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EDITORIAL: Government
must think before it talks
Government efficiency is crumbling, as seen in the poor level of communication
within and between government agencies. The Cabinet¡¦s recent lack of contact
with legislators as it sought to push a series of major policies through the
Chinese Nationalist Party (KMT)-dominated legislature ¡X including relaxing the
import ban on US beef containing residues of the leanness-enhancer ractopamine ¡X
shows its inability to communicate.
The fallout from this will paralyze the government, just at the time when the
country¡¦s flagging economy needs all the strength it can get.
On Friday, Minister of Finance Christina Liu (¼B¾Ð¦p) said she would not have been
in a hurry to push for the enactment of her capital gains tax on securities
transactions, had she known the Cabinet was planning to raise electricity rates
and abolish fuel subsidies at the same time.
Unbelievably, her tax proposals were finalized without thorough discussions
among government officials ¡X it only took two weeks for the Cabinet to
rubber-stamp Liu¡¦s proposal to place a 15 percent tax on securities transaction
gains.
Given that Liu is under heavy attack from all sides, it is understandable that
she would try to defend herself and her taxation proposal, in the name of
seeking a fairer tax system, but more importantly, her inappropriate comments
highlight the government¡¦s complete disarray ¡X from the formation of policy
through to the ratification of related rules and then the final enforcement.
The confusion over the government¡¦s fiscal plans before the implementation of a
capital gains tax, no matter which version is finally adopted, has helped send
the TAIEX to its lowest level since Jan. 3. At the same time there are
escalating worries that the Greeks may exit the eurozone, while Spain faces an
uncomfortable credit crunch.
The capital gains tax is not the sole issue which has plagued President Ma Ying-jeou¡¦s
(°¨^¤E) administration recently. The government¡¦s disorganization has been seen in
the way it has handled a series of issues, including economic talks with
Taiwan¡¦s major trading partners.
Council for Economic Planning and Development Minister, Yiin Chii-ming (¤¨±Ò»Ê)
recently opted to give his indirect advice to the government by posting an
article on the Web in which he urged stepping up talks with China on the opening
up of markets for key items, based on the Economic Cooperation Framework
Agreement (ECFA), alongside free-trade talks with China¡¦s trading partners.
In Yiin¡¦s mind, it seems to be a useful approach to shout openly at the Ministry
of Economic Affairs and related government agencies to force them to take the
issue seriously, rather than go through closed door, fruitless discussions.
Yiin sees deepening trade ties with China via the ECFA as an effective way to
fend off growing competition from Japan and South Korea, given that the two
countries are likely to wrap up free-trade agreements (FTA) with China within
next the next two years. These trade pacts will offset the benefits of the ECFA
for local companies, Yiin implied.
The FTAs could lessen exports by as much as 4 percent, or US$15.9 billion a
year, according to a forecast by the Chung-Hua Institution for Economic
Research.
The government has said that the signing of the ECFA will help Taiwan push for
more FTAs with its trade partners, but not a single trade pact has been signed
since the ECFA was inked two years ago.
All this comes with South Korea racking up trade agreements with the EU and the
US. Evidently, the Seoul government is much more efficient at pushing policies
that boost South Korea¡¦s competitiveness than Taipei is.
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