Govt insists on sustaining control on social insurances

The government insists that it sustain its authority on social security funds through its state-owned insurers and rejects the social insurers bill (RUU BPJS) to regulate new bodies to manage the funds.

Finance Minister Agus Martowardojo, the government’s lead negotiator in the bill’s deliberation, said the government should control the appoinment of insurers and be given the authority to collect contribution from citizens for five compulsory benefits mandated by the 2004 Social Security Law.

“[The government] has no fiscal capacity to run the programs,” he said during the hearing at the House of Representatives on Wednesday.

Instead of moving on to deliberate the bill, he said, it was more important to revise the 2004 law to implement the national social security system immediately.

The social security providers could be state-owned companies that are tasked to collect dues from 240 million participating in the five mandatory programs, he said.

The 2004 law requires the government to provide five separate mandatory social benefits: Healthcare, workplace accident coverage, death coverage, old-age risk and pensions. It also mandates another law to appoint and regulate providers of the benefits and that the providers be non-profit.

Currently, the government has run all of the benefits but at a very limited coverage through four existing state-owned enterprises: PT Jamsostek, PT Askes, PT Taspen, PT Asabri, most of which are still operating as regular for-profit companies.

The hearing signaled a setback in the bill’s deliberation after an informal agreement was reached between legislators and the government to let non-profit institutions run the benefit funds.

The deputy chairman of the House’s working committee for the bill, Surya Chandra Surapaty from the Indonesian Democratic Party of Struggle (PDI-P), accused the government’s concept as a way to comply with the framework proposed by the international organizations.

“After overexploiting Indonesia’s natural resources, now [foreign countries] are targeting our human resources,” he said, citing the government’s concept was quite similar to that proposed by the World Bank and the ADB.

The committee remained firm on a single non-profit institution running the programs to help the country become financially independent and reduce its dependence on foreign loans, Surya said citing Malaysia, which perked its ringgit against the US dollar during 1997 economic downturn because of its huge social security fund.

The bill deliberation was halted with the conclusion that the government was not prepared for further discussion and with the finance minister rejecting to include his demand at the hearing into RUU BPJS’ list of issues (DIM).

Rieke Diah Pitaloka, another legislator from the PDI-P, said the government had neglected the implementation of the 2004 law by not issuing 11 mandated government regulations and 10 mandated presidential instructions to run the social security system.

“The ministers should not speak too much but insert their crucial points in the DIM to have them discussed together in the next meeting so that both sides can provide solutions,” she said.