The government and state-owned labor insurance firm, PT Jamsostek, have agreed to revise the 2005 regulation on the company's investments to allow it to develop more low-cost housing for workers in industrial zones and urban areas.
Manpower and Transmigration Minister Erman Suparno said the review of the regulation is necessary and in line with the government's commitment to focus on improving the welfare of workers.
"Under the current regulation and the poor remuneration system, it is almost impossible for low-paid workers and their families to possess simple and cheap houses. With the review, Jamsostek will be encouraged to invest a bigger part of its assets to finance the construction of infrastructure, including affordable houses and flats," he was quoted as saying by The Jakarta Post on Tuesday (5/12/06).
Jamsostek president director, Iwan Pontjowinoto, hailed the government's initiative to review the government regulation. "Jamsostek will seek cooperation with local administrations and housing developers to carry out the cheap housing program."
Suparno and Pontjowinoto said that if Jamsostek changes from a limited company into a non-profit institution, it would no longer be obliged to pay annual dividends to the government and would be able to allocate a greater part of its profits to providing social facilities and building affordable housing. Jamsostek currently channels 35% of its annual profits in dividends to the government, its main shareholder.
Jamsostek reported a 73% increase year-on-year in net profit to Rp738 billion ($82 million) in the first nine months of the year, Antara reported on Tuesday.
Pontjowinoto attributed the increase in net profit to a 106% rise in net income to Rp4.5 trillion in the January to September period. He said its operating cost also rose to Rp580 billion from Rp433 billion.
Investment director, Iskandar Rangkuti, said the company's investment has reached Rp45 trillion, exceeding its target of Rp40 trillion set by the end of 2006.
He said 47% of the investment is in deposits, 36% in bonds, 12% in shares and 3% in mutual funds.