubber tappers, fishermen and farmers and so on do not do other work so they are forced to be unemployed. Unemployment like this is classified as seasonal unemployment. Government spending reflects government steps to influence the economy through fiscal policy. In a broad sense, fiscal policy is not only related to the allocation and regulation of the composition of expenditure, but also relates to how the government finances the expenditure. Financing of government expenditure can come from: (i). tax, (ii). loans or bond sales, (iii). printing money (seignorage), and (iv). sale of government assets (privatization). Tonts (2013, Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 197 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 stated that tax is the main source of funding for government spending to improve the welfare of society. The imposition of certain types of tax will have a different effect on economic growth. If the government imposes a lump-sum tax on the community, the effect on investment and growth is positive but if the tax what is imposed is income tax that can reduce investment and economic growth (RDA Limestone Coast, 2019: Scearce, & Fulton, 2004). Financing government expenditure through loans or the sale of government bonds will add to the wealth and income of the community in the future but the community has a future responsibility in the form of a bond tax. Funding through debt is in principle the same as financing expenses through tax collection because debt is equivalent to tax in the future. While financing government spending through printing money (seignorage) will drive inflation rates (Tonts, et, all, 2012). Government expenditure consists of two, namely routine expenditure (current expenditure) and capital expenditure / expenditure (capital expenditure). Routine expenditure is intended to finance the operational activities of government in providing services to the public. Routine government spending is to meet the internal needs of government activities so that it has a negative effect on growth (Barro; 1990). Whereas capital expenditure is to finance the construction of physical infrastructure and facilities. Government spending on social and economic overhead will open up employment opportunities, increase national income and in turn increase economic capacity (Van Staden, 2019). Tonts, (2014) measured the role of government through the approach to the volume of government spending in the form of: i) purchases of goods and services, ii) transfers of income to residents, companies and governments, iii) interest payments. This approach illustrates that the role of government spending is very important to the economy, especially for the supply of public goods. Van Staden (2019) and Van't Klooster, et, all, (2006) provide arguments about the importance of government spending on helping the people's economy when environmental insecurity is affected by corona outbreaks in the allocation of economic resources for social assistance such as free food supplies. This approach explains that the efficiency of government spending can be achieved if the marginal benefit is the same as the marginal cost. The characteristics of the government budget affected by the corona outbreak are: as follows: 1. Rearranging expenditure priorities. The government must determine the priority scale by sorting the budget according to the level of urgency. The government can refocus on the budget, especially in the health and social sectors. Refocusing on this expenditure budget is also needed because of declining income budget assumptions. 2. Reallocation of shopping. The first priority is now heading towards dealing with Covid-19 and its various domino effects. This activity can be done by reducing / temporarily halting infrastructure development activities, as well as other investment activities allocated for the handling of Covid-19 countermeasures. The government can also cut down certain expenses such as expenses for official travel, meeting expenses, technical guidance, counseling, and the like to be diverted to the handling of Covid-19. 3. Utilization of the excess budget balance (SAL), endowment funds, funds controlled by the government with certain criteria, and funds managed by BLU / BLUD. Central and local government agencies can utilize the funding sources in accordance with their intended use to handle the impact of Covid-19 and prepare for the recovery period. Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 198 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 4. Establishing a policy of relaxation of central and regional taxation. Providing stimulus to the business sector and the community, it is necessary to reduce expenses, reduce tax rates, and extend the time for exercising rights and fulfilling tax obligations. 5. Aligning the implementation of the legal umbrella and intensive communication with various parties. Intensive communication must also be built properly, especially between the executive as the implementer of the policy with the legislative body, the examining / supervisory agency, law enforcement, including the community. 