According to newspaper reports, debt-ridden cities and counties nationwide will spend large sums of money on New Year’s Eve galas. Minister of Finance Chang Sheng-ford (張盛和) has said such galas can be held — in a moderate fashion — but should not include fireworks or expensive performances, as he believes it contradictory for local governments to claim poverty on the one hand, while spending lots of money on such events.
This debate is somewhat similar to the two economic directions being followed in Europe: austerity or expansionary policy. Those following a policy of austerity had better refrain from lavish New Year’s Eve galas. However, the government must take an overall view of the situation. If investments exceeds returns, it would be better to refrain from the investment at hand. On the other hand, if the benefits are greater than the investment, the investment would of course be worthwhile.
New Year’s Eve galas may be expensive, but if the total income brought in by tourists and advertisements is greater than the expenditure, they would still be worthwhile. There may also be intangible benefits, such as making people feel happy and bringing them closer together.
Let us use the reforms to the retirement system for retired civil servants, military personnel and public school teachers as an example. The system under which those who were 50 years old and who had worked for 25 years could apply for their full pension payments was replaced by the current system whereby they have to be 55 years old and have worked for 30 years before they can apply for full pensions. Now there is a proposal that this system should be changed to 70 years old and 25 years respectively.
These changes may seem to save a lot of money because retirees will receive their full pension benefits for a shorter period of time. However, if these people do not retire, then they keep receiving their salaries, which are higher than the monthly pension payments. In addition, they are also occupying positions and blocking young people from taking over. As they get older their productivity drops. From this perspective, this system loses the government money.
The worst attitude a government organization can have is the view that the more you do, the more likely you are to make mistakes and that the less you do, the less there is that can go wrong. If these galas are not staged, many civil servants will probably give out huge sighs of relief. The legislature is now reviewing and streamlining the budget, but its is a safe bet that while many organizations may appear upset about budget cuts, they are in fact be happy, because they can just sit back and relax.
This means that no general decision can be made as to whether large sums of money should be spent on such events. The government must instead look at the tangible income and the intangible results such events might bring. With the exception of a minority of places, Taiwan is well served by transport, so there is no need to invite big stars to every city and county. Instead, there should be a coordinated effort so that one gala each is held in northern, central, southern and eastern Taiwan. We live in the age of the Internet and so should be able to provide live Internet broadcasts of these events so that people can view them on their cellphones, tablets and computers instead of traveling to such an event.
The most important thing is to plan expenditures. The saying “garbage in, garbage out” comes to mind here. Without appropriate spending plans, entering garbage will always output garbage, not gold. This is as true for New Year’s Eve galas as it is for other government plans.
Chang Ruay-shiung is president of the Taiwan Hospitality & Tourism College.
Translated by Drew Cameron