Indonesia to provide more targeted wage subsidy scheme

The Manpower Ministry is preparing a more accurate, targeted scheme for the wage subsidy programme (BSU) for low-income formal workers.
By: | May 6, 2022

The scheme aims to help such workers from rising inflation, with the beneficiaries being those who receive monthly wages of less than Rp3.5 million (US$245) and are already registered with the Workers Social Security Agency (BPJS Ketenagakerjaan).

“The government really understands the situation of workers,” Manpower Minister Ida Fauziyah said during a May Day event in Surabaya, East Java.

“We are currently preparing the 2022 BSU instrument. We want to ensure that the wage subsidy programme is implemented in a precise, accurate and accountable manner.”

For this year, the government prepared Rp8.8 trillion (US$616 million) for a potential 8.8 million BSU recipients, whereby each would receive Rp1 million (US$70). This year’s budget allocation is the same as the one implemented in the previous year.

Ida said the government is open to the possibility of increasing the budget as the number of eligible recipients is likely to rise after the BPJS Ketenagakerjaan saw an increase in new participants.

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The wage subsidy aims to mitigate the effects from the drastic spike in global commodity prices due to inflation caused by the war between Russia and Ukraine. Inflation in the country rose to a nearly two-year high of 2.64% in March due to the spike, according to The Jakarta Post.