6. Encourage the involvement of the examining, supervisory and law enforcement agencies, namely BPK, BPKP, Inspectorate, and KPK in overseeing Covid-19 handling funds, especially in the procurement of goods and services (PBJ), so that they always adhere to the PBJ principles in emergency situations. 7. Accelerating the transfer of the central government to regional governments. The smooth transfer of funds from the center to the regions is one of the keys to solving the funding problem to overcome Covid-19 in the regions, because the regional government will be very dependent on the smoothness of the transfer of funds from the center. 8. Adjustment to the use of State Capital Participation in SOEs. Plans for allocating PMN to certain SOEs can be altered according to the needs of handling Covid-19. 9. Massive fundraising from businesses and the public can be a source of income that is used effectively and accounted for in accordance with the provisions. Hertati, et, all (2019) stated about the relationship of decreasing labor and income through free social assistance to ease the burden on the people affected by corona. Then Hertati (2020) states that high unemployment because people cannot work can be attributed to lack of capital relative to meeting the necessities of life. When economic growth plummets and is sustainable so as to decrease production capacity, there will be a reduction in employment opportunities with a high level (Watkins, 1963). Increased unemployment and underemployment in economic activities that have low levels of productivity are therefore seen to reduce the level of labor affected by corona (Markey, et, all, 2019). Fiscal policy instruments include government budget and revenue, government expenditure consisting of routine expenditure and social assistance expenditure. Routine expenditures are intended to finance social assistance activities at the national and regional level. Government expenditure is a form of government investment (government investment) which is allocated for free food staples, is an investment in human resources in the health sector and investment in research and development (R&D). Government investment expenditure will increase the quantity of production inputs and can reduce the quality of private sector production inputs which in turn will reduce productivity and long-term economic growth due to corona outbreaks sweeping around the world (Manalo, et, all, 2015: MacKinnon, et, all, 2009). Fleming (2015) states that government intervention in the economy is likely to increase, measured based on the comparison of government spending on national products. The relationship between government spending states that in the initial stages of economic growth the ratio of government investment is greater than the ratio of total investment or in other words the ratio of government expenditure to national income is relatively large. This is because in the initial stages the government must provide various infrastructure. In the next stage, government investment is still needed to spur growth followed by an increase in private investment. Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 199 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 Empirical studies that examine the relationship of government spending to economic growth conclude that an increase in government spending will encourage economic growth. Increasing government spending is a necessity but the problem is how the government finances the expenditure. In a theoretical arrangement, financing government spending can be done through several sources, namely: (i). tax revenue, (ii). printing money (seignorage), (iii) loans and (iv) asset sales (privatization). The government can optimize tax revenues or through loans to finance its expenditure. Financing of local government expenditure in the financial relationship between the central and regional governments can be done through decentralization, deconcentration and co-administration mechanisms. Financing of government expenditure through the decentralization mechanism comes from the region's original revenue and the balance funds that are charged in the APBD of each region. While financing through the mechanism of deconcentration and assistance tasks is the responsibility of the central government and is charged to the State Budget. Decentralized and deconcentrated systems have an impact on government spending patterns which in turn results in resource transfers, incidence and output effects. Government expenditures that are directly related to a reduction in capital for decreasing production are classified as government spending which is government investment in society due to the corona outbreak. The source of basic food needs in the region can come from the local revenue collected by the regional government through taxation and regional levies. In addition, funding for the distribution of basic food and regional health facilities can also come from transfers and assistance from the central government to the regions. All of this is local government revenue and subsequently allocated to funding semabako in the region based