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EDITORIAL :
Government mismanaged price hikes
President Ma Ying-jeou (馬英九) has all but served his first four-year term, during
which his administration earned a reputation for incompetence. That it
maintained peaceful relations across the Taiwan Strait allowed Ma to secure a
second term. Now the public is getting to see his true colors and they are not
liking what they see. The gasoline and electricity price hikes initiated by the
government are leading to increases in the prices of consumer goods and
consumers are, not unreasonably, concerned that everything is going up except
their wages. As the public suffers, so does Ma’s popularity rating, now down to
18.7 percent, with the Cabinet’s standing at 15 percent. Ma has already won his
second term, but according to a recent poll, 13 percent of those who voted for
him are regretting it, wishing they had voted for former Democratic Progressive
Party (DPP) presidential candidate Tsai Ing-wen (蔡英文) instead. This should be a
wake-up call for Ma and his government. For support ratings to tumble this low
for any leader or Cabinet in a democratic society is approaching the limit of
acceptability.
Ma’s response is that things being difficult now means things will be better in
the future. In that, he is wrong. The price increases we are seeing now are the
result of the government’s intentional concealment of inflationary pressures in
the past. Also, if prices are rising, there is nothing to say they will not
continue to do so, nor can one say that difficult times now are paving the way
for better times ahead. The government would have us think the price hikes
reflect the policy of the previous government of keeping prices suppressed, or
tell us that the DPP government had also increased prices. These are all excuses
delivered by an incompetent administration to conceal its own inadequacies. The
Chinese Nationalist Party (KMT) has been in power for four years and for it to
blame any policy mistakes on the previous administration is disingenuous. The
public has entrusted the KMT with the reins of government and part of the
responsibility of a government is to revise unsuitable or flawed policies. The
previous administration paid for its mistakes by losing political power.
The pain being felt by the public is, to some extent, due to international
factors such as the rising prices of raw materials, but the problem is
predominantly caused by government incompetence. Fuel prices rose 10 percent in
one go, the impact of which was felt both psychologically and also in the
knock-on effect on commodity prices. At the same time, the government announced
it would increase electricity rates, which added fuel to the fire. The price
hikes resulting from this double increase have been exponential.
The prices of vegetable oils, night market snacks, rice, bread and cakes have
all gone up. Electricity bills are not set to increase until the middle of next
month, but already manufacturers are saying they are unable to absorb the
corresponding rise in their costs and will have to pass these on to the
consumer. In the past, manufacturers had to think carefully before raising their
prices, but now that the government has set the ball rolling, it has given these
manufacturers a reason and excuse to follow suit.
In the past, the government would have monitored the prices of essential goods
and restricted any move to increase them if there were an increase in fuel
prices or public utility bills. Surely, the government should have known that by
allowing considerable increases in fuel prices, it would affect commodity
prices. Instead, it allowed the hikes without first implementing
price-stabilizing measures. The government agencies responsible for price
stability have been caught dozing and they have not done a thing.
Given the resultant inflationary pressure, the government really should have
taken a more intelligent, skillful, hands-on approach, rather than the clumsy,
myopic, uncoordinated response it has shown. Ma should not think winning a
second term means the pressure is off. The very least he could do is stand up
and account for what is going on.
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