Labor Union Sides with Govt on Housing Savings

The Confederation of Indonesian Workers Unions (KSPI) has reinstated its support for the newly passed public housing savings (Tapera) program, pinning its hopes on the new system to help the country’s workers afford housing.

“We regret the Indonesian Employers Association [Apindo] stance that opposes the facility to purchase housing through Tapera. Housing is a primary need that is becoming a luxury for workers now,” KSPI chairman Said Iqbal said on Friday.

He referred to Apindo’s public rejection of the program on fears of additional employment burdens, which have reached more than 30 percent of wages, according to the association. 

The union holds the view that the funding program would be able to gather Rp 2.7 trillion (US$201.8 million) monthly from around 44.4 million formal workers in the country, equal to around Rp 32.4 trillion yearly.

With the expected funds, the union has suggested that the government tackle at least 10 percent of the housing backlog among the country’s workers each year from the beginning of the Tapera program, aiming to fulfill the need for housing in 10 years.

However, Said asked the government to make the percentage of monthly wages set aside for the fund — which remains undecided — proportionate between employees and employers, with 1.5 percent each.

The figure was different to an initial cut stipulated in the bill, which was then removed to be stipulated in an upcoming government regulation, at 2.5 percent of monthly wages from workers and 0.5 percent from employers.

The government, along with the House of Representatives, on Wednesday deliberated the Tapera bill becoming law, pending approval from President Joko “Jokowi” Widodo.

The law aimed to gather the financing needed to provide housing for low-income people nationwide, with a backlog of around 15 million currently, according to the ministry’s data. 

Formal workers and individuals with salaries above the minimum wage are obligated to join the program, while workers with salaries below the minimum wage and informal workers can join voluntarily.

The program is expected to gather Rp 50 trillion to Rp 60 trillion in the first five years and will be merged with the ministry’s housing loan liquidity facility (FLPP), which could add Rp 33.3 trillion.

However, with the current system, Apindo remained skeptical about the role of the program in providing housing for workers, as currently only certain workers are prioritized for financing through the housing program and there is a lengthy wait to gather sufficient funds.

Those eligible to apply for the housing support have to qualify as low-income people, who do not possess a home have held membership for a minimum 12 months.

“The people who will get it are not guaranteed to be those who pay; they will not know for whom the money is used. Nobody knows,” Apindo vice chairman Suryadi Sasmita said on a separate occasion, adding that workers who already had homes would also be burdened by the cut. 

Apindo remained firm in its stance to file a judicial review with the Constitutional Court, with the initial goal of pushing the government to amend the law. They also demanded a single pool of housing funding instead of several programs that overlapped, as is the case with the Workers Social Security Agency (BPJS Ketenagakerjaan), which gathered an estimated Rp 36 trillion from its pension fund (JHT) for housing.

The Public Works and Public Housing Ministry’s director general for housing finance, Maurin Sitorus, defended the government’s system of gathering funds for low-income people from workers, saying the government lacked funds for housing finance.

“For the Rp 30 trillion belonging to the BPJS, if the housing cost is Rp 500 million, it can only finance 60,000 houses,” he said.

Source:, 27/02/16
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