Indonesia doubles wage subsidies, cancels electricity discount in stimulus shake-up
JAKARTA: In last-minute changes to a planned consumer stimulus package for June and July, the Indonesian government has cancelled an electricity discount but doubled wage subsidies.
Finance Minister Sri Mulyani Indrawati (pic) revealed in a press conference on Monday (June 2) that the wage subsidies for low-income earners would double from Rp 150,000 (US$9) per month per individual to Rp 300,000.
Eligible beneciaries include around 17.3 million workers earning up to Rp 3.5 million a month and some 565,000 'honorary teachers', a term commonly used for honorarium-based contract teachers.
Sri Mulyani explained that the subsidies would ultimately be financed by BPJS Ketenagakerjaan but that the government would set aside Rp 10.72 trillion from the state coffers to 'temporarily' fund the programme.
The wage subsidies are a part of a series of measures aimed at boosting consumer spending.
When it was first announced last month, the package was to cover six areas, one being transportation discounts for trains, airplanes and ships, another area included discounts on road tolls for some 110 million eligible drivers.
Two more areas were social aid for 18.3 million beneciaries and a discount on work accident insurance for employees in labour-intensive industries.
When it was first announced last month, the package was to cover six areas, one being transportation discounts for trains, airplanes and ships, another area included discounts on road tolls for some 110 million eligible drivers.
Two more areas were social aid for 18.3 million beneciaries and a discount on work accident insurance for employees in labour-intensive industries.
The package originally also included a 50 per cent electricity discount for June and July, similar to what the government had granted in January and February.
However, following a meeting at the State Palace and prior to June 2's press conference, Sri Mulyani announced that the discount was not doable.
'We have held a meeting with other ministers, and, for the implementation of the electricity discount, the budgeting process turned out to be a lot slower, so if we wanted it for June and July, we have determined that it could not be executed,' said Sri Mulyani.
She explained the decision to double wage subsidies with the cancelled electricity discount.
The Energy and Mineral Resources Ministry issued a press statement on June 2 saying it had not been involved in the formulation of the stimulus initiative helmed by Coordinating Economic Minister Airlangga Hartarto.
'(The ministry) was never part of a team or any forum that talked about the electricity discount for June and July 2025,' said the ministry's spokesperson Dwi Anggia in the statement.
Earlier, Energy and Mineral Resources Minister Bahlil Lahadalia said he was unaware of the initiative just days ahead of the implementation.
'I don't know whether there's already (a discussion) on the technical (level) or not; I don't know yet. One thing is for sure, I still haven't received the report until today,' Bahlil said on May 26, or 10 days before the policy's planned implementation.
Such a policy should require 'communication' with the energy ministry and the Finance Ministry, Bahlil said, adding that he could only formally instruct state-owned electricity company PLN to execute it after that.
Bahlil proceeded to verify the planned policy with PLN president director Darmawan Prasodjo, who happened to stand next to the minister.
'I'm sure PLN still hasn't received (any instruction). Have you received any letters from the energy ministry? You haven't, have you? Because, as far as I'm concerned, I must sign the letters and I haven't done that,' Bahlil said to Darmawan.
'Not yet,' the PLN director briey replied.
In total, the consumer spending stimulus required some Rp 24.4 trillion, according to figures presented by Sri Mulyani. - The Jakarta Post/ANN
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