Legal counsel Muhammad Raziv Barokah conveying the petition revisions at a judicial review hearing of the Tapera Law, Monday (10/14/2024). Photo by MKRI/Panji.
JAKARTA (MKRI) — As Petitioners of case No. 134/PUU-XXII/2024, the Federation of National Worker Unions (FKSPN), Federation of Energy Chemical and Mining Worker Union-Confederation of Indonesian Worker Unions (FSP KEP KSPSI), and the Federation of Tourism and Creative Economy Workers Union-Confederation of Indonesian Worker Unions have revised the petition of Law No. 4 of 2016 on Public Housing Savings (Tapera Law). In the petition, they stated that the academic paper of the Tapera Bill shows that the legislatures intended to adapt mandatory savings applying in five other countries—France, Germany, China, Singapore, and Malaysia.
They revealed that only China mandated housing savings. However, this program fell through. “In fact, out of the five countries, only China applies mandatory, binding housing savings, which failed,” said legal counsel Muhammad Raziv Barokah at the petition revision hearing on Monday, October 14, 2024.
The Petitioners explained that China started its housing financing system in 1991 by implementing the housing provident fund (HPF). In summary, housing savings in China starts with a worker participating in the HPF, which will buy a house and then connects with the HPF management institution and commercial banks that will finance the purchase. The HPF will then disburse funds for house payments to developers.
HPF savings in China are mandatory for all formal sector workers (civil servants, employees of state-owned enterprises, foreign-invested enterprises, and private enterprises). Both workers and employers contribute 5 percent of the worker’s salary and income.
Meanwhile, Raziv said, housing savings in France and Germany place is optional. Meanwhile, Singapore and Malaysia do not recognize public housing savings, but apply mandatory social security contributions that can also be used for housing needs.
The Indonesian government might be intending to apply the Chinese housing savings mechanism, as it specifically regulates housing financing, mandatory participation by all workers, and employer contributions. In contrast, in other countries housing savings are not compulsory, or when it is, it is a part of other social security.
“That legislatures’ consideration to follow the Chinese is also unsuitable, because the program failed in China. This failure occurred because new problems arose, including inequality in the use of the HPF program between low-income and higher-income workers, misuse of savings funds, as well as insufficient HPF funding that had to be combined with other funding or programs,” Raziv said.
The Petitioners only challenge two articles out of the initial three, i.e. Article 7 paragraph (1) and Article 9 paragraph (1). They argue that the articles are in violation of Article 23A, Article 28D paragraph (1), and Article 28H paragraph (1) of the 1945 Constitution.
Also read: Labor Unions Question the Obligation of Workers to Become Tapera Participants
As labor unions representing millions of workers, the Petitioners believe that the Government’s policy requiring all worker who earn at least minimum wage to become a member of Tapera unconstitutional. They argue the provision is mandatory or coercive as if it were a tax, while it is not supposed to be a coercive levy for low-income workers (MBR) and non-MBR.
Article 7 paragraph (1) of the Tapera Law reads, “Every employee and self-employed person who earns at least the minimum wage shall be obliged to become a participant.” Then Article 9 paragraph (1) reads, “Employee as referred to in Article 7 paragraph (1) must be registered by the Employer.”
As low-income workers with limited purchasing power, the Petitioners need government support to obtain housing (Article 1 point 24 of Law No. 1 of 2011 on Housing and Settlement Areas), of course a 3 percent wage cut will further burden their lives in the midst of a modest increase in the Regional Minimum Wage (UMR). In addition to the Tapera deduction, in fact, they have been imposed a lot of deductions from other social security programs, thus making their lives even more depressed, especially due to rising inflation.
Non-MBRs who are financially secure and may already have at least one residential unit, their main concern is the benefits of the Tapera program. They have doubts over the use of their monthly cuts, which they can only liquidate after entering retirement age. They believe the title of “noble savers” would unlikely provide them with any real benefits.
Similarly, the 0.5 percent deposit for the Tapera program would give employers additional burden, thus disrupting their business productivity.
On the other hand, income earners in Indonesia, especially those with low income, are subjected to quite a lot of mandatory cuts. These cuts include BPJS Kesehatan (healthcare social security), BPJS Keternagakerjaan (employment social security), and income tax (PPh). The Petitioners estimated that around 8.7 percent of a worker’s monthly salary goes toward contributions for BPJS Kesehatan, BPJS Ketenagakerjaan, and PPh21.
Author : Mimi Kartika
Editor : N. Rosi
PR : Fauzan F.
Translator : Yuniar Widiastuti (NL)
Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.
Monday, October 14, 2024 | 16:35 WIB 90