Indonesian workers, businesses slam new ‘burdensome’ public housing savings scheme
- Workers must pay 3 per cent of their monthly income towards Tapera, and can withdraw the amount when they turn 58 or upon death or retirement
- Critics say rising inflation and low wages have affected workers’ purchasing power, call for participation in Tapera to be made voluntary
The Indonesian government’s plan to make mandatory deductions from all employees’ salaries for a national housing scheme has drawn anger from workers and businesses alike, with critics fearing the scheme will be used to fund outgoing President Joko Widodo’s ambitious infrastructure projects.
On May 20, Widodo signed the revised Government Regulation on the Housing Savings Fund, or Tapera, which now includes all employees of state-owned enterprises and private companies, as well as freelancers. Previously, only civil servants, police, and armed forces personnel were required to participate.
When the regulation kicks in on June 10, the government will dock 3 per cent from workers’ monthly income for Tapera, with employers covering 0.5 per cent and employees paying the rest. Freelancers and independent workers such as farmers, artists, traders and drivers for ride-hailing apps will have to cover the 3 per cent contribution themselves, based on their reported income.
Deposits, plus interest, can be withdrawn by workers after their Tapera membership ends due to death, retirement, or when they have reached the age of 58. Businesses and companies have been given until 2027 to enrol their employees in the scheme.
Penalties for not joining the programme include fines, publication of non-compliance, and revoking of business licence.
The new pay cuts have stoked anger and confusion among workers, particularly labourers who have been struggling to cover daily expenses due to low wages and the high rate of inflation, according to Mirah Sumirat, chair of the central leadership council at the Indonesian Trade Union Association.