An omnibus law is a form of law that regulates various complex subjects, which are then put together in a single legal instrument.
By
M JUSUF KALLA
·7 minutes read
In the midst of the COVID-19 pandemic, which has yet to show signs of subsiding, workers and students took to the streets in a number of big cities in the country on Oct. 8 to oppose the Job Creation Bill, which was made under an omnibus concept. On Oct. 5, the House of Representatives passed the bill into law. However, the new law needs the President’s approval. After that it will officially be promulgated in the state gazette and be given a number.
An omnibus law is a form of law that regulates various complex subjects, which are then put together in a single legal instrument. Omnibus laws generally supersede existing regulations because they need to be mended. This has made the Job Creation Bill a giant law, consisting of 812 pages with 1,244 articles.
The use of omnibus laws began in the 1880s in England, the United States and Canada. In Southeast Asia, on July 16, 1987, the Philippines introduced the Omnibus Investment Code to facilitate investment in the country. Vietnam has also issued an omnibus law to implement a WTO agreement.
The government’s goals
In every democratic country, the government must give priority to economic development programs to improve the welfare and the prosperity of the people and to ensure that each citizen will have a job so that they can send their children to school, pay for healthcare, own a house and so on.
One of the ways to achieve these goals is to formulate conducive policies in order to increase both domestic and foreign investment by creating legal certainty, a bureaucratic chain that is uncomplicated and more efficient and clean officials so that everything is transparent and accountable. This is important to ensure that businesses can plan properly, accurately and so on.
If investment runs smoothly, the wheels of the economy can move faster so that the state can collect taxes. The proceeds from taxes are then used for the benefit of the people.
With this line of thought, we should look at the Job Creation Bill as an effort to build a foundation for the nation\'s future. It is not merely a legal instrument to answer today\'s challenges.
However, the Job Creation Bill is only the first step in a long journey. Whatever the purpose of the law, it all depends on the ministers and local governments to issue directive rulings to support its implementation. Government officials play a key role in its implementation because they are in charge of day-to-day activities. To prevent irregularities from occurring, law enforcement officials must also be proactive in guarding it.
According to the World Bank, our economic status was upgraded to an “upper-middle-income” country from “lower-middle-income” because our per capita income had reached $4,050 per year. The per capita income threshold for countries to have upper-middle income status is $4,046 per year. As a result of the pandemic, we could fall back into lower-middle income status because the difference is only $4.
In Southeast Asia, Indonesia has already been left behind by Singapore, Thailand and Malaysia. Vietnam, Cambodia and Laos can match our position or are even ahead of us. Therefore, there must be a spectacular breakthrough carried out by the government so that we can avoid stagnation.
We cannot close our eyes to the fact that our country has become a jungle of chaotic rules and complicated bureaucracy. Due to this unconducive investment climate, many investors have given up on doing business in Indonesia. Everything will end in uncertainty, and the biggest enemy of business is uncertainty.
The main motive and purpose for the implementation of the omnibus law is to unravel the chaos so that the jungle can be addressed and lengthy bureaucratic procedures can be trimmed to bring certainty. Red tape and corruption can easily be monitored and stopped. Currently, one of the most important things in our country at present is to fix overlapping regulations, including national regulations in the form of laws, government regulations, presidential regulations (perpres) and regional regulations.
If there is no spectacular breakthrough, what will we do with the addition of the three million job seekers a year, including a million fresh graduates from 4,500 universities in the country? Where will fresh graduates work if we don\'t make a breakthrough to ensure a significant economic growth to accommodate them.
In a very simple formula, one of the main factors in turning the wheels of the economy is to encourage investment, boost exports and increase consumption.
If this is well maintained, we can prevent or minimize layoffs. However, this formula is very difficult to implement if the chaotic rules and bureaucracy are not fixed immediately.
In responding to the Job Creation Bill, we should not draw a demarcation line between employers (company owners) and workers. They are complementary and need each other. Therefore, the government must maintain a balance between the two components. It must not benefit only one party. Companies will not be able to operate if there is no workforce. But, the workforce will be meaningless if there are no jobs that can accommodate them.
Especially related to the issue of severance pay, which has been heavily highlighted, we need to be more contemplative. In the old law, it was stated that laid off workers would receive severance pay up to 32 times their monthly salary, depending on the particular employee’s tenure. In the Job Creation Bill, the amount of severance pay is set at maximum of 25 times the monthly salary.
In fact, the 25-monthly salary severance pay is a rational number to avoid layoffs. If we use all our effort to ensure there are no layoffs, we no longer need to question the differences in the amount of the severance pay. If our nation\'s economy runs well, entrepreneurs can do business well. Both are mutually beneficial. There is no need for an agenda of layoffs because employers and workers depend on one another.
If the investment flows, economic growth will naturally occur. And when investment goes well, there will be healthy competition to find workers. The workers will then have a greater chance to seek better pay because the labor is needed. This situation has happened in China and Vietnam so that their economies have become stronger and bigger. However, if there is no investment, everything will be difficult.
What we need at present is a regulation on the national minimum wage that can be used as the basis for the regions, both at the provincial and district or city levels. With this national reference, the disparities in minimum wages in the regions will not be too wide. So far, the method of calculating the minimum wage in a region is based on the inflation rate and economic growth in the area.
Whatever our position in responding to the Job Creation Law, what is certain is that reactions that are expressed in a violent manner will instead further marginalize the position of workers, our children, students and people in general because it will certainly affect investment in particular. The decline in investment will hinder economic growth. Anarchistic demonstrations, which destroy public facilities that have a direct impact on investment and economic growth, can also harm our future. We all intend to improve people\'s welfare. Violence and destruction can divert our goals from reality.
M Jusuf Kalla, Vice President from 2004 to 2009 and from 2014 to 2019.