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ndonesia'€™s new finance minister on Wednesday reiterated the government'€™s commitment to hiking fuel prices, at the same time revealing a plan to overhaul the country'€™s social-compensation system to make its cash-transfers program better targeted to the poor.

A hike in the price of subsidized fuel is set to come into effect this year, but the policy details '€” such as when and by how much fuel prices will be increased '€” would not be announced too soon to prevent excessive buildup of inflation expectations, Finance Minister Bambang Brodjonegoro said.

Bambang said that the government was now focusing on revamping the cash-transfers program to cushion the poor from inflationary pressures from the fuel-price hike. The social-protection program would be designed to boost the productivity of low-income households, while at the same time preventing people from spending the funds in an unproductive manner, he added.

'€œWe may have a voucher system where we won'€™t hand out cash,'€ the finance minister told The Jakarta Post. There could be a social-assistance scheme designed for fishermen and farmers, among other people, in which they would buy fertilizers or subsidized fuel for their businesses using the vouchers.

Telecommunications companies would be involved as well, as the government would design a system which disadvantaged people in some areas could access the social-compensation funds through a mobile-money mechanism considering Indonesians'€™ cell phones usage has exceeded 100 percent.

The new social-assistance program would not be a one-off that is distributed to the poor after fuel prices are raised, according to Bambang.

Instead, it could be held recurrently under the Social Affairs Ministry to promote economic inequality and tackle poverty levels.

'€œThe paradigm shift here is the move away from goods-based subsidies, such as subsidization of fuel, to people-based subsidies to farmers and fisherman,'€ Bambang stated.

President Joko '€œJokowi'€ Widodo'€™s economic advisors have stated that fuel prices might be increased by Rp 3,000 (24 US cents) per liter in November. Every Rp 1,000 hike in the price of subsidized fuel '€” from Rp 6,500 per liter at present '€” would save the state Rp 46 trillion a year, official estimates show.

If Jokowi proceeds with hiking fuel prices, the government currently has Rp 10 trillion of funds earmarked for social assistance funds: Rp 5 trillion from the revised 2014 State Budget and another Rp 5 trillion from the 2015 State Budget.

Jokowi is leading an economy that grew at its slowest pace since 2009 in the second quarter, with the Gini coefficient '€” which measures inequality '€” worsening.

He has pledged to hike fuel prices to trim down fuel subsidies, estimated to hit Rp 276 trillion next year, and to redirect the funds to more growth-generating projects such as basic infrastructure.

'€œThe new voucher-based compensation system, if implemented, is a big step forward in attacking the structural poverty in the economy,'€ said Edimon Ginting, chief economist of the Asian Development Bank in Indonesia.

'€œIt could make the government'€™s current subsidy scheme better targeted,'€ he went on. '€œIt'€™s also good to see that the social assistance funds could be used by the poor not only for consumption, but also for productive activities.'€