|
Ma reforms are
nothing but hot air
By Lin Wan-i 林萬億
As protests against President Ma Ying-jeou (馬英九) unfolded on May 19 — the eve of
his second inauguration — Ma called an impromptu press conference where he
offered a review of the four key issues which he was dissatisfied with, after
four years in power.
The first point on his list was that there are too few new jobs: Only 350,000
have been created and the rate of unemployment stands at 4.17 percent, which is
too high. The average unemployment rate for Ma’s first four years in office was
4.9 percent, markedly different from the average of 4.43 percent during the
first term of former president Chen Shui-bian (陳水扁).
Second, average salary levels have not risen fast enough: Even though the
average salary went up by NT$1,500, this is out of step with the rate of
economic growth and any wage gains have been canceled out by rising consumer
prices. The consumer price index (CPI) rose by 1.26 percent, much higher than
the 0.19 percent increase seen during Chen’s first term. The rate of economic
growth which the Ma administration seems so proud of has averaged only 3.42
percent, higher than the 3.29 percent seen during Chen’s first term, although
not by much.
Third, wealth disparity remains doggedly high: The average income of Taiwan’s
top 20 percent was 6.19 times higher than that of the bottom 20 percent; this
figure contrasts with the factor of 6.04 during Chen’s first term.
Fourth, the government failed to communicate its policy plans: The government
says solid policies are not that easy to explain and that it is difficult to get
the public to understand what is behind them. This is simply delegating
responsibility for the failure to public relations departments. Ma should
concede that many of his policy decisions have been flawed and not try to get
officials to put a spin on them.
For example, four years ago the government proposed the 468 labor income tax
plan, which was to provide tax rebates for mid-to-lower-income families of four.
It flopped and was scrapped a year later. Next, the government came out with
local construction projects designed to stimulate domestic demand and shelled
out NT$58.3 billion (US$1.94 billion) together with consumer vouchers worth
NT$87 billion. Did it work? Nobody followed it up, although we can say it
definitely helped add to the national debt.
During the Democratic Progressive Party’s (DPP) eight years in government
(2001-2008), the central government’s debt stood at an average of 29.07 percent
of GDP. Over the past four years this figure has risen to 34.33 percent and at
the end of last year national debt stood at a total of NT$5.77 trillion, which
equates to around 41.5 percent of GDP. This exceeds the ceiling permitted in the
Public Debt Act (公共債務法) and does not even include the country’s NT$15 trillion
of concealed debt.
The government has spent vast sums of money on disaster prevention, which has
proved to be largely ineffectual, and has succeeded only in accumulating debt
that is to be passed on to future generations.
Then there was Ma’s “6-3-3” plan, which promised economic growth of 6 percent,
an unemployment rate of less than 3 percent and per capita income of more than
US$30,000 within his first term — a goal that everyone knew was unobtainable.
Ma has said: “The road to reform is forever uphill, is never an easy one to
follow, but for the sake of the future of our Republic of China [ROC] and for
Taiwan’s prospects, there are some reforms that simply cannot be delayed.” This
is enough to make people suspect that Ma has no idea where he is leading the
country. What exactly does he want to reform?
Four years ago, as soon as he took office, he set up a tax reform task force.
Within six months, that initiative was dead in the water.
Everyone knows the tax system is unfair. The opposition is also in favor of tax
reform. How can the failure of the recent tax on capital gains be solely down to
poor communication by former minster of finance Christina Liu (劉憶如)? The issue
is also about whether the reforms are the right answer to systemic problems.
Twelve-year national curriculum reforms have been treading water for the past
four years: What is happening?
The government wants 75 percent of the places in the 12-year compulsory school
program to be exempt from entrance exams. However, that number will not be
reached until 2014 and even then there will be competition over the allocation
of these places in cases where there are more applicants than available spaces.
The question then is whether the top schools will create more places. Schools
are currently engaged in intense debate over how to select students when there
are more applicants than there are entrance exam-exempt places. Eliminating the
problem of basic entrance exams has only thrown up a host of other problems.
Next up are reforms of the health insurance system: What of the
second-generation health insurance plans? Ma, as chairman of the Chinese
Nationalist Party (KMT), controls a majority in the national legislature and yet
he still cannot get his reforms passed.
Now he wants to add a 1 percent insurance premium to cover long-term healthcare.
Over the past four years there has been a lack of long-term healthcare
providers, service has not been evenly distributed and the government has cut
its budget and delayed payments, all of which has made life very difficult for
those struggling at the bottom. Is this what the government calls reform?
Collecting premiums from people as quickly as it can?
Ma claims fuel and electricity prices have to rise so that they more adequately
reflect actual costs. He froze these prices prior to the Jan. 4 election for the
sake of campaigning and interfered with market mechanisms. Surely the government
was aware that if the market had been allowed to set these prices there would
have been a lower risk of consumer prices mounting. However, as energy and fuel
prices rise, associated consumer prices are destined to rise too.
How can the government not have had measures in place, such as looking into the
efficiency of CPC Corp, Taiwan and Taiwan Power Co, or providing subsidies to
vulnerable groups, for example?
Amid all this Ma has the gall to turn around and demand that everyone tighten
their belts in these tough economic times. No wonder so many people are fed up
with his administration.
Lin Wan-i is a professor in the Department of Social Work at National Taiwan
University.
Translated by Paul Cooper
|
