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EDITORIAL: Government
trashes its reputation
The government’s commodity price stabilization task force and Fair Trade
Commission are trash. According to recent media reports, these two government
bodies, which are tasked with tackling rising consumer prices, can both be
discarded, precisely because they are virtually useless.
News that prices of freshly brewed coffee in Taiwan have risen by as much as 20
percent since the beginning of this year — in contrast to the price of coffee
beans, which has dropped 22 percent over the same period — comes as little
surprise. It is no wonder that people have found the news hard to swallow as
they consider companies’ pricing calculations.
Meanwhile, wheat prices have fallen by as much as 11.4 percent this year on
global markets because of the weakening world economy, but bread prices in
Taiwan have failed to reflect the drop in costs. In fact, bread prices have
increased by up to 22.2 percent. There have also been news reports highlighting
that breakfasts served by local food vendors are increasingly being made with
reduced portions of key ingredients, despite carrying the same price tag.
People have questioned whether costs are rising as much as companies are
claiming and have accused food retailers of taking advantage of recent fuel
price hikes and an impending electricity rate increase as an excuse to boost
their revenues.
Lawmakers demanded that the government’s price stabilization task force conduct
an investigation and ordered the Fair Trade Commission to check if basic
commodity wholesalers were engaging in monopolistic practices, but guess what —
the task force has said it needs time to understand the situation while the
commission has said there are no regulations in the Fair Trade Act (公平交易法)
allowing them to demand that retailers lower their prices.
To refute public criticism of its negligence of duty, the commission said in a
statement on Friday that the Fair Trade Act was designed to regulate
“restrictive competition practices.” The commission says its role is to ensure
effective operation of market functions and added that it fined local businesses
NT$500 million between August 2007 and May 6 of this year for activities that
artificially manipulated the market.
All that aside, the commission has said that — based on the results of its
latest round of inspections into retail prices — it found no concerted action by
retailers to increase their prices.
Legally speaking, the commission’s explanation sounds reasonable. Unfortunately,
its conclusions do not match the perceptions of many people who are now calling
for a boycott of certain products to reflect their dissatisfaction with
retailers. The failure of government bodies to report events in a way that
tallies with public perceptions is just one of the many recent governmental
messages that indicate it is ignoring them. All this will have serious
implications for government accountability.
An example of how the public has demanded more meaningful economic data revolves
around the consumer price index (CPI). The government’s statistics bureau
recently reported the year-on-year growth in the CPI was 1.44 percent, but many
people have questioned that figure and have asked whether the CPI really is a
good measure of actual costs.
The accuracy of the CPI has a significant impact on the economy and is an
important reference point for payment agreements that are pegged to inflation.
Therefore, the government needs to look at the way it gathers its CPI
statistics, because people feel they are losing out and want the government to
adjust the key items it uses to calculate the figure.
A raft of recent policies have caused record levels of people to express
dissatisfaction with both President Ma Ying-jeou (馬英九) and the Cabinet, but if
people have reached the point where they no longer believe economic data and are
increasingly distrustful of both government and the law, then being labeled
trash will be the least of the government’s troubles.
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