Tue, Jun 05, 2012 - Page 8 News List

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?

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