KEEPING SOCIAL AID DISBURSEMENT ON TARGET Reaching the Poor and Vulnerable

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Timboel Siregar, SSi, SH, MM i
Timboel Siregar, SSi, SH, MM is an observer of social security systems. He graduated from the Bogor Institute of Agriculture (IPB) in 1994, majoring in Statistics. Later, he furthered his study in Human Resource Economics at Trisakti University, Jakarta. He has been active in BPJS Watch since 2010, also as Secretary General of Indonesian Workers Organization (OPSI) since then. He is currently serving as a national trainer for industrial relations with the Ministry of Manpower. He is a prolific opinion writer/ contributor to many national media and is often invited as a lecturer on campuses.

This means that there is an excess of around 1.4 million workers. To minimize feelings of jealousy, and ensure that more workers will receive the BSU, the Ministry of Manpower should open up registration for workers outside of those registered with BPJS Ketenagakerjaan, because the fuel price hike will impact all workers, regardless of their employment status. As a consequence, the government must also provide an additional BSU budget allowance in 2022. 

This can also be a prime opportunity for BPJS Ketenagakerjaan to increase worker participation, through supervision and enforcement. 

Third, the increase in fuel prices will drive inflation even higher, the impact of which will last into 2023. As the calculation of a minimum wage increase in 2023 will still be based on Article 26 of Government Regulation (PP) 36/2021, as stated by the Manpower Minister during a working meeting with the House Committee IX a few days ago, the minimum wage increase in 2023 will still be around 1 percent, more or less the same as the 2022 rate. 

Thus, workers’ purchasing power is bound to take a hit again next year, against the 3.3 percent inflation rate assumption set by the government for 2023 (which could be higher in reality). 

To date, the government has no intention to renegotiate the Job Creation Law and its implementing regulations such as PP 36/2021 sooner than the determination of 2023 minimum wage, whereas the Constitutional Court’s (MK) ruling clearly ordered the Government to review controversial articles in the Job Creation Law and regulations on its implementation with the public, especially with labor unions. 

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Ideally, the Ministry of Manpower will follow advice from the Indonesian Chamber of Commerce and Industry (Kadin), along with labor unions, to conduct a market survey of 64 items included in the official decent living standards (KHL) as the key indicator in determining a 2023 minimum wage. 

The author believes that determining the minimum wage increase in 2023, based on a market survey, is more objective than using Article 26 of PP 36. This will ensure that workers’ purchasing power is not eroded by high inflation. Maintained purchasing power will certainly benefit the economy, as household consumption remains the primary engine of Indonesia’s economic growth. 

The social assistance program will certainly help the community, but considering that the impact can potentially extend into 2023, the Government should continue allocating a social assistance budget for next year while upgrading its database, by drawing lessons from the distribution of social assistance in 2022. (Timboel Siregar)