on strategic plans that have been prepared by each local government. The allocation of central government funds through sectoral projects and social assistance will increase the corona outbreak of the region's capacity to provide services to the community through increased provision of economic infrastructure will strengthen regional competitiveness to distribute free spells. A region that is relatively advanced and has better infrastructure will potentially become a private investment destination. The results of research conducted by the Center for International Private Enterprise (CIPE) mention the factors that influence the flow of bansosoi sorted according to the importance of their respective roles including: characteristics of the Akibar corona community so that access to markets, labor, exchange risk, capital repatriation, protection copyright, trade policy, government policy, tax rates and intensive, political stability, macroeconomic policy and total stop (RQ, Shi, X., Cronshaw; 2018). Hayter, (2008) examined a study of the effects of government spending on free food assistance and at the same time improving the distribution of income. The development of the study was triggered by the hypothesis that there was a divergence between the distribution of free food staples and improvements in the standard of living of the people caused by the allocation of government spending. Hyndman, et, all (2008) stated that some previous studies used national aggregate data in measuring research variables so that the estimation process was carried out using time series data. In this study variable levels of government spending are broken down according to the level of government (level of government). This is expected to provide more information and scope of analysis on the effects of government spending on free social assistance on the growth of people's lives that are required to be in the house. The study of the effect of government spending based on the level of government (level of government) was conducted by Halseth, et, all (2014). The study only looked at the effect of Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 200 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 government spending at three levels of government (federal, state and local) on co-19 government spending on decreasing labor rates (Hyndman, et, all, 2008). The researcher not only analyzed the effect of government spending at various levels of government on social assistance but also analyzed its effects on the decline in labor, humanitarian impact of the corona outbreak affecting populations worldwide. Research Hypothesis: H1: The effect of a decrease in labor figures on co-19 government spending. Figure 1: Research conceptual framework METHODS The target population of this study is small and medium enterprises in Indonesia. Keep in mind the conceptual model shown in Figure 1, the review instrument established by utilizing previous studies. The characteristics of the variable hypothesis were designed using SEM-Lisrel five answers from 1 to 5. The measurement items of the current study consisted of two variables which included emergency scientific discoveries during the co-19 period government expenditure, a decrease in labor rates. The data of this study were collected using a questionnaire through the google box directly and sent a letter and then collected from 600 small and medium businesses in Indonesia that are related to which collected 215 samples. After sending the google box to small and medium-sized businesses in Indonesia that are directly related by distributing questionnaires to them for their responses. The selection process and related small and medium businesses in Indonesia are very important for data collection for researchers, when investigating creativity, emphasizing sales centralization both online and at the counters giving meaningful responses (Sugiyono, 2013). Therefore, a total of 600 questionnaires were sent and distributed to all small and medium enterprises in Indonesia 215 samples responded. Overall, the data collection process was taken for 1 month and this research was not funded by any association. Investigation has also followed the rules of Gujarati, (2003) in considering moral and ethical actions. Ghosh, et, all (2013) to measure reliability in SEM variance) can use composite reliability (internal consistency reliability) and variance exctract measure (variant extract size) as follows:  GHCKLAY .