Sun, Dec 28, 2008 - Page 8 News List

KMT offers more debt, not hope

By Frank hsieh 謝長廷

On Tuesday, the Taiwan Confederation of Trade Unions (TCTU) organized a demonstration at the Council of Labor Affairs to protest against companies forcing workers to take unpaid leave, a practice that the TCTU says violates labor laws.

The demonstration is over, but the economic downturn continues. Although the economic crisis is global, President Ma Ying-jeou (馬英九) and his administration have prolonged the crisis and made it more difficult to end the economic downturn domestically by employing hardline, centralized policies.

With the domestic unemployment rate reaching 4.64 percent last month, we must wonder whether Ma’s economic policies will increase employment.

The reality is that capitalists have a certain amount of political influence, and that could easily restrict the direction of national policy.

When the government bails out capitalists with its limited financial resources and hands out consumer vouchers with clear overtones of vote-buying, this takes resources from national relief funds for education, cultural and social activities and environmental protection, making these sectors the biggest losers in the economic downturn.

In addition to providing financial assistance to capitalists, the government will issue consumer vouchers for every citizen and has mapped out plans to save the property and stock markets.

Where will all this money come from? Will the public have to shoulder the financial burden or will the government impose higher taxes on the companies that benefit from the bailout?

The first answer that comes to mind is, of course, tax hikes.

But the legislature has never managed to pass a bill to raise taxes, except for the alternative minimum tax bill proposed by the Democratic Progressive Party (DPP) in 2005, which required every rich person and profitable enterprise to pay a certain amount in taxes, leading to an annual increase of nearly NT$20 billion (US$606 million) in tax revenues.

All other tax bills proposed relaxing the requirements for tax exemptions or breaks.

If the total of available resources doesn’t increase, it is impossible to increase social welfare spending. Where is the government supposed to find the extra resources?

Since it is difficult to impose higher taxes on companies, the government will have to take on debt, but this burden will be shared by the public and is unfair to future generations. We must keep in mind that 70 percent of tax revenues come from wage earners.

It is most irresponsible for the government to expand its debts — especially unproductive, non-capital debts, of which the consumer vouchers are a prime example.

This scheme would have been voted down in many countries because it is politically, not economically, motivated.

If the government had used the nearly NT$90 billion designated for the consumer voucher plan to hire 300,000 people at a monthly salary of NT$30,000 a year, the unemployment rate would decrease, which would stimulate consumer spending.

Now the biggest problem is that the public suffering from the economic meltdown sees no hope.

What does national vision mean? It means that the government should protect public welfare and property and establish a beautiful, clean, sustainable, just and fair living environment, in which lives are respected and talent is fostered.

The global financial turmoil has adversely affected the nation’s economy and many suffer from unemployment and rising commodity prices. But is there hope? We don’t expect the government to realize this vision in four or eight years, but at least it should lead us toward this vision and happiness.

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