Call on supports

Employers have called on the government to ramp up support for domestic firms to stay afloat and remain competitive, as widespread layoffs reflect investor concerns over an uncertain economic outlook.

At least half of all businesses nationwide have carried out layoffs so far this year, according to a new report from the Indonesian Employers Association, or Apindo.

"We all agree that these layoffs are not isolated incidents. They are real, ongoing and will continue to unfold," Apindo chairwoman Shinta Kamdani told a press briefing in July in Jakarta.

"This isn't just about numbers. …When our (United States-imposed tariff) rate is not better than that imposed on competitors and orders shift elsewhere, it will hurt our labor force even more," Shinta said.

She was referring to the 19 percent "reciprocal" duty imposed by US President Donald Trump on Indonesian goods shipped to the US.

To help companies preserve cash flow, maintain production levels and avoid further layoffs, Apindo proposed a set of fiscal incentives.

These include a value-added tax exemption on subcontracting services and raw materials, faster processing of value-added tax refunds, lower import duties on industrial inputs and the expansion of employee income tax waivers.

The business group also called for broader access to competitive financing, such as lower-interest credit lines, as well as stimulus measures aimed at reducing operational costs.

These include a labor stimulus through Health Care and Social Security Agency subsidies, energy cost relief through discounts on electricity and gas prices and incentives for installing solar panels using net-metering schemes.

The Jakarta Post, Indonesia