JAKARTA, May 31 (Xinhua) -- The Indonesian government recently issued a regulation on a public housing savings scheme in a bid to accelerate its program to build 1 million houses a year across the world's fourth-most-populous country.
The regulation was signed by the country's president Joko Widodo on Monday last week, providing further instruction for the fund management agency in collecting and arranging money for public housing intended for civil servants, military and police personnel, and employees of state-owned and private enterprises.
Known locally as Tapera, the policy requires participants to set aside 3 percent of their monthly income. The employee bears 2.5 percent, while the employer 0.5 percent.
The policy applies to formal workers and individuals with monthly salaries equal to or exceeding the regional minimum wage, and those who already own a house. The regulation also obliges freelancers and those foreigners who have been living and working in Indonesia for more than six months to become participants.
The program was established and introduced in 2016. It has been implemented since 2020 after the issuance of a government regulation signed by Widodo in May that year. However, an absence of particular implementing rules at the ministerial level had caused the housing program to be temporarily inoperative.
The regulation on public housing schemes issued in May is a revised version of the 2020 regulation. Participants are enabled to use their down payments to buy a house, build a new one or renovate their existing home. Their savings can only be withdrawn for other uses after participants reach the age of 58 years. All employers are obliged to register their employees for the program no later than 2027.
However, the regulation has brought an uproar for some employers and employees. Indonesian Employers Association Chairwoman Shinta Kamdani said that the additional collection for the public housing scheme will add more burden for both employers and employees as at least 18 percent of each worker's monthly income is currently collected for benefit plans, such as retirement savings and health and social security.
"If there are more collections, the burden will be even heavier," she said on Friday, suggesting the government optimize the current retirement savings program instead of establishing new programs.
Likewise, Chairman of the Confederation of Indonesian Trade Unions (KSPI) Said Iqbal said on Wednesday that housing would remain unaffordable for employees despite down payments in the government's public housing schemes.
The KSPI, he said, supported the social housing programs, but it refused the implementation of the Tapera program at this time because it would cause a burden on the economic conditions of the public.
The Ministry for Public Works and Housing argued that the program is aimed at helping low-income communities and underprivileged people to have livable houses.
Employees or underprivileged residents were still finding it difficult to buy or pay in installments to own a house at current prices, said the ministry's secretary general Mohammad Zainal Fatah on Friday.
They were also uneasy about getting a loan from banks because the interest is too expensive, he added.
"We only ask to hold the funds to be used as low-cost funds that can be accessed by low-income and underprivileged communities," Fatah said.
When a participant enters retirement and wants to withdraw the money, the participant can take it because it is a savings account, he stressed. ■