Saturday, May 1, 2021 | 07:28 WIB

JAKARTA, Public Relations—Fiscal stimulus is necessary to mitigate the extraordinary impacts of the COVID-19 pandemic. The most impacted are those in the lower class. They could only return to a somewhat normal economic condition after receiving direct cash assistance (BLT) from the government, which has helped them afford basic necessities. The BLT program has, therefore, succeeded in driving the purchasing power, said economist M. Chatib Basri when testifying for the Government at a judicial review hearing of Law No. 2 of 2020 on the government Regulation in Lieu of Law No. 1 of 2020 regarding the Stipulation of the State’s Financial Policy and Fiscal Stability for the Mitigation of the Coronavirus Disease 2019 (COVID-19) Pandemic on Thursday, April 29, 2021. This was the tenth hearing for seven cases: No. 37, 42, 43, 45, 47, 49, and 75/PUU-XVIII/2020.

Chatib discussed at length the extraordinary impacts of the COVID-19 pandemic, which prompted the government to take extraordinary measures. The government has urged that the people avoid crowds, practice social distancing, and reduce outdoors activities. This has led to a stop of economic activities for some period, which has led to economic collapse.

Economic actors in the informal sector have suffered a decrease in income of up to 30%. This led to the increase of unemployment and income gap. Chatib observed that Indonesia has proven to be relatively able to face the negative impacts of the pandemic on its economy, with 2.1% contraction in its economy.

“Compared to countries like the US, Singapore, and other rich countries, Indonesia is relatively secure, although it can’t be denied that Indonesia has not implemented a lockdown as most countries have so the [effects of the] pandemic have lasted [longer]. However, through this fiscal stimulus, the government is striving to minimize the impacts of the pandemic,” he said.

Fiscal Expansion

Next, Chatib discussed the sectors the government was targeting with the policies as outlined in the a quo law. Health fund, social assistance, and support for MSMEs are part of the government’s fiscal stimulus to overcome the adverse effects of the pandemic. He believes that if the government is not given room to exceed the 3% [state budget] deficit limit as stipulated in the a quo law, it will not be able to carry out fiscal stimulus for economic reversal in the third quarter. “So, in this emergency situation, the 3% deficit limit must be raised for these three needs,” he said.

Apart from the fiscal stimulus, Chatib believes that fiscal expansion is necessary—increasing the investment value of cash assistance to people with lower income to help increase their purchasing power. “So, the government needs to expand the BLT to the lower class by a larger number but still below the minimum wage,” he explained.

In addition, the government must prioritize free vaccine and PCR testing, which is still quite expensive. Only then, he added, can the government make broad economic improvements such as providing interest subsidies and others. 

Following Principles of Rule of Law

At the hearing, state administrative law expert W. Riawan Tjandra also provided his opinions on the president’s discretion in passing the perppu that was passed into Law No. 2 of 2020. He believes laws are formulated for normal conditions. However, there could be crises or emergency situations, which Indonesia has been facing in the past two years.

He believes, passing Law No. 2 of 2020 was the president’s attributive authority, as affirmed by the Constitutional Court Decision No. 138/PUU-VII/2009. Under these extraordinary circumstances amid the pandemic, he said, the government might not need the parliament in passing laws, as the situation called for an emergency law. The emergency situation allowed the government to exercise its discretion in making policies to fill the legal vacuum and overcome stagnation. Therefore, the passing of Law No. 2 of 2020 was for public interest, as reflected in its consideration.

“In other words, in drafting this law, the principles of good governance remained a consideration, such as the principles of wisdom, public interest, prudence, and arguments,” Riawan explained.

Determining State Budget

Riawan further said that Law No. 2 of 2020 has provided the government with the authority to implement state financial policies and determine the state budget (APBN) in accordance with the principles the rule of law. he also believes the government has acted according to the law because it has given the legal provisions to follow up on the deficit limit of above 3% until the economy improves. So, the basis for the government’s authority to change the state budget referred to the principles of the rule of law.

“This norm was born based on a legal product that is equivalent to the applicable regulations and the accountability is carried out according to statutory provisions. In an emergency, quick action is required, but it shall not abandon the principles of the rule of law,” explained Riawan virtually from his residence. 

