Jakarta – The government's plan to discontinue commuter line (KRL) subsidies for middle-high income earners is flawed for a number of reasons. When the policy comes into effect in the first half of this year, these earners will have to pay the full price of Rp 15,000 (around US$1) for the first 25 kilometers, a fourfold increase from the prevailing fare of Rp 3,000 for the same distance.
The government says the move aims to make the subsidy more targeted by having only middle-low income earners benefit from it. But differentiating between the haves and have-nots of society will incentivize more people to return to their private cars and motorcycles.
Offering commuter-line subsidies for all passengers does not amount to a misallocation of resources, despite making the price artificially low. It is nothing to be ashamed of because in many countries that promote public transportation a single, subsidized fare applies to all.
To tackle congestion and pollution, our priority should be to have as many people as possible leave their private vehicles and opt to commute by public transportation. Jakarta's air pollution is already among the worst in the world. If white-collar workers or those considered better-off decide to take a commuter line because it is cheaper, then that is a win-win because they at least contribute to reducing emissions.
Transportation was the third-largest contributor to inflation in 2022, following a hike in subsidized fuel prices, airfares and inner-city transportation, Statistics Indonesia data show. A hike in commuter line tickets will add to the inflation burden, potentially exacerbating the pressure on the public's purchasing power.
Furthermore, a large number of people using commuter line trains will still have to pay for first-mile and last-mile transportation to get them to and from home train stations, which in Jakarta's satellite cities, where many, if not most, of Jakarta's employees live, is still limited and costly.
Most commuter-line users spend at least 30 percent of their income on commuting, despite the subsidy being available to all, a Transportation Ministry survey in 2013 revealed.
Meanwhile, transportation should cost less than 10 percent of anyone's monthly income, a study from the World Bank suggests. This implies that a higher commuter-line ticket fare, albeit for some, would aggravate their transportation cost burden.
Cheap tickets for all may seem unfair, as more than two-thirds of the government's transportation subsidy goes to the Greater Jakarta area, particularly for KRL services, leaving other cities and less developed regions to receive a smaller amount.
But the subsidy need not prevent the government from providing support for other cities and regions as well, as indeed is happening.
Yet, the government seems fixated on cutting costs by slashing transportation subsidies to Rp 2.5 trillion this year, a 12 percent drop from last year.
At the same time, the government revealed that it would provide a subsidy of up to Rp 80 million for every purchase of an electric vehicle (EV), which would mostly go to the rich and private vehicle owners, considering that they are the only ones who can afford to buy EVs.
This rightly insults the public's sense of justice, and it contradicts the government's own argument that differentiated subsidy is aimed at creating social justice.
Apart from that, social policy is the job of the Social Affairs Ministry, while the Transportation Ministry should instead focus on transportation.
Source: https://www.thejakartapost.com/opinion/2023/01/13/cheap-train-fares-for-all.htm