Wed, Apr 18, 2012 - Page 8 News List

EDITORIAL : Government mismanaged price hikes

President Ma Ying-jeou (馬英九) has all but served his first four-year term, during which his administration earned a reputation for incompetence. That it maintained peaceful relations across the Taiwan Strait allowed Ma to secure a second term. Now the public is getting to see his true colors and they are not liking what they see. The gasoline and electricity price hikes initiated by the government are leading to increases in the prices of consumer goods and consumers are, not unreasonably, concerned that everything is going up except their wages. As the public suffers, so does Ma’s popularity rating, now down to 18.7 percent, with the Cabinet’s standing at 15 percent. Ma has already won his second term, but according to a recent poll, 13 percent of those who voted for him are regretting it, wishing they had voted for former Democratic Progressive Party (DPP) presidential candidate Tsai Ing-wen (蔡英文) instead. This should be a wake-up call for Ma and his government. For support ratings to tumble this low for any leader or Cabinet in a democratic society is approaching the limit of acceptability.

Ma’s response is that things being difficult now means things will be better in the future. In that, he is wrong. The price increases we are seeing now are the result of the government’s intentional concealment of inflationary pressures in the past. Also, if prices are rising, there is nothing to say they will not continue to do so, nor can one say that difficult times now are paving the way for better times ahead. The government would have us think the price hikes reflect the policy of the previous government of keeping prices suppressed, or tell us that the DPP government had also increased prices. These are all excuses delivered by an incompetent administration to conceal its own inadequacies. The Chinese Nationalist Party (KMT) has been in power for four years and for it to blame any policy mistakes on the previous administration is disingenuous. The public has entrusted the KMT with the reins of government and part of the responsibility of a government is to revise unsuitable or flawed policies. The previous administration paid for its mistakes by losing political power.

The pain being felt by the public is, to some extent, due to international factors such as the rising prices of raw materials, but the problem is predominantly caused by government incompetence. Fuel prices rose 10 percent in one go, the impact of which was felt both psychologically and also in the knock-on effect on commodity prices. At the same time, the government announced it would increase electricity rates, which added fuel to the fire. The price hikes resulting from this double increase have been exponential.

The prices of vegetable oils, night market snacks, rice, bread and cakes have all gone up. Electricity bills are not set to increase until the middle of next month, but already manufacturers are saying they are unable to absorb the corresponding rise in their costs and will have to pass these on to the consumer. In the past, manufacturers had to think carefully before raising their prices, but now that the government has set the ball rolling, it has given these manufacturers a reason and excuse to follow suit.

In the past, the government would have monitored the prices of essential goods and restricted any move to increase them if there were an increase in fuel prices or public utility bills. Surely, the government should have known that by allowing considerable increases in fuel prices, it would affect commodity prices. Instead, it allowed the hikes without first implementing price-stabilizing measures. The government agencies responsible for price stability have been caught dozing and they have not done a thing.

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