Also read:

NGOs and Researchers Challenge COVID-19 Law

Petitioners of COVID-19 Law Reaffirm Arguments

Village Funds Delayed, Two Village Chiefs Challenge COVID-19 Law

Sri Mulyani: COVID-19 Law Protects the Public

House: Ratification of COVID-19 Law, Legal Basis of Financial Authority 

Expert: Budgeting during Emergency Must Be Transparent and Accountable

Abdul Chair Ramadhan: COVID-19 Law Violates Criminal Justice System

Witness: COVID-19 Referral Hospitals Lacking Facilities

Petitioner’s Expert: COVID-19 Law Violates Lawmaking Procedure

Said Didu: COVID-19 Law Disregard Rule of Compelling Crisis Situation

Maruarar Siahaan: Extraordinary Authority Must Be Temporary 

The petition No. 37/PUU-XVIII/2020 was filed by the Indonesian Foundation to Strengthen Civil Society's Participation, Partnership, and Initiatives (YAPPIKA); Desiana Samosir; Muhammad Maulana; and Syamsuddin Alimsyah. Their reasons for the formal judicial review petition are: first, the Regional Representatives Council (DPD) was not involved in the discussion to determine whether the COVID-19 Perppu was approved or not; second, the virtual House (DPR) meeting was likely not have been attended by MPs.

The Petitioners of case No. 42/PUU-XVIII/2020, Iwan Sumule and the other 49 Pro-Democracy (ProDem) activists, argue that if the COVID-19 Law and its appendix are enacted, there will be no more discussions on the revised state budget (APBN-P) between the Government and the House as the president can revise the details of the state budget and stipulate that revision unilaterally in a presidential regulation, while Article 23C of the 1945 Constitution mandates that all matters related to the state finances be regulated with a law, not a presidential regulation. 

The Petitioners of case No. 43/PUU-XVIII/2020, Ahmad Sabri Lubis and 9 other individuals, argued that Perppu No. 1 of 2020, which is stipulated in Law No. 2 of 2020, doesn’t regulate the “compelling crisis situation” clearly and rather focuses on the Government’s authority to set the state budget deficit beyond the 3% GDP limit until fiscal year 2023.

The Petitioner of case No. 45/PUU-XVIII/2020 Sururudin argues that Article 2 and Article 12 paragraph (2) of the COVID-19 Law gives the president a great power to manage state finances without involving the House from 2020 to 2023. It is contrary to the scope referred to in Chapter I Article 1 of the a quo law, which clearly regulates the state’s need of the 2020 budget to implement the administration. However, Article 2 paragraph (1) letter a gives the Government the authority to exclude the House in managing state finances until 2023.

The Petitioners of case No. 47/PUU-XVIII/2020, village heads and village consultative bodies members Triono and 26 others, understand that the funds might be delayed or redirected to other causes due to COVID-19, but stated that it would be problematic if village funds were to be declared null relating to state financial policies for COVID-19 mitigation and/or in order to face threats that endanger the national economy. They also believe that Article 28 paragraph (8) of the COVID-19 Law is not in accordance with Article 2 paragraph (1) letter l, which doesn’t specify that the pandemic will motivate the central government to eliminate village funds.

The Petitioner of case No. 49/PUU-XVIII/2020, advocate Damai Hari Lubis, challenges the provision on state budget in the a quo perppu, which has to refer to the principles stipulated in Article 23 paragraph (1) of the 1945 Constitution, especially on the transparency and accountability of the use of the state budget for the people’s welfare, which cannot be interpreted in exclusive conditions but in any condition. He believes the enactment of Article 27 paragraphs (1), (2), and (3) of the COVID-19 Law disregards any abuse by public officials in using the state budget for COVID-19 mitigation, which will lead to legal setbacks.

The petition No. 75/PUU-XVIII/2020 was filed by 47 petitioners, including M. Sirajuddin Syamsuddin, Sri Edi Swasono, and H. M. Amien Rais. They argue that the approval of Perppu No. 1 of 2020 into Law No. 2 of 2020 by the House were done in the same session as its stipulation when it was supposed to be in “the next sessions,” according to Article 249 of Regulation No. 1 of 2020 on the House’s Code of Conduct relating to session year and session period. The approval of the perppu violated Article 22 paragraph (2) of the 1945 Constitution. As the House had received the perppu in session III, it must be approved/rejected in session IV. In addition, Article 22D paragraph (2) of the 1945 Constitution stipulates that the Regional Representatives Council (DPD) should’ve participated in the discussion of Perppu No. 1 of 2020 as the norm concerns the central and regional budget. However, the House discussed the perppu without the DPD’s involvement. 

Writer        : Sri Pujianti
Editor        : Nur R.
PR            : Fitri Yuliana
Translator  : Yuniar Widiastuti (NL)

Translation uploaded on 5/3/2021 14:28 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian version, the Indonesian version will prevail.

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