Wage Subsidy of IDR 300,000 Deemed Insufficient to Boost Purchasing Power, Says APINDO Yogyakarta: But Appreciation Remains
Wednesday, 11 June 2025
YOGYAKARTA – The Yogyakarta Chapter of the Indonesian Employers’ Association (APINDO DIY) has expressed appreciation for the government's Wage Subsidy Assistance (Bantuan Subsidi Upah or BSU) program targeting workers earning below IDR 3.5 million per month. The program provides a total of IDR 600,000 in two disbursements of IDR 300,000 each in June and July 2025, benefiting approximately 17.3 million workers across the country.
However, APINDO DIY Vice Chair for Employment Affairs, Timotius Apriyanto, remarked that the financial assistance is unlikely to significantly improve purchasing power. “The timeframe is too short, and the eligibility threshold too low. Many affected workers, especially in Greater Jakarta, earn between IDR 3.5 to 5 million and are excluded from the scheme,” he said on Wednesday (June 11, 2025).
Apriyanto noted that the IDR 300,000 subsidy is too small to generate meaningful economic stimulus and will likely be spent entirely on short-term consumption. “Nonetheless, we appreciate the government's initiative it is still a form of policy incentive aimed at supporting consumer purchasing power,” he added.
He suggested that the program should mirror the COVID-19-era wage subsidies, which targeted workers earning up to IDR 5 million and provided IDR 600,000 monthly payments over a longer period ideally six months or until the end of 2025, rather than just two months.
Recognizing the government's fiscal constraints, Apriyanto proposed a budget refocusing strategy. For example, reallocating funds from the free nutritious meal program to support wage subsidies. “We need to assess which has a greater economic impact—free meals or wage subsidies especially when it comes to rescuing the national economy,” he said.
“This shouldn't be treated as a fixed-price policy; it must be dynamic and flexible, responsive to evolving socio-economic conditions. A two-month program won’t create any significant change,” Apriyanto emphasized.
He also pointed out that Presidential Instruction No. 1 of 2025 on government efficiency should not result in blanket restrictions on all community-related programs, particularly those supporting industries like tourism.
Apriyanto praised the recent relaxation in government policy, particularly efforts to revive the Meeting, Incentive, Convention, and Exhibition (MICE) sector, which he said plays a crucial role in economic stimulation through government spending.
“The government should consider forming an Economic Resilience Task Force to comprehensively assess the impact of global uncertainty on the Indonesian economy,” he suggested.
Meanwhile, Purnawan Hardiyanto, Chair of the Center for Economic and Business Studies at the Faculty of Business, Duta Wacana Christian University (UKDW), supported the BSU program’s goal to maintain the purchasing power of low-income earners amid economic slowdown.
He compared the BSU to previous direct cash assistance (BLT) programs implemented during the administrations of Presidents Susilo Bambang Yudhoyono and Joko Widodo. These programs were aimed at cushioning the lower-income population from economic shocks.
“The subsidy is intended to keep household spending steady and thus help sustain economic growth,” said Purnawan. “IDR 300,000 per month is insufficient in my view, but given the government's current fiscal limitations, the economic impact will understandably be limited.”
Source: jogjapolitan.harianjogja.com
