Govt asks for speedy endorsement of social security draft law

A. Junaidi, The Jakarta Post, Jakarta

Regardless of opposition from different groups, the government expects the House of Representatives to endorse the social security bill before the current term ends in August.

The head of the government team assigned to draft the bill, Sulastomo, said the House was committed to the new social security bill.

"We hope the bill will be approved before August, during the House's final session. We have discussed it with the House," Sulastomo, the former director of state-run insurance firm PT Askes, told The Jakarta Post.

He said a new social security system was needed because the existing four state-run insurance firms -- PT Askes, PT Jamsostek, PT Asabri and PT Taspen -- could only cover about 15 percent of the country's population of 216 million.

If the bill is endorsed, the four companies will be merged into one nonprofit company within the next five to 10 years, he said.

"With the change of status into a nonprofit firm, the coverage will be extended," he said.

The bill, which has already been submitted to the House, was drafted by a team set up by then vice president Megawati Soekarnoputri's office in 2001, in compliance with the Constitution.

Sulastomo said the new social security system outlined in the bill was inspired by neighboring countries.

"Neighboring countries such as the Philippines, Vietnam, Thailand are better than us in offering social security coverage," Sulastomo said.

Many parties, including the Indonesian Employers Association, have criticized the bill for a lack of clarity as to who will finance the program and whether it will overlap with existing social insurance companies.

Businesspeople also fear the enforcement of the bill will increase the operational costs of their companies.

Hasbullah Thabrany, who was also part of the team that drafted the bill, dismissed employers' fears the new system would prove to be a financial burden, requiring them to pay higher insurance premiums for workers.

"Employers will have to pay as much as they are now spending on their employees' insurance premiums. The insurance for the poor will be subsidized by the government," Thabrany said.

He said that with current capital amounting to over Rp 30 trillion (US$357,000), the social security system could help the poor, who account for 20 percent of the total population.

However, passage of the bill still appears to be some way off given the opposition in some parts of the House.

"Too many things in the bill are unclear. We don't think we can discuss it soon," said the deputy chairman of House of Representatives Commission VII, A. Sanoesi Tambunan.

The contentious issues include the scheme's coverage and administration.