Finance Minister Sri Mulyani Indrawati said on Tuesday that the government would disburse Rp 4.6 trillion to the 15.2 million beneficiaries of its staple needs program. The government will also add Rp 1.5 trillion to housing loan and down payment subsidies for low-income Indonesians.

“This is the 30 percent bottom segment. They will use the funds immediately for consumption,” Sri Mulyani said at the State Palace.

The government will also grant Rp 3.3 trillion to regional authorities to compensate for tax revenue losses from tax exemptions that are also part of the stimulus.

“We will support ten tourist destinations [...] by not collecting hotel and restaurant taxes over [the next] six months,” said Sri Mulyani.

The 10 destinations will include Yogyakarta; Malang, East Java; Manado, North Sulawesi; Bali; Mandalika, West Nusa Tenggara; Labuan Bajo, East Nusa Tenggara; Bangka Belitung province; Batam and Bintan of the Riau Islands; and all regencies in North Sumatra’s Lake Toba.

President Joko “Jokowi” Widodo, who has championed tourism as a new source of economic growth for Indonesia, faces a four-year low economic growth rate of 5.02 percent in 2019. The novel coronavirus may drag down growth by up to 0.6 percentage points.

Foreign tourist arrivals contracted by 2 percent in December. Chinese tourists account for 12 percent of arrivals, the second-biggest source of foreign tourism in Indonesia. The Indonesian Hotel and Restaurant Association (PHRI) has reported 40,000 room cancellations and 20,000 visitor cancellations in Bali since the outbreak became apparent in early January.

The Tuesday meeting follows a Cabinet meeting last week that unveiled a plan to provide travel discounts of up to 30 percent for both foreign and local travelers.

Several ministers who attended the Tuesday meeting said the discount would be on 25 percent of seats on airplanes that flew to the 10 destinations from March to May of this year.

To achieve this, the government will give Rp 298.5 billion worth of incentives to airlines and travel agents to attract foreign tourists to Indonesia. It will allocate another Rp 443.39 billion in discounts for domestic tourists to the 10 tourist destinations outlined in the program.

The government will also reallocate Rp 96.8 billion of the existing Rp 147 billion from the special allocation fund (DAK) for tourism toward grants for regional authorities to boost their own tourism industries.

Coordinating Economic Minister Airlangga Hartarto added that passenger service charges for the 10 destinations would be cut by 20 percent during the next three months, as a result of incentives provided by state-owned airport operator Angkasa Pura (AP).

State-owned oil and gas holding company Pertamina will provide discounts for aviation fuel during the same time period, amounting to Rp 265.5 billion in value, he said.

“In the future, the government will prepare other incentives that will follow the development of the coronavirus and its impacts on the economy in early or late April,” said Airlangga.

Association of Indonesian Tour and Travel Agencies (ASITA) deputy chairman Budijanto Ardiansyah said it remained unclear how the government would channel funds to airlines, travel agents and other recipients of the incentives. He worried that directly giving beneficiaries large sums of money would result in a misuse of funds.

Budijanto suggested a more traveler-focused approach, where visitors could reimburse portions of their hotel and airline fees if they provided the necessary documents.

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