The Jakarta Post
The Industry Ministry is discussing the possibility of providing businesses with soft loans to enable them to pay Idul Fitri holiday bonuses (THR) as the economic downturn is forcing companies to withhold or cut the bonus payment.
The ministry is in discussion with the central bank and the Financial Services Authority (OJK) over the matter, Minister Agus Gumiwang Kartasasmita told journalists during an online press briefing on Tuesday.
“We are preparing a soft loan scheme for hard-hit industries so they can pay THR to their employees in full,” Agus said.
The COVID-19 pandemic has disrupted business activity as consumers stay at home to curb the virus spread, resulting in weakening demand. Companies across the country, mainly those operating in the hospitality sector, have furloughed or laid-off employees.
Indonesia usually sees household spending, which accounts for more than half of economic activity, peak during Ramadan and Idul Fitri, as companies and the government pay bonuses to employees and civil servants, respectively.
While some companies have struck a deal with their workers or unions to pay their THR in installments, Agus said companies that could not come to an agreement with their workers could apply for the loans.
“During a dialogue with industrial company associations, the companies said they were willing to pay their workers’ THR even though they had to take loans out from banks,” he said.
Previously, Coordinating Economic Minister Airlangga Hartarto reminded businesses that they were obligated pay THR, despite the economic pressures brought about by the pandemic.
“President Joko ‘Jokowi’ Widodo has discussed the business sector’s readiness to pay THR and [we remind] the private sector that paying THR is mandatory,” Airlangga said during a virtual press briefing on April 2.
Meanwhile, the Indonesian Employers Association submitted on April 6 a proposal to the Office of Coordinating Economic Minister and the Workers Social Security Agency, asking to postpone the payment of THR for a year due to the COVID-19 crisis.