The government launched a salary subsidy support program of Rp. Six hundred thousand for four months totaling Rp. 2.4 million. They will supply these subsidies to private workers and non-PNS government employees with an income of below IDR 5 million and registered with BPJS Ketenagakerjaan.
Prof. Wahyudi Kumorotomo, Ph.D., as a UGM Public Policy Expert, said that the government’s launch of the salary subsidy support program was considered an urgent step taken to prevent Indonesia’s economy from entering into a deeper recession. This salary subsidy policy aims to preserve the most vulnerable groups of workers while simultaneously raising domestic demand to increase supply and revive the Indonesian economy.
Nevertheless, there is still a tendency that as many as the Rp600,000 BLT system side with workers in the formal sector. Meanwhile, the reach of the program has not covered the workers in the informal sector. In fact, most of Indonesia’s workforce, namely 57.27 percent or 74 million people, are informal workers.
Those are informal workers who have no contractual ties, are not included in the BPJS Ketenagakerjaan program, and do not receive any company guarantee. Meanwhile, the prolonged Covid-19 outbreak has resulted in many informal workers whose income has declined,” he explained on Friday (4/9).
Therefore, he asked the government to improve concern and find a solution to subsidize workers’ support in the informal sector. The government is also necessary to develop alternative programs such as labor-intensive systems, social safety net programs, or other forms of assistance that can cover informal workers in order to protect this economically vulnerable group of informal workers,
“It is necessary for the government to find alternative programs for informal workers. This condition is because Indonesia’s success in avoiding the economic recession gap also depends much on the government’s attention to informal sector workers, the urban poor, and other vulnerable groups,” he added.
In his remarks, Wahyudi also added that this salary subsidy support program’s success is also largely determined by the effectiveness of the planned allocation of funds for around 13.8 million workers. If the distribution is not on target, the portion of these funds will only extend the income gap between the rich and the poor. Accordingly, efforts to boost the national economy could fail.
The professor of the UGM Department of Public Policy Management added that the allocation of this salary subsidy support is also predisposed to misuse. Therefore, coordination and cooperation between related Ministries / Institutions and implementers must be well prepared. Reflecting on Bansos fund allocation distribution experience, there are still many wrong targets, and there are illegal deductions at the operational level.
“Operational coordination must be more orderly so that the program can be right on target. Despite those things, the implementer must carefully check the requirements that must be met by BLT recipients so that there is no duplication of funding recipients,” he said.
Wahyudi reiterated that the government should be selective and careful in distributing support because it is inclined to misuse it by employers who deliberately cut workers’ salaries or aid recipients asking for a lower salary receipt than to get a salary subsidy. To prevent possible irregularities, it requires tight coordination and supervision of the Ministry of Finance, Ministry of Social Affairs, and the Ministry of Manpower. Legal proof regarding the adequate amount of wages received by a laid-off worker has lessened his work volume due to downsizing or layoffs accompanied by rigorous data verification.
“Do not let the government’s efforts to prevent a recession fail because this program is less effective, while the consequences for the shortfall in the APBN will unfold,” he explained.
He conveyed that the government needs to distribute this salary subsidy to sectors most affected by the Covid-19 outbreak. Some of them include the tourism, transportation, and manufacturing sectors.
“The government should have made the target figure of 13.8 million workers by estimating the groups of workers exposed to a deterioration in income in these sectors,” he said.
Translator: Natasa A