= Where : Y: gross domestic product A: technological level L: labor K: private capital Mass Unemployment Decreasing Labor Rate Open Unemployment Covid-19 Epidemic Prevention Process Future Government Expenditure s Covid- 19 Preparation Of Priority Scale Belanja Reallocation of shopping Utilization of the Budget Balance Participation of State Capital Accelerate government transfers involvement of the examining Aligning legal umbrella Establish a relaxation policy Fundraising for donations Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 201 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 HC: human capital G: government expenditure β, δ, γ, Φ, are the parameters to be tested RESULTS AND DISCUSSION Validity test is done which is used to determine the eligibility of items in the questionnaire to determine the variables and reliability test to measure the reliability of the object being measured. Data analysis was performed by descriptive analysis and verification. Descriptive analysis is carried out with balanced categorization using quartile range (Sugiyono, 2013). Verification analysis used to test the hypotheses in this study is to use a structural component of the modeling equation (SEM, Lisrel) or variance-based known as SEM Lisrel. the decrease in labor figures towards the government budget for the co-19 period will be revealed through the crafter's response to the statements submitted on the questionnaire. Based on the calculation of the percentage of score crafters answer obtained results as shown in the following table: Table 1 Recapitulation of Research Variable Response Results No Variable Average Percent Category 1 Decreasing Labor Rate 7,49 69,84 High 2 The Government Budget Period Covid- 19 9,01 95,1 High Source: Recapitulation of Research Variable Response Results Based on table 1 above, it is known that the variable decrease in labor rates obtained a score presentation of 69.84% which was categorized high, and became the highest score compared to the scores of the other variables studied. This score is obtained by comparing the actual with the ideal score. Based on the results of these calculations where the reduction in labor numbers is very high, which means it is in accordance with the initial phenomenon that the authors found in the field, where the results of the Decreasing Labor Rate on the Government budget period co-19 have been said to be good but not optimal. The results of data processing describe a decrease in the number of workers in general are in the high category. These results explain the level of good government capability in interpreting each of the handicraft business activities he carries out which is affected by the corona he believes in giving rise to a wise and open attitude, and the government budget during the co-19 period rises high due to a corona outbreak in business. The variable decrease in labor rates on a practical level, decreases sharply shows a decrease in labor numbers due to corona engulfing the population of the entire world in analyzing problems, being able to be flexible when dealing with various problem situations, and having a clear vision in facing and solving every business problem. Small scale business owners are often deemed not to have a good ability to understand a problem holistically, because in general it has a low level of education. The small business scale also causes them to be often seen as having no business vision that goes beyond profit making and survival. The results of the study show the opposite, where based on responses to each item the statement shows that the artisans generally have a high co-19 government expenditure. This condition is caused by crafters who are business owners who are almost always faced with the risk of uncertainty in the business environment such as changes in government policies Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 202 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 for lockdowns, limited supply of raw materials, economic situation due to unstable corona, or changes in market trends that demand they can minimize any potential business risks quickly and accurately. The business environment causes them to become unemployed to face difficult business situations. Experience in overcoming each of these business problems encourages a broad and holistic mindset in understanding each problem and forming wiser personality traits. This causes the craftsmen to have the ability to understand each problem and relate it to social and spiritual values that have a broader range. Table 2. Recapitulation of Results of Dimensions and Indicators of the co-19 Government budget Dimensions and Indicators Loading factor The loading factor squared Error Information PATK 1 0.714 0.510 0.890 Valid CR = 0.891 AVE = 0.577 CA = 0.856 Reliabel PATK 2 0.714 0.510 0.790 Valid PATK 3 0.714 0.510 0.660 Valid PATK 4 0.714 0.510 0.790 Valid PATK 5 0.714 0.510 0.890 Valid PATK 6 0.714 0.510 0.730 Valid PATK 7 0.714 0.510 0.890 Valid PATK 8 0.714 0.510 0.670 Valid PATK 9 0.714 0.510 0.890 Valid PATK 1.1 0.844 0.713 0.287 Valid CR = 0.824 AVE = 0.611 CA = 0.678 Reliabel PATK 1.2 0.844 0.933 0.287 Valid PATK 2.1 0.844 0.713 0.287 Valid CR = 0.824 AVE = 0.611 CA = 0.678 Reliabel PATK 2.2 0.844 0.813 0.287 Valid PATK 3.1 0.844 0.713 0.287 Valid CR = 0.814 AVE = 0.711 CA = 0.678 Reliabel PATK 3.2 0.844 0.913 0.287 Valid PATK 4.1 0.844 0.713 0.287 Valid CR = 0.924 AVE = 0.711 CA = 0.978 Reliabel PATK 4.2 0.844 0.813 0.287 Valid PATK 5.1 0.844 0.913 0.287 Valid CR = 0.924 AVE = 0.611 CA = 0.678 Reliabel PATK 5.2 0.844 0.713 0.287 Valid PATK 6.1 0.844 0.773 0.287 Valid CR = 0.724 AVE = 0.711 CA = 0.678 Reliabel PATK 6.2 0.844 0.713 0.287 Valid PATK 7.1 0.844 0.753 0.287 Valid CR = 0.824 AVE = 0.811 CA = 0.678 Reliabel PATK 7.2 0.844 0.913 0.287 Valid