13th Economic Policy Package Indonesia: Property for Low Income Families
The government of Indonesia will soon unveil a new economic policy package, the 13th in the series of packages that have been released since September 2015 with as overall aim to boost Indonesia's economic growth. Indonesian Chief Economics Minister Darmin Nasution said the 13th edition, which is currently being discussed among government officials, will focus on residential property for low income families. However, he refrained from providing more details at this stage.
It would not be the first time the current government - under the leadership of Joko Widodo - undertakes efforts to support the low income families to obtain property. In April 2015 the Indonesian government launched the "One Million Houses Program", a five-year program through which the government aims to provide adequate housing facilities to low income citizens.
Within five years the government aims to see the construction of one million houses consisting of 603,516 units for low income residents and 396,484 units for non-low income residents. This program requires investments up to IDR 67.8 trillion (approx. USD $5 billion). It is financed through the state budget (IDR 8.1 trillion), the BPJS employee social security program (IDR 48.5 trillion), the Housing Savings Advisory Board for Civil Servants known in Indonesia as Bapertarum-PNS (IDR 3.1 trillion), state insurance firm Taspen (IDR 2 trillion), state house developer Perum Perumnas (IDR 1 trillion), and the housing loan liquidity facility (IDR 5.1 trillion).
There have been a number of problems related to the government's "One Million Houses Program":
- The program has not been socialized to (potential) stakeholders outside the urban areas on Java
- Data and statistics regarding housing in Indonesia are not accurate
- The program is yet to receive full attention from the regional governments
- Regional legislation does not optimally support implementation of the program
- It requires a lot of time (and permits) before construction of houses can start
- There is limited availability of land, while prices of land that is available are high
- The central bank of Indonesia set high requirements to obtain a mortgage
Economic Stimulus Packages of the Indonesian Government:
| Package | Unveiled | Main Points |
| 1st | 9 September 2015 |
• Boost industrial competitiveness through deregulation • Curtail red tape • Enhance law enforcement & business certainty |
| 2nd | 30 September 2015 |
• Interest rate tax cuts for exporters • Speed up investment licensing for investment in industrial estates • Relaxation import taxes on capital goods in industrial estates & aviation |
| 3rd | 7 October 2015 |
• Cut energy tariffs for labor-intensive industries |
| 4th | 15 October 2015 |
• Fixed formula to determine increases in labor wages • Soft micro loans for >30 small & medium, export-oriented, labor-intensive businesses |
| 5th | 22 October 2015 |
• Tax incentive for asset revaluation • Scrap double taxation on real estate investment trusts • Deregulation in Islamic banking |
| 6th | 5 November 2015 |
• Tax incentives for investment in special economic zones |
| 7th | 4 December 2015 |
• Waive income tax for workers in the nation's labor-intensive industries • Free leasehold certificates for street vendors operating in 34 state-owned designated areas |
| 8th | 21 December 2015 |
• Scrap income tax for 21 categories of airplane spare parts • Incentives for the development of oil refineries by the private sector • One-map policy to harmonize the utilization of land |
| 9th | 27 January 2016 |
• Single billing system for port services conducted by SOEs • Integrate National Single Window system with 'inaportnet' system • Mandatory use of Indonesian rupiah for payments related to transportation activities • Remove price difference between private commercial and state postal services |
| 10th | 11 February 2016 |
• Removing foreign ownership cap on 35 businesses • Protecting small & medium enterprises as well as cooperatives |
| 11th | 29 March 2016 |
• Lower tax rate on property acquired by local real estate investment trusts • Harmonization of customs checks at ports (to curtail dwell time) • Government subsidizes loans for export-oriented small & medium enterprises • Roadmap for the pharmaceutical industry |
| 12th | 28 April 2016 |
• Enhancing the ease of doing business in Indonesia by cutting procedures, permits and costs |
| 13th | unknown | • Residential property for low income families (more details to follow) |
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