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Govt to subsidize wages with Rp 8.8t, but business wanted more
The government will subsidize wages for some 8.8 million people for two months to take the pressure off employers in industries hit hard by virus containment measures.
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Police divert traffic at the closed Jl. Sudirman in Purwokerto, Banyumas, Central Java, on July 3, 2021. The Banyumas COVID-19 task force closes several major roads in the regency between 2 p.m. and 4 p.m. during the emergency public activity restrictions (PPKM Darurat) imposed to curb the spread of COVID-19. (Antara/Idhad Zakaria)
T
he government has announced a wage subsidy to help employers weather a period of tightened restrictions to prevent COVID-19 infections, but the scheme falls far short of what business associations have demanded.
Finance Minister Sri Mulyani Indrawati said the government would subsidize wages to the tune of Rp 500,000 (US$ 34.50) per worker per month. The program will run for two months, so that each employee will get Rp 1 million, which is to be transferred in a single payment by state-owned banks directly to the employees.
The subsidy will only apply to workers who are on a monthly salary of less than Rp 3.5 million, are registered with the Workers Social Security Agency (BPJS Ketenagakerjaan) as of June 2021 and work in nonessential industries in areas with level 4 public activity restrictions (PPKM).
“We will provide Rp 8.8 trillion worth of wage subsidies for 8.8 million workers [in nonessential industries],” Sri Mulyani told reporters in an online press conference on Wednesday evening.
With the support, the government aims to minimize the impact on businesses caused by the activity restrictions. The government recently extended the restrictions by five days to July 25 but promised to loosen them should there be a significant drop in cases.
However, at almost 50,000 new cases on Thursday, the daily tally of confirmed COVID-19 infections remains far above the government’s short-term target of below 10,000.
Read also: Help us pay wages or else we cut jobs, businesses tell govt
