In Order to Accelerate Assistance to the People, Indonesia Changes Electricity Tariff Assistance to BSU
By: Arman Panggabean
The government under the leadership of President Prabowo Subianto has taken a strategic step by changing the assistance scheme from electricity tariff subsidies to Wage Subsidy Assistance (BSU).
This decision emerged as a quick response from the government to bureaucratic obstacles in the budgeting process that actually have the potential to threaten delays in the distribution of direct assistance to the community.
Rather than maintaining the electricity discount program which has the potential to be hampered administratively, the government then decided to distribute stimulus in the form of cash to groups that are more directly affected—namely low-wage workers and honorary teachers.
This change in the form of assistance is not just a matter of bureaucratic technicalities. The government considers that wage subsidies are much more data-ready, in addition to being easier to distribute to the community, and the positive impact can be felt directly by the beneficiaries.
Regarding this, Finance Minister Sri Mulyani emphasized that the government chose this new approach to ensure that the assistance distributed could be right on target and immediately boost the purchasing power of the Indonesian people.
Compared to continuing to wait for a discount scheme that turned out not to be able to be implemented effectively in the near future, direct cash assistance is considered more capable of answering people’s needs in a short time.
Previously, a 50% electricity tariff discount for household customers with power below 1,300 VA was designed to be implemented in June and July 2025. However, due to delays in budget approval, the plan was difficult to realize on time. The decision to cancel the program applies nationally, including in Batam and the Riau Islands.
Instead, the government has allocated a budget of IDR 10.72 trillion for the implementation of BSU, which will be given to 17.3 million workers with salaries below IDR 3.5 million per month.
In addition, similar assistance will also be received by 565 thousand honorary teachers, both under the auspices of the Ministry of Education and the Ministry of Religion. Each recipient will receive IDR 600 thousand paid at once for two months, namely June and July 2025.
According to the Coordinating Minister for Economic Affairs, Airlangga Hartarto, this transfer of assistance is part of a strategy to strengthen household consumption in an effort to maintain economic growth in the second quarter.
The government sees that BSU is a form of stimulus that is more ready to be implemented because it already has a database of recipients and a mature distribution infrastructure. Airlangga also said that this change does not reduce the government’s commitment to maintaining the purchasing power of the wider community.
In the employment sector, Minister of Manpower Yassierli explained that the disbursement of BSU is targeted to begin as early as Thursday, June 5, 2025. His party is currently completing the process of finalizing recipient data through coordination across ministries and institutions, including BPJS Ketenagakerjaan.
BSU will be given only to those who meet the criteria: Indonesian citizens with valid NIK, active as BPJS Ketenagakerjaan participants until April 2025, and receive a salary below IDR 3.5 million per month.
Yassierli emphasized that the main objective of this program is to maintain the purchasing power of low-income workers amid inflationary pressures and rising energy prices. The government wants to ensure that people still have sufficient consumption capacity so that economic growth is maintained. BSU is positioned as a direct fiscal intervention that can be felt in real terms by workers in the near future.
This scheme is also officially regulated through the Minister of Manpower Regulation (Permenaker) No. 5 of 2025, which replaces the previous regulation. With clear rules and a valid database, it is hoped that the distribution of assistance will be right on target and avoid potential misuse of the budget.
Although the decision to cancel the electricity tariff discount has drawn disappointment from some people, especially low-income households, the government’s approach is considered more adaptive to actual conditions.
Several economic observers consider this step to be a realistic decision that takes into account fiscal efficiency and the effectiveness of policies in responding to community needs.
BSU is not the only stimulus that the government is currently rolling out. There are also toll tariff cuts, public transportation discounts, increased social assistance, and cuts to work accident insurance contributions. The total stimulus prepared reached IDR 24.4 trillion, and all of it was directed at maintaining purchasing power and supporting domestic economic stability.
