Wednesday, July 24, 2024 | 01:04 WIB

Tapera-The Public Housing Savings Fund Fiasco Despite its noble intentions of aiding low-income families, the funds program has been marred by miscalculations, leaving many questioning its efficacy and integrity


Jakarta, IO – The Government’s plan to roll out a mandatory Public Housing Savings Fund (Tapera), which has now expanded to include all employees of state-owned enterprises and private companies, as well as independent workers (freelancers), has caused a stir among the public, prompting a backlash in some quarters, especially among workers, trade unions and employers. Previously, only civil servants, police and armed forces personnel were required to participate. 

According to Government Regulation 21/2024, which amended Government Regulation 25/2020 concerning Public Housing Savings, the Government will deduct 3 percent from workers’ monthly income for Tapera, with employers covering 0.5 percent and employees paying the rest, except for freelancers, who will have to pay the full sum. Anyone who earns a minimum wage, including foreign workers, are legally required to enroll in the scheme. Employers are obliged to register their workers with BP Tapera, the agency responsible for managing the fund, by 2027. 

Among the points of controversy is that while Tapera requires the participation of all employees, not all participants can get home financing. Generally, potential beneficiaries are defined as low-income workers who make a maximum monthly income of Rp8 million, have yet to own their own homes, and have participated for at least one year. However, there are a slew of restrictive criteria before the financing can be approved, subject to length of participation, ability to make regular payment of contribution, urgency of home ownership, and availability of funds. 

Meanwhile, those who are not classified as low-income groups will be excluded as beneficiaries. They are simply “savers” who can expect to withdraw their savings with interest upon retirement or if they are unemployed for five consecutive years. If they die, the funds can be passed to their heirs. The principle of gotong royong (mutual cooperation) is the central tenet that underlies Tapera’s establishment. In other words, it is a noble effort in which those who are better off helps the less privileged to have decent homes of their own, regardless of whether or not the former already have had their own homes. 

However, if we look more closely, the spirit of Law 4/2016 is not just about mutual cooperation, but also refers to affordability, accessibility and social justice. This means that the benefits of the program must be enjoyed proportionally by all its participants. 

The strict restrictions on eligibility criteria are actually unfair to the non-low-income participants. There is a likelihood that a low-income participant already owns a house, while a non-low-income one does not. In other words, the latter’s need for housing is denied, just because they make a little above the designated income line. 

Moreover, not all of the funds will be used for home financing. A portion will have to be returned to the non-eligible savers as their retirement funds. BP Tapera will also collaborate with investment and wealth management companies to manage the fund, the return from which will be subject to the performance of the wider economy and the capital markets. 

As a result of rising controversies, vigorous public debate is inevitable, because the policy is seen as one-sided, not to mention a quite significant cut to personal income amid eroded purchasing power due to inflation, which outpaces wage/salary increases. There is also the matter of public distrust in the way the Government manages enormous public funds, especially in light of two of the largest corruption cases in the country’s history that took place in the last couple of years, one involving state-owned life insurance company PT Asuransi Jiwasraya and the other PT Asabri, a state-owned insurance and pension fund for the military, police and Defense Ministry employees. The lack of transparency, accountability and law enforcement exposed in the two cases has further eroded public faith in the central Government.

A noble intention 

Tapera is established with a noble intention, namely, to provide decent housing to low-income workers. In addition, it is expected to be able to tackle the massive backlog of housing and increase the supply of subsidized housing, and thus promote economic equity through home ownership. The backlog is the gap between the number of houses built and the number of houses needed by the community, a calculation based on the need of one household for one housing unit. 

According to data from the Public Works and Housing (PUPR) Ministry, the backlog of home ownership in 2023 reached 9.9 million units, down from 10.51 million units the previous year. This predominantly occurred among groups with irregular incomes, including micro, small and mid-sized enterprises (MSME), informal workers and contract workers. Tapera will allow these groups to apply for the low-interest mortgages they need, amid state budget limitations, to provide subsidized housing. 


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