PATK 8.1 0.844 0.713 0.287 Valid CR = 0.824 AVE = 0.811 PATK 8.2 0.844 0.813 0.287 Valid Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 203 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 CA = 0.678 Reliabel PATK 9.1 0.844 0.743 0.287 Valid CR = 0.824 AVE = 0.911 CA = 0.878 Reliabel PATK 9.2 0.844 0.813 0.287 Valid Source: Data processed in 2020 Based on Table 2 the Government budget model co-19 period with 9 dimensions can be declared already valid, because it has a loading factor value (λ) of more than 0.5. Judging from the Composite Reliability value greater than 0.7 (CR = 0.891), the Average Variance Extract value is more than 0.5 (AVE = 0.577), and the Cronbach Alpha value is greater than 0.7 (CA = 0.856). This means that the dimensions and indicators formulated in the Government Budget variable measurement model in the co-19 period are valid and reliable. Following is the Goodness of Fit (GOF) results table in the Final Model: Table 3. Goodness of Fit (GOF) Results in the Final Model No Criteria Limit Value Results Conclusion 1 2-chi square, Significance probability p-value ≥ 0,050 atau = 0,000 0,000 Fit 2 GFI > 0,90 0,934 Fit 3 AGFI > 0,90 0,947 Fit 4 CFI > 0,95 0,983 Fit 5 TLI atau NFI > 0,95 0,971 Fit 6 RMR ≤ 0,10 0,081 Fit 7 RMSEA ≤ 0,08 0,066 Fit Source: Data processed in 2020 Table 3 describes that the final CFA model of spiritual intelligence formed has fulfilled several Goodness of Fit (GOF) statistical criteria such as 2, GFI, AGFI, CFI, TLI or NFI, RMR, and RMSEA, so that the measurement model of Government Expenditure covid-19 meets the criteria of a good measurement model (fit) and can be used as a manifestation for the formation of a full model. Goodness of Fit test results in the final model of the 19th Government Budget period obtained as shown in Table. Next Table 1 Recapitulation of Dimension Results and Indicators for reduction in labor figures Dimensions and indicators. Table 4. Recapitulation of Dimension Results and Indicators for decreasing labor figures Dimensions and indicators Dimensions and Indicators Loading factor The loading factor squared Error Information PATK 1 0.714 0.510 0.890 Valid CR = 0.824 AVE = 0.611 CA = 0.678 Reliabel CR = 0.824 AVE = 0.611 CA = 0.678 Reliabel PATK 2 0.714 0.510 0.890 Valid PATK 1.1 0.844 0.743 0.287 Valid PATK 1.2 0.844 0.743 0.287 Valid PATK 1.3 0.844 0.743 0.287 Valid PATK 2.1 0.844 0.743 0.287 Valid PATK 2.2 0.844 0.743 0.287 Valid PATK 2.3 0.844 0.743 0.287 Valid Source: Data processed in 2020 Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 204 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 Table 4 describes that the final CFA model for the reduction in the number of workers formed has fulfilled several Goodness of Fit (GOF) statistical criteria such as 2, GFI, AGFI, CFI, TLI or NFI, RMR, and RMSEA, so that the measurement model for Declining Labor Rates meets the criteria of a good measurement model (fit) and can be used as a manifestation for the formation of a full model. In SEM analysis An indicator is said to have good validity if it has a factor loading value greater than 0.70. While loading factors 0.50 to 0.60 can still be maintained for models that are still in the development stage (Ghosh, et, all 2013). Evaluation of the value of construct reliability is measured by composite reliability. Each construct is said to be reliable if it has a composite reliability greater than 0.70 and AVE greater than 0.50 (Gujarati, 2003). Table 5. Goodness of Fit (GOF) Results in the Final Model No Criteria Limit Value Results Conclusion 1 2-chi square, Significance probability p-value ≥ 0,050 atau = 0,000 0,000 Fit 2 GFI > 0,90 0,934 Fit 3 AGFI > 0,90 0,947 Fit 4 CFI > 0,95 0,983 Fit 5 TLI atau NFI > 0,95 0,971 Fit 6 RMR ≤ 0,10 0,081 Fit 7 RMSEA ≤ 0,08 0,066 Fit Source: Data processed in 2020 Table 5 describes that the final CFA model for the reduction in the number of workers formed has fulfilled several Goodness of Fit (GOF) statistical criteria such as 2, GFI, AGFI, CFI, TLI or NFI, RMR, and RMSEA, so that the measurement model for the reduction in labor numbers meets the criteria of a good measurement model (fit) and can be used as a manifestation for the formation of a full model. Goodness of Fit test results on the final model of the reduction in labor figures obtained results as shown in Table. Next Table 1 Recapitulation of Dimension Results and Indicators for reduction in labor figures Dimensions and indicators. Declining output growth rates and employment opportunities are focused on policies to increase national output through capital accumulation (Hertati & Safkaur.2020). This model connects the rate of decline in employment with the growth rate of GNP, then the model suggests that with a decrease in GNP growth to maximize the decline in labor. The decline in economic growth rates occurred as a result of a combination of the reduction in the level of savings and the accumulation of physical capital which became its first impact on one side and the capital-output ratio on the other. Based on a certain capital-output ratio, the rate of decline in output growth and a decrease in