Mon, May 15, 2017 - Page 6 News List

The Liberty Times Editorial: Government should fix bad policies

As President Tsai Ing-wen (蔡英文) nears the first anniversary of her presidency, the public continues to be displeased with her performance. While the president’s approval ratings remain low, the Cabinet is even further from meeting public expectations.

Despite the Tsai administration’s NT$882.49 billion (US$29.22 billion) Forward-looking Infrastructure Development Program, modeled on US President Donald Trump’s US$1 trillion infrastructure plan, and its consistent efforts to push for pension reform, it has received little praise and been unable to turn the tide of public opinion.

A look at the Tsai government’s major policies should reveal how the Democratic Progressive Party, now in complete control of the executive and legislative branches, could run into a brick wall so soon after its sweeping victories in last year’s presidential and legislative elections.

The administration’s first major policy was the five-day workweek system. Before the implementation of the policy, 30 percent of Taiwan’s workers did not have two regular days off every week. It made sense to implement a five-day workweek by revising the Labor Standards Act (勞動基準法).

However, lacking sufficient knowledge of the practical effects, the government decided on a version of the law that was highly idealistic and put great pressure on employers.

The new law, which divides rest days into fixed days off and flexible days off, stipulates that all employees must take at least one day off during any given seven day-period. In addition, overtime pay was also sharply increased and the same rules applied to all industries, without exception.

Industries around the world are going through fundamental changes as big data, artificial intelligence, automation and other technologies proliferate. The Tsai administration has emphasized the need to develop the “five plus two” innovative industries — an “Asian Silicon Valley,” “intelligent” machinery, “green” energy, biomedicine and national defense — in addition to setting up a new agricultural business model and a circular economy.

However, it has continued to cling to a labor law mainly designed for labor-intense manufacturing industries, causing Internet-related industries and businesses that are heavily dependent on mental work to be bound by unnecessary restrictions.

Taiwanese industry consists primarily of the export and service industries, which typically have high personnel costs and experience seasonal fluctuations in demand. Reduced flexibility in personnel management under the new rules has significantly increased costs for such companies.

Big corporations might be able to adjust to changes brought by the new labor law, but small companies might not even be able to survive. Increased costs have also caused consumer prices to rise, making life even more difficult for the general public.

Meanwhile, tighter rules on overtime hours and higher overtime pay have only increased stress for employers and made employees unable to work as much as they want to increase their earnings. In other words, the result is a situation where employers, employees and consumers all lose.

Another policy that has received a lot of criticism is the government’s tax reform plans. Increased globalization and freer flow of capital has led to a trend among nations of lowering tax rates to attract investors. One good example of this is the tax cuts proposed by Trump.

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