House Speaker Puan Maharani. (Antara Photo/Hafidz Mubarak A.)

House Passes Law Guaranteeing Jokowi's $27b Covid-19 Stimulus

BY :MARKUS JUNIANTO SIHALOHO

MAY 12, 2020

Jakarta. The House of Representatives passed into law a government regulation on emergency state financing for Covid-19 mitigation on Tuesday, offering solid footing for President Joko "Jokowi" Widodo's administration to move forward with plans to lessen the impact of the pandemic on public welfare and the economy.

Jokowi signed off on the government regulation in lieu of law (Perppu) on state financial policies for handling the pandemic in March to allow the government to add Rp 405 trillion ($27 billion) to government spending this year to be disbursed as fiscal stimulus.

The regulation also allows the government to exceed the state budget deficit cap of three percent of the country's gross domestic product.   

While the regulation mostly lays out key provisions for healthcare spending, social safety net and business incentives, it also contains controversial articles that shield government officials from legal prosecution. 

But for most lawmakers attending the House's online plenary meeting on Tuesday, the dangers of Covid-19 were too great to squabble over technicalities.  

"Can this [regulation] be passed into law?" House Speaker Puan Maharani asked the lawmakers. 

"Aye," came the majority answer. 

Out of nine factions in the House, only the Prosperous Justice Party (PKS) had rejected the law.

But the objection from the conservative Islamic party, which holds only 8.7 percent of the seats in the House, was not enough to derail it. 

The Indonesian Democratic Party of Struggle (PDI-P) – the party of Jokowi and Puan – supported passing the regulation into law.

But PDI-P demanded closer cooperation between the government, central bank Bank Indonesia, the Financial Services Authority (OJK) and the Deposit Insurance Agency (LPS) to keep the financial system stable. 

PDI-P also asked the government to ensure the stimulus would pay for every citizen's basic needs during the pandemic. 

The Great Indonesia Movement Party (Gerindra) said the government should tread carefully with the new budget and refrain from incurring even larger debts. 

The party said all new stipulations related to the state budget in this emergency law should only be temporary. 

"The law should not be a reason for the government to get even more into debt to pay for its Covid-19 mitigation efforts," Said Abdullah, the chairman of the House's budget committee, read from Gerindra's notes. 

Meanwhile, a hearing to challenge the Perppu at the Constitutional Court was adjourned. 

The plaintiffs in the case, among them politicians Din Syamsuddin, Amien Rais dan Sri Edi Swasono, had entered a plea to annul the regulation to the court. 

The Constitutional Court has the power to evaluate any law against Indonesia's 1945 Constitution. 

The plaintiffs argue the Covid-19 pandemic is not an emergency situation and hence there is no need for the government to issue the Perppu.

They also rejected the clause in the regulation that gives immunity from prosecution for government officials, arguing it could easily lead to corruption. 

The court had adjourned the hearing until Thursday.

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