Jakarta – The Indonesian government is moving to overhaul its subsidy distribution system,particularly for energy,to eliminate benefits for wealthier citizens,Finance Minister Purbaya yudhi sadewa announced Thursday. The move comes after findings revealed that individuals in higher income brackets are currently receiving subsidies intended for lower-income populations.
“We redesigned the subsidy so that it is more targeted because now that we have seen it, it turns out that the rich still get it,” Purbaya stated following a meeting with Danantara and Commission XI DPR RI at the Parliament Complex on December 4th. “I have been given the next six months to design it.”
The Ministry of Finance has been tasked with redesigning the scheme within six months, with a phased implementation expected over the next two years. The focus will shift subsidies away from decile groups 8, 9, and 10 towards deciles 1 through 4.
According to Purbaya, the improvements require close coordination with Danantara, the state-owned enterprise holding company, as the changes will impact state-owned businesses fulfilling Public Service Obligations (PSOs) involving subsidies and compensation.
Danantara Indonesia CEO Rosan Roeslani affirmed the collaboration,stating that the joint effort aims for fairer and more targeted distribution of subsidies and compensation. “With these betterment efforts, he ensures that the subsidy and compensation distribution budget can be more efficient, but will still not reduce the rights that should be obtained by the community,” Roeslani said. He added that the changes would also benefit state-owned enterprises burdened by PSO-related subsidy costs.
