Wed, Jun 26, 2013 - Page 8 News List

State: Stop cooking up half-baked policies

By Kuo Chen-hero 郭振鶴

When looking at many of the major policies the government has come up with recently, there seems to be one overriding principle behind all of them: “Put the policy out first, then put it right later.”

The public is increasingly feeling exasperated, if not downright incensed, by the half-baked policies the government keeps churning out.

If it is not problems with the 12-year education plan, the capital gains tax on securities transactions or the luxury tax on property, then it is issues with the Cabinet’s 13-point economic stimulus package announced at the end of last month. What these policies have in common is that the government has thrust them out half-formed in the hopes that they can tweak them later.

In the 12-year education plan, the annual household income threshold to determine eligibility for free high-school tuition keeps being changed, while the policy on exam-free admission quotas has left parents and students utterly confused.

Regarding the capital gains tax, the government is making a U-turn and trying to drop the original 8,500-point threshold that triggers the imposition of the tax, but this has not had the intended effect of boosting the TAIEX, which has recently struggled to break 8,000 points. This is because the government has failed to address the fundamental and structural problems of the economy.

Then there was the luxury real-estate tax, which was designed to curb rising property prices and speculation, but which has had little stabilizing effect. The Ministry of Finance is now resolving to revise the tax instead of just scrapping it, with a draft amendment to the tax expected to be proposed in the legislature in September.

Last of all, there is the stimulus plan announced by the Cabinet at the end of last month. At a press conference, the Cabinet unveiled the 13-point economic stimulus package to much fanfare from some, but also to serious doubts from many others that it would have any real impact on the economy. Sure enough, an official has recently come out saying that several points in the plan need to be changed.

When drafting and pursuing government policy, government officials should be thinking about the short, mid and long-term effect that it would have, to create comprehensive legislation based upon improving people’s well-being and promoting national development.

This “put it out first, put it right later” approach is unacceptable and creates suspicion that the government is only trying to placate the public and muddle through its policymaking. It also makes people think the government is wasting state resources because of its preoccupation with rushing policies through and fixing them when they do not work as hoped, with the constant changes having civil servants throughout the government apparatus running about in circles effecting the revisions.

Just like all the unfinished construction projects around the nation that now serve as little more than mosquito breeding grounds, the policies have been executed without the necessary planning and using inaccurate estimates in the hope that they will come out right in the end.

Creating government policy is much like entering variables in economic formulas: The policy is the outcome of entering variables that are calculated using a process involving effectiveness, efficiency, correlations and trends. If the wrong variables are entered, the result will be bad policy that, if implemented, will lead only to the wasting of time and resources to tweak and correct the inputs of the policy and its orientation.

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