There Is No 2023 State Budget Allocation For Electric Vehicle Subsidies, Banggar DPR: Is It Worth A Capable Subsidy?

President Jokowi while charging an electric car/ANTARA HO

Chairman of the DPR Budget Agency (Banggar) Said Abdullah did not support the Ministry of Industry's plan to subsidize electric vehicles (cars and motorbikes). The DPR Budget Agency ensures that there will be no 2023 APBN allocation.

As stated by the Minister of Industry, the government will provide subsidies for electric cars of IDR 80 million and hybrid-based cars of IDR 40 million, as well as new electric motors of IDR 8 million.

"If this subsidy will be realized in the form of cash for the purchase of cars and electric motors, and if it is realized next year (2023), we emphasize that there will be no 2023 APBN allocation for policy support," Said told reporters, Monday, December 19.

Said emphasized that the government must review the policy again because in 2023 Indonesia must be prepared to face an uncertain global economic situation.

He also assessed that the subsidy plan for cars and electric motors is not very much proportional to the allocation of social protection programs received by each poor household.

"Is it appropriate in the midst of our situation to face a difficult global economy, whose effect will certainly have an impact on the domestic economy and then we think about subsidies for a capable household?" asked the PDIP legislator for the East Java electoral district.

Said said, currently there are still more than half of the number of Indonesians who have not met the standards of nutritious food, and the prevalence of stunting for toddlers is still high. Therefore, according to him, this problem is better a priority policy than subsidizing vehicles for the wealthy.

"The main mandate of our constitution and our country is to eradicate the people from poverty. This must be our main perspective in formulating priority policies," said Said. After all, continued Said, the government has actually provided a lot of incentives to the electric vehicle industry. In addition, Indonesia is heading for low-emission transportation. "We have an agenda to reduce oil imports, efforts to make the state budget healthy and sustainable policies to reduce poverty levels should be able to run in balance," said Said.

In addition, Said explained, the Government through Presidential Decree No. 55 of 2019 concerning the Acceleration of Battery-Based Electric Motor Vehicle Programs for Road Transportation, the direction is to encourage the creation of a Battery-Based Electric Motor Vehicle (KBLBB) ecosystem, specifically motorcycles and cars. The ecosystem, said Said, concerns the strategic environment to support the growth of product innovation, readiness of raw materials and raw materials, investments, supporting infrastructure such as the ultra fast charging Public Electric Vehicle Charging Station (SPKLU) and the Public Electric Vehicle Battery Exchange Station (SPBKLU).

"All these strategic devices must grow together in parallel," he explained.

Said added, the government should be consistent with Presidential Decree Number 55 of 2019 which provides added value to the rise of the domestic industry, especially aspects such as the Domestic Content Level (TKDN) which is also regulated in stages.

"The amount of TKDN is expected to increase from the specified time target. Where TKDN for two wheels in 2026 is a minimum of 80 percent and 2030 for four wheels with a minimum of 80 percent. We hope this target can be consistently met," he said.

If the government does prioritize domestic industry players, it is important to create the KBLBB ecosystem even though a number of important technologies are still controlled by foreign industry players, but Said said, the government must provide incentive support for domestic investment for the electric vehicle industry. "If the scheme is foreign investment, then it is necessary to involve the supply chain of production by more national partner partners, both state-owned and domestic private," he concluded.