employment can be maximized through the maximization of the level of savings and investment. The basic principle of this model is that producers are assumed to face two relative prices of the bansoso factor, which is the distribution of basic necessities due to the minus capital and labor. Producers must use a combination of capital because the level of labor is not available properly to minimize production costs to achieve maximum profit. The people are all unemployed and only staying at home are not able to produce output with a variety of production processes both capital intensive and labor intensive. If the capital price is higher, there is no community income, the producers will choose to have a house at home to avoid the corona outbreak so that it does not spread widely. Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 205 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 A two-sector model of labor reduction was developed by Boschma, (2006). Describing the economy consists of two sectors, namely: 1) the traditional sector; rural economic sector which is subsistence with labor which decreases due to the orona impact, resulting in mass disbursement. 2) urban industrial sector; is a modern sector with a high level of labor productivity and has become unemployed in both rural and urban subsistence Banks & Sharpe (2006). The decline in labor due to growth rates and decreased employment opportunities in the modern sector is due to an increase in corona outbreaks as a result of increased government social assistance and capital accumulation in the modern sector. Accumulation of government expenditure occurs because of environmental uncertainty that occurs throughout the world corona. Retrieved from (2011) explains that the decline in labor is related to the allocation of factors of production and factor flows between regions affected by Orona. Current flows of unemployment between regions occur because people are encouraged to stay at home due to corona outbreaks resulting in mass unemployment between regions. Increasing demand for output in the regions will change consumer tastes or increase demand for food. Watkins (1977) developed a geographical economic approach to explain the decline in labor through a corona- weakening process. The allocation of economic expenditure in a region will form a geographical concentration of locations and give birth to an economic agglomeration of government social assistance (Poruschi, 2020). With the formation of geographic concentration and economic agglomeration will have an impact on the efficiency of alleviating the burden of suffering people. To support the manufacturing sector or better known as the core-periphery model. The agricultural sector has a constant return due to global unemployment that does not produce homogeneous products in perfect competition conditions while the manufacturing sector with increasing returns does not produce diverse outputs in a corona-striking condition (Tonts, 2013). CONCLUSION Government budget due to covid-19 outbreaks both the central government in the region financed from state budget revenue due to declining economic growth has a negative effect on people's income locked up in a country means that government spending due to the covid-19 outbreak both central and regional rose sharply and the decline in economic growth has a role in raising the level of numbers poverty in a country. Whereas government expenditure due to regional covid-19 outbreaks financed from state cost income, investment and quality of human capital have a positive effect on regional community income, meaning that the aggravation of covid-19 outbreaks between regions will result in higher unemployment rates. Traditional free market model; neither producers nor consumers have the influence or power to influence the prices of inputs or outputs of production. The level of decline in labor rates (level of employment) and the level of wages (wages) is determined simultaneously by all prices of output and factors of production in an economy through the balance of the forces of demand and supply. Producers will reduce the labor rate as long as the marginal product value that will be produced by reducing one unit of labor exceeds the wage level. On the supply side, every individual will try to survive but work is not available, this is where government savings are spent to fund the community-affected groceries. Workers cannot work in time to work and free time based on marginal utility. Regional resources have only geographical advantages with low manufacturing potential and high agricultural conditions. The occurrence of the geographic concentration of the covid-19 outbreak by forming monopolistic competition so as to create a price index effect and home market effect, the nominal wage of labor declined and as a result a Decrease in Labor Levels in the Covid-19 Government Budget Hertati, Zarkasy, Adam, Umar, & Suharman 206 | Ilomata International Journal of Tax & Accounting Vol. 1 No. 4 October 2020 decline in the number of workers became unemployed in the city or region. 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