Delay sought for social security bill

Delay sought for social security bill

Ridwan Max Sijabat, Jakarta

The Indonesian Employers Association (Apindo) and an alliance of
labor unions called on the government and the House of
Representatives to suspend the ongoing deliberation of the
controversial bill on the national social security system, saying
that it would be better to revise Law No. 3/1992 on social
security programs in an effort to improve workers' benefits.

Haryanto M.S. -- who chairs the Forum for National Bipartite
Consultation and Communications (FKKBN), which is fully backed by
Apindo and 63 labor unions -- said, here on Friday, that Apindo
and labor unions had agreed to reject the controversial bill, and
mobilize workers to turn to the streets if the bill was endorsed
in the coming months.

"We could not accept the bill because, if the national
security system were to be implemented, its substance would
jeopardize both employers and workers.

"Besides, contrary to the amended 1945 Constitution, only the
people -- namely workers and employees -- would enroll in the
national program. According to the principles of such programs,
the government, representing the state, should play a leading
role by contributing as a main stakeholder. But, in reality, the
government has not made any contribution to the existing social
security programs, and the bill does not require the government
to do so," he said.

Both Apindo and labor unions in their capacity as
stakeholders in the existing programs have not been involved in
preparing the bill.

The existing social security programs are: For workers
(Jamsostek), for civil servants (Askes and Taspen) and for
servicemen (Asabri). They are all run by the government, but the
latter does not have a stake in the programs.

The bill stipulates that all workers and their employers are
required to enroll in the national program. Members of existing
programs would gradually join the national program, while the
unemployed and low-income workers would be named as beneficiaries
of the program, and their premiums paid by the government through
the annual state budget.

It also regulates that all state-owned companies running
existing social security programs would merge in phases, and
members would join the national program.

Apindo's secretary-general Djimanto, said employers would not
pay premiums for the unemployed and low-income people as that was
not the employers' responsibility, but the government's.

"Based on the bill, in the next 25 years, 25 percent of
employer's total costs would be labor costs, which would
overburden them. Besides which, the government must be honest as
to whether it would be able to subsidize the unemployed amid
economic hardships -- and this new system would discourage
foreign investors," he said.

Alex Arifianto, a researcher at the SMERU institute in
Jakarta, concurred, saying that the national social security
program would likely make the investment climate in the country
less competitive. He said employers would also reduce to a
minimum the number of their employees, and even dismiss workers
to reduce labor costs.

Alex warned that the aging population would increase to 30
percent of the total population in 2050, from 10 percent in 2000.
As a result, he said, the government would face serious financial
problems in the next 30 years if it had to give retiring workers
a payout. "So, the proposed system is not financially
sustainable," he said, adding that Indonesia should learn from
the experiences of developed countries, such as Germany, France
and Austria in designing its social security program.