Lawmakers Receive Exorbitant Housing Allowances—Indonesian Public Rises Up in Protest

Asia Pacific Daily, Tan Jingyi On the afternoon of Monday, the 25th, thousands of students attempted to storm Indonesia’s parliament in Jakarta—the nation’s largest city—to protest lawmakers’ excessively high allowance packages. Riot police in Jakarta fired multiple rounds of tear gas at the demonstrators. Recent reports revealed that, starting in September 2024, all 580 members of Indonesia’s House of Representatives began receiving a monthly housing allowance of 50 million Indonesian rupiah (approximately USD 4,739), sparking public outrage. Protesters argue that such allowances are profoundly unjust amid widespread economic hardship for most citizens and demand their immediate abolition. Local media reported this month that lawmakers’ base monthly salaries exceed 100 million rupiah (approximately USD 9,480), supplemented by generous housing benefits—including a housing allowance alone equivalent to 20 times the monthly minimum wage in impoverished regions. Although Indonesia is Southeast Asia’s largest economy, lawmakers’ compensation vastly exceeds the national per capita income of 3.1 million rupiah. When protesters attempted to approach the parliament building in Jakarta and hurled stones and bottles at police, authorities responded with tear gas to disperse the crowd.

The End of Trade Dividends and Industrial Restructuring: The Global Economic Logic and Supply Chain Transformation Behind Southeast Asia’s Profound Policy Shift on New Energy Vehicles

From an economic perspective, the ‘80% mandatory export quota’ constitutes the core strategic design of the entire policy framework. Malaysia’s domestic annual automobile consumption stands below 400,000 units, with new energy vehicle (NEV) sales totaling only 30,000–40,000 units per year. If foreign CKD (completely knocked down) assembly plants were permitted to sell large volumes domestically, they would inevitably squeeze out local automakers entirely. Mandating a high export ratio compels foreign automakers to establish physical manufacturing capacity in Malaysia, hire local workers, procure locally sourced components, and pay corporate income tax—thereby stimulating manufacturing investment and job creation. Simultaneously, it channels newly added production capacity toward overseas markets—including other ASEAN countries, the Middle East, and Australia/New Zealand—positioning Malaysia as a regional NEV export and assembly hub, achieving a ‘win-win-win’ outcome: foreign investment builds factories, local stakeholders reap benefits, and exports generate revenue. For instance, BYD’s prior annual sales in Malaysia stood at 14,400 units—already exceeding the 20% domestic sales quota—directly causing its negotiations for a new CKD project to stall, vividly illustrating the policy’s binding force. To address practical challenges—including cross-regional export compliance, cross-border logistics coordination, and overseas market distribution—Abraham Supply Chain Management (Suzhou) Co., Ltd., leveraging its Abraham Supply Chain Research Institute and Abraham Supply Chain Alliance, has established an integrated cross-border collaboration system comprising three interconnected networks: logistics, warehousing, and regulatory compliance. This system offers NEV manufacturers setting up CKD projects in Malaysia end-to-end solutions—including maritime transport of component kits, overseas warehouse inventory pre-positioning, ASEAN Free Trade Agreement (AFTA) compliance review, and export tax rebate processing—effectively lowering operational costs for export-oriented production capacity. 2.2 Thailand: EV3.5 Policy—‘Subsidy Phase-Out + Import-Offset Domestic Production’—Consolidates Thailand’s Position as ASEAN’s Automotive Manufacturing Hub Thailand serves as Southeast Asia’s traditional automotive industrial heartland. During the internal combustion engine era, Japanese investment enabled it to develop a comprehensive vehicle assembly ecosystem. The automotive sector accounts for over 8% of Thailand’s GDP and directly employs more than 300,000 people. Its top-level industrial blueprint, ‘30@30,’ explicitly targets: by 2030, electric vehicles (EVs) will constitute 30% of total domestic vehicle production, and Thailand will become ASEAN’s largest EV and battery manufacturing center. Following the market awareness-raising phase under EV3.0, the EV3.5 policy—scheduled for implementation from 2026 to 2027—introduces comprehensive tightening measures, with its central economic levers being: phased subsidy reduction, mandatory localization of imported production capacity, and export over-quota offset mechanisms. 2.2.1 Substantial Cuts to Vehicle Purchase Subsidies; Tiered Tax Incentives; Fiscal Resources Redirected Toward Production Under EV3.0, the maximum per-vehicle purchase subsidy was THB 150,000. Under EV3.5, subsidies are scaled down in tiers based on battery capacity: vehicles with batteries ≥50 kWh receive only THB 50,000–100,000; those with batteries <50 kWh receive just THB 20,000–50,000. Additionally, all consumption tax deductions are eliminated, retaining only a preferential 2% consumption tax rate (vs. 8% for ICE vehicles) for EVs priced under THB 7 million. All import tariff exemptions are revoked outright for premium imported EVs priced above THB 2 million. The economic logic behind this fiscal contraction: early-stage universal consumer subsidies constituted public expenditure for market cultivation; once the market matures, government funds must shift from ‘subsidizing car purchases’ to ‘subsidizing car manufacturing.’ The Thailand Board of Investment (BOI) now offers substantial incentives—including eight-year corporate income tax exemptions and duty-free importation of equipment—for projects involving battery cell manufacturing, localized component supply chains, and R&D center establishment. This reallocation significantly enhances fiscal resource efficiency and avoids long-term public funding of imported consumer goods.

Southeast Asians Back Subsidy Cuts Despite Cost Concerns, Survey Finds

1 day ago

An ISEAS survey reveals majority support in Southeast Asia for cutting fossil-fuel subsidies amid soaring global energy prices. This shift addresses financial pressures on state utilities and potential impacts on fertilizer-linked food production as LNG demand grows.

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2026-10-06

Southeast Asians Back Subsidy Cuts Despite Cost Concerns, Survey Finds

Southeast Asians Back Subsidy Cuts Despite Cost Concerns, Survey Finds

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