Indonesians Protest MPs’ $3,000 Housing Allowance Amid Austerity

Protests erupted in Jakarta on August 25, 2023, as hundreds of Indonesians voiced their anger over a new monthly housing allowance for Members of Parliament (MPs) amounting to 50 million rupiah (approximately US$3,075). Demonstrators criticized the timing of this announcement, which came just days after President Prabowo Subianto outlined a series of austerity measures aimed at improving government spending efficiency amid ongoing economic uncertainty.

The housing allowance, nearly ten times the minimum wage in Indonesia’s capital, was introduced the week prior to the protests. Many citizens and experts deemed the decision “insensitive,” especially considering the financial struggles faced by the average Indonesian. As frustration grew on social media platforms, student groups and other organizations organized a demonstration outside the parliament building, calling for the repeal of certain laws, including one that expands military involvement in governance.

Protesters attempted to breach barriers set up by authorities, leading to clashes where police deployed tear gas and water cannons to disperse the crowds. University student Ivan expressed the sentiment shared by many, stating, “It’s really heartbreaking. Many people still earn less than 50,000 rupiah a day. They should see that the condition of Indonesian society right now is dire.” Another protester, Zico, emphasized that the funds allocated for MPs would be better spent on increasing teachers’ salaries or creating jobs, as teacher salaries in Indonesia range from 1.2 million to 7 million rupiah monthly.

Despite police efforts to contain the protests, demonstrators regrouped and attempted to push closer to the parliament again in the afternoon, only to be met once more with tear gas. The protests disrupted transportation services in Jakarta, causing road closures and the suspension of train and bus services for several hours. Parallel demonstrations were reported in other cities across Indonesia on the same day.

Background of the Housing Allowance

The controversial allowance was disclosed by Adies Kadir, deputy speaker of the House of Representatives, shortly after President Prabowo revealed the national budget in his first State of the Nation address on August 15. Adies responded to inquiries regarding potential increases to the parliamentary budget, which raised eyebrows among the public.

Indonesia’s House of Representatives consists of 580 members. In October of the previous year, House secretary-general Indra Iskandar announced that MPs would no longer receive official residences due to the deteriorating conditions of these properties. Following this decision, MPs petitioned for a cash allowance instead. Indra indicated that the housing allowance amount was still under review at that time.

In addition to the housing allowance, MPs will see increases in their rice and fuel allowances, from 10 million to 12 million rupiah and from 5 million to 7 million rupiah respectively. Adies stated, “The finance minister also felt sorry for our fellow MPs. That’s why the allowances were increased, and we thank her for that,” while reiterating that the adjustments were based on necessary calculations.

Public Reaction and Criticism

The immediate public backlash was significant. Social media users highlighted stark contrasts between the lives of everyday Indonesians and the perceived extravagance of lawmakers. Viral videos juxtaposed footage of commuters in crowded public transport with images of MPs celebrating during the State of the Nation address. The hashtag #bubarkanDPR, translating to “disband the parliament,” trended on Twitter, signaling widespread dissatisfaction.

Some lawmakers defended the housing allowance, asserting that it was a carefully considered decision made collaboratively by both the executive and legislative branches. Singer-turned-MP Sigit Purnomo, known as Pasha Ungu, remarked, “Everything has been calculated carefully. What are the needs of MPs? How does it fit with the government’s finances? Does it make sense or not?” Additionally, Puan Maharani, a prominent figure from the Indonesian Democratic Party of Struggle (PDI-P), commented that the allowance was adjusted to reflect current conditions and prices in Jakarta.

Critics have described the 50 million rupiah stipend as excessive. A property analyst noted that this amount could cover the rent for a luxury home in Jakarta’s most exclusive areas. Media Wahyudi Askar, an economist at the Center for Economic and Legal Studies (CELIOS), criticized the decision as “irrational,” suggesting that the funds would be better allocated toward economic stimulus or preventing local tax increases. He recommended that allowances be tied to measurable performance metrics.

Economics and public policy lecturer Achmad Nur Hidayat of National Development University advocated for a reform of the fragmented pay structure within parliament, proposing realistic caps on allowances for housing and vehicles.

The controversy surrounding the housing allowance emerges in the context of President Prabowo’s commitment to austerity measures, which he outlined during his State of the Nation address. He noted that budget cuts would save 300 trillion rupiah, funding various initiatives, including a free-meal program costing taxpayers 335 trillion rupiah annually. The Finance Ministry warned that such initiatives could lead to a government deficit of around US$40 billion by the end of 2025.

Analysts suggest that the increase in MPs’ allowances may reflect President Prabowo’s need for parliamentary support for his ambitious policies. Political observer Kunto Adi Wibowo noted that higher allowances could be an attempt to prevent potential political disruptions to Prabowo’s programs, while Hendri Satrio of Paramadina University pointed out that public opposition could force the president to be more cautious in implementing benefits for MPs that do not align with the public’s needs.

As the debate continues, the future of the housing allowance remains uncertain, with the voices of the protesters underscoring the deep discontent felt by many Indonesians regarding the perceived disconnect between their struggles and the privileges afforded to their lawmakers.