The government looks set to implement its 2004 National Social Security System (SJSN) Law, which will provide social security to all people including workers, civil servants and servicemen. Workers in the formal sector, civil servants and servicemen already enjoy social security programs with their own insurance companies, including state-owned PT Jamsostek, PT Askes and PT Asabri. Hotbonar Sinaga, president of Jamsostek and member of the executive body of Switzerland-based International Social Security Association (ISSA) shared his views on the planned implementation of the national social security system to The Jakarta Post’s Ridwan Max Sijabat on Friday.
Question: What is the importance and urgency of implementing the SJSN at present?
Answer: The SJSN is a national social security system that will cover healthcare, occupational accidents, death and pension benefits the government will permanently provide for all people in phases starting this year. The government and the House of Representatives are still deliberating several draft bills to enforce the umbrella law. It has given top priority to making the long-awaited draft bill on healthcare program with marginal groups, such as the unemployed and the elderly, as its urgent target recipients.
The government is also drawing up a regulation on premium subsidy recipients because it will cover the payroll of the marginal groups through the state budget. Those marginal groups include the unemployed, the elderly and the handicapped in urban and rural areas nationwide.
Through the SJSN program the government will mobilize a huge amount of funds that will be used to finance infrastructure development and control inflation because a part of the mobilized funds will reduce the amount of spreading money.
Yes, but the initial targets are those who are financially capable, namely civil servants, servicemen and workers in the formal sector who have enjoyed the social security programs for many years with
different providers. All existing social security programs, including those for marginal groups, will be gradually integrated into the national system within 25 years at the most.
Of the highest importance is that all participants will play their role no matter their financial situation because the social security system adopts the contributory principle. Of the five programs, the government will give top priority to most-needed and costliest healthcare.
If the SJSN is implemented, how much does the government have to allocate and spend out of the state budget to cover the healthcare program for the marginal groups?
The National Social Security Executive Board (DJSN) is still calculating the figure. Despite the number of jobless, elderly and handicapped exceeding ten million, the government will gradually generate the financial capacity to cover everyone.
What will the national social security programs look like?
As the main shareholder, the government will not receive dividends from all state-owned companies PT Askes, PT Taspen, PT Asabri and PT Jamsostek running the social security programs. Despite their limited status, the four companies are running the programs on behalf of the government’s obligation to protect the people. The four should not be merged into one company because the managment of the huge amount of funds could lead to corruption. The government should let the four compete healthily in running their healthcare programs under the current framework, it is impossible to entrust a healthcare program that covers 240 million people to a sole provider.
The government has appointed a 15-member SJSN security board representing all stakeholders. And they will be supervised by the National Investment Coordinating Board (Bapepam).
What is your comment on the small number of workers covered by Jamsostek? Do you think Jamsostek is effective at covering workers?
Jamsostek covers only eight million active participants plus 20 million non-active ones, meaning the growth of inactive participants is far higher than that of active ones. This situation is out of Jamsostek’s control because of a less than conducive economic environment, which has triggered massive layoffs. Jamsostek has launched a national campaign to promote Jamsostek programs as a real need, instead of an obligation, among workers and employers in its bid to control the decrease in the active participation.
Jamsostek has also gradually campaigned for social security among workers in the informal sector. So far more than 350,000 informal workers such as pedicab drivers, cleaners and small-scale business people have joined social security programs.
What are your thoughts on overlapping social security laws?
Besides the national social security system law we have the 2009 Social Welfare Law and the 2003 Labor Law, which require employers to pay severance and service pays to dismissed workers. On top of these many regions have been running regional healthcare programs (Jamkesda). I don’t know what
direction the nation is taking on this issue.
What do you think of the negative impacts of the ASEAN-China Free Trade Agreement?
FTA? It will be a new challenge for the whole nation. Its implementation will likely bring about company closures, labor dismissals and layoffs as our products will not be able to compete with China’s products flooding the domestic market. It will also threaten Jamsostek and its programs and leave more and more workers unprotected.
The government should allocate more stimulus funds to generate job opportunities. Jamsostek could decrease interest rates on its deposits to encourage banks to lower interest rates to below seven percent.