Indonesia has updated its consumer stimulus package for June and July, announcing the cancellation of a planned electricity discount and doubling the wage subsidies for low-income workers. Finance Minister Sri Mulyani Indrawati revealed that wage subsidies will increase from IDR150,000 (about USD 9) to IDR300,000 per individual each month. This subsidy will support roughly 17.3 million workers earning up to IDR3.5 million monthly and around 565,000 contract-based honorary teachers.
The government will temporarily allocate IDR10.72 trillion from the state budget to fund these subsidies. Eventually, the costs will be covered by BPJS Ketenagakerjaan, Indonesia’s social security agency. The wage subsidy is part of a larger stimulus package originally announced in May, which aimed to boost consumer spending through six key areas. These included transportation discounts for trains, ships, and planes, toll discounts for approximately 110 million drivers, social assistance for 18.3 million beneficiaries, and lower work accident insurance premiums for labor-intensive sectors.
The original plan also featured a 50 percent electricity discount similar to one provided earlier this year in January and February. However, this part of the stimulus was dropped due to delays in the budgeting process. The government cited the slow preparation as the reason for scrapping the electricity discount, which could not be implemented in time for June and July. Instead, the wage subsidy was increased to offer more direct financial help to workers.
The cancellation of the electricity discount raised questions as the Energy and Mineral Resources Ministry stated it was not involved in planning the policy. The ministry confirmed it was not part of any discussion or forum related to the June and July electricity discount. The Energy Minister also noted that no official reports or technical briefings had been received about the initiative before the expected rollout. Coordination between the Energy and Finance Ministries is necessary before the state power company PLN can take action. PLN has yet to receive any formal instruction to implement the discount.
According to the Finance Ministry, the total stimulus package will cost around IDR24.4 trillion. The government hopes the package will help many Indonesians manage the rising cost of living and encourage spending to support economic growth. The increased wage subsidy provides direct cash assistance, which may lead to higher consumer spending. The removal of the electricity discount, however, means some households will not benefit from reduced utility bills as initially planned.
