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EDITORIAL:
Post-election, the floodgates open
Taiwan has had a tough few weeks, with doom and gloom dominating the news:
ractopamine-laced beef imports, government officials covering up an H5N2 avian
influenza outbreak, chicken culls in central and southern Taiwan, and now tests
revealing high levels of food additives in pork products.
With beef, chicken and pork off the menu, what is left that’s safe to eat?
Next up was this week’s news about price increases. The price of oil has been
increasing for six weeks in a row, utility bills are set to rise, university
fees look set to go up and now even the guaranteed health insurance premium that
legislators fought so hard for, and that former Department of Health minister
Yaung Chih-liang (楊志良) staked his government post on, is suddenly going to
change.
The new Cabinet has been beset by a barrage of political storms. The opposition
has chided it for presiding over these price rises, saying this is not a Cabinet
of peace and security, but “a government of price rises and a Cabinet of
insecurity.”
Before President Ma Ying-jeou’s (馬英九) second term has even started, Premier Sean
Chen’s honeymoon period is already over, with his popularity rating below 40
percent.
You could have seen all this coming. Before the election, Ma suppressed any
controversial policies that might prove unpopular with the electorate and dent
his chances of re-election. Far better, he thought, to sweep problematic issues
like the avian flu outbreak, US beef imports, and oil and utility price rises
under the carpet until after the election.
Taiwan Power Co says it is sitting on an aggregate loss of NT$117 billion
(US$3.96 billion) this year and if it does not increase prices it is looking at
further losses of more than NT$100 billion next year. If it comes to this, the
company will have incurred an aggregate loss of more than half its paid-in
capital of NT$330 billion. According to Article 211 of the Company Act (公司法) the
board of directors has to convene a meeting and report to shareholders should
such a scenario arise.
The article says: “Subject to the provisions set out in Article 282 of this Act,
in case the assets of a company is insufficient to set off its liabilities, the
board of directors shall apply to the court for pronouncement of its
bankruptcy.”
CPC Corp, Taiwan (CPC) is in the same boat. Last year it had an aggregate loss
of NT$36 billion, and if oil prices do not return to normal levels this year and
the company continues to apply its cut-price policy, it will see a further loss
of NT$60 billion. Given that CPC’s paid-in capital is NT$130 billion, it is set
to come up against the same problem with Article 211 next year.
Nobody wants to see prices rise. Each increase might just mean an extra NT$100
per bill, but if many bills rise by this amount it all adds up. One could always
try to tighten one’s belt and pull in the purse strings, but this just adds to
all the other misery that seems to have come to a head. Also, it is a bit rich
for politicians to come on all caring and considerate before the election,
shoring up the levee to hold back the threatened deluge, only to saunter off and
allow the flood to come crashing through when the election is over.
Voters are not unreasonable, they will understand so long as the government
provides figures and lets them weigh up the pros and cons. What we have had
instead is various government departments making announcements about policies
they have already decided, but for which they are unable to provide accurate and
reasonable figures.
The government bluffed before the election and it has bungled after it. First it
wanted our votes, now it wants our money, and the electorate cannot do anything
about it. All voters can do is wonder why they had not seen this coming before
they voted for the Chinese Nationalist Party (KMT) to stay in power.
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