Jakarta - As a strategic effort to address global challenges, boost the quality of economic growth, and expand job creation, the Indonesian Government has launched the 2025 Economic and Employment Absorption Package, consisting of eight acceleration programs for 2025, four programs to be continued into 2026, and five flagship initiatives aimed at labor absorption.

Acceleration Programs for 2025

In a joint press briefing with the Minister of Finance at the Presidential Palace on Monday (September 15), Coordinating Minister for Economic Affairs Airlangga Hartarto outlined the Government’s eight acceleration programs for 2025. The first is an internship program for recent university graduates (within one year of graduation), in collaboration with the industrial sector. With an initial target of 20,000 beneficiaries, the program provides a monthly stipend equivalent to the regional minimum wage (UMP) for six months, with a total budget of IDR 198 billion allocated for 2025.

“The second program extends the Government-Borne Income Tax (PPh 21 DTP) incentive, previously applied to labor-intensive sectors, to now include the tourism, hotel, restaurant, and café sectors. This will benefit 552,000 workers, covering 100% of their income tax for the remainder of the 2025 tax year (three months), with an allocated budget of IDR 120 billion,” said Minister Airlangga.

He also announced the continuation of the food assistance program over the next two months, providing 10 kilograms of rice per month in October and November, with a budget of IDR 7 trillion. The program will be evaluated in December to assess its effectiveness and potential continuation.

In addition, the Government will introduce subsidies for work accident insurance (JKK) and life insurance (JKM) for informal workers, including online drivers, motorcycle taxi drivers, couriers, and logistics personnel. The program targets 731,361 beneficiaries with a 50% reduction in insurance premiums for six months. Under JKK, workers will receive compensation for work-related accidents of up to 56 times their salary, death benefits of up to 48 times their salary, and educational scholarships worth IDR 174 million for two children. Through JKM, beneficiaries’ families will also receive IDR 42 million in death compensation.

The Government will also offer improved housing benefits through BPJS Ketenagakerjaan by reducing the interest rate for housing loans from BI Rate +5% to BI Rate +3% for workers, applicable to both mortgage payments and down payments. For developers, the rate will be lowered from BI Rate +6% to +4%, making home ownership more accessible for workers.

“This initiative will be supported by relaxed credit reporting requirements (SLIK) from the Financial Services Authority (OJK). The budget, amounting to IDR 150 billion, will be covered by BPJS. This year, we aim to support 1,000 housing units, and the number will be increased in 2025 to align with the President’s target of providing 3 million homes,” added Airlangga.

Furthermore, the Government has prepared a cash-for-work (padat karya tunai) program, to be implemented by the Ministry of Public Works and Housing (PUPR) and the Ministry of Transportation between September and December 2025, targeting 609,465 beneficiaries. Budgets of IDR 3.5 trillion and IDR 1.8 trillion have been allocated to the respective ministries.

The Government is also accelerating deregulation through the issuance of Government Regulation No. 28 of 2025, which simplifies risk-based business licensing by integrating systems across ministries/agencies and expanding the application of Detailed Spatial Plans (RDTR) into the Online Single Submission (OSS) system. Each RDTR will receive IDR 3.5 billion in funding, with a target of 50 regions in 2025 and 300 in 2026. Additionally, the Government is launching urban pilot projects, including in Jakarta, aimed at improving housing quality and providing space for the gig economy.

Programs to Be Continued in 2026

Looking ahead to 2026, the Government will extend the 0.5% final income tax incentive for MSMEs with annual turnover up to IDR 4.8 billion. This measure, previously extended yearly, will now be applied through 2029. A budget of IDR 2 trillion has been allocated for 2025, targeting 542,000 registered taxpayers under a revised government regulation.

Additionally, the Government will continue the PPh 21 DTP incentive for workers in the tourism sector, targeting those earning below IDR 10 million per month, with a projected budget of IDR 480 billion. This incentive will also be extended to labor-intensive industries, including footwear, textiles, apparel, furniture, leather, and leather goods, benefiting 1.7 million workers with a 2025 budget of IDR 800 billion.

The JKK and JKM contribution discount program will also be expanded in 2026, covering a broader range of informal workers including farmers, traders, fishermen, construction workers, and domestic workers. This program targets 9.9 million beneficiaries with a total budget of IDR 753 billion.

Flagship Job Creation Programs

Minister Airlangga also highlighted several flagship programs designed to drive employment:

Merah Putih Village Cooperatives Program, which aims to establish 80,000 new business units, potentially absorbing 681,000 workers and reaching up to 1 million jobs by December 2025.

Merah Putih Fishermen Villages, to be developed in 100 coastal villages, with a projected job creation of 8,645 in the initial phase, and up to 200,000 jobs across 4,000 locations in the long term.

In the fisheries sector, the revitalization of 20,000 hectares of ponds in the northern coastal region (Pantura) is expected to absorb 168,000 workers. This will be complemented by the modernization of the national fishing fleet, including the construction of 1,000 new fishing vessels and the procurement of 30 GT to 2,000 GT capacity ships for cooperatives and state-owned enterprises (SOEs), potentially creating 200,000 jobs.

In the plantation sector, a people’s plantation program involving the replanting of 870,000 hectares of land is expected to generate over 1.6 million new jobs. Priority commodities include sugarcane, cocoa, coconut, coffee, cashews, and nutmeg.

These efforts will be reinforced by a liquidity absorption package currently being prepared by the Ministry of Finance to further boost employment opportunities, improve public welfare, and support long-term, sustainable national economic growth.

“The Minister of Finance has also proposed the formation of an acceleration task force for priority programs, to be led by the Coordinating Minister for Economic Affairs and the Coordinating Minister for Food Affairs, and include the Deputy Minister of Finance, Minister of Investment, Head of BKPM, Minister of National Development Planning (PPN/Bappenas), along with all relevant ministers,” concluded Minister Airlangga.