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Subsidies for ‘near poor’ near reality

The government will grant monthly subsidies from September to January to about 450,000 families at risk of falling into poverty because of recent hikes in commodity prices, Minister Without Portfolio Chu Yun-peng (朱雲鵬) said yesterday.

“The rise in the price of oil and inflation have led some people to sink below the poverty line and with the electricity price increase [effective today] the government has to come up with some way to help them,” Chu said.

Minister Without Portfolio Tsai Hsun-hsiung (蔡勳雄) said that the new subsidy proposal was aimed at “near poor” people because people living under the poverty line are already within the scope of the government’s social subsidy scheme.

“‘Near poor’ people are more susceptible to financial pressure brought by increases in fuel and electricity prices. The government must take care of them,” Tsai said.

Following the first petroleum price increase in six months on May 28, the price is expected to increase again today as the government determines the oil price based on the floating fuel price system on the first of the month.

A 12.6 percent increase in electricity prices begins today and another 12.6 percent electricity price increase will take effect on Oct.1.

The subsidy proposal was drafted on Sunday by a Cabinet-level task force created to care for economically disadvantaged people hit by new financial woes.

Later yesterday, Minister of the Interior Liao Liao-yi (廖了以) said families whose annual income is below NT$300,000 would qualify for the payments.

The amount of the monthly subsidy for each family depends on each applicant’s monthly salary and is calculated by subtracting the salary from NT$25,000, Liao said, adding that the ministry defines NT$25,000 as the minimum amount needed to support a family

For example, if the applicant’s monthly wage is the only source of a family’s income and is NT$17,280 — the national minimum wage — the applicant’s family would receive NT$7,820, Liao said.

Liao said that only employed people would qualify to receive the subsidy as the government wants to encourage people to join the labor market.

The government is expected to earmark NT$13.5 billion (US$444.6 million) for the proposal, pending legislative approval.



Meanwhile, the Directorate General of Highways (DGH) announced yesterday that starting today, large trucks and tour buses will be exempt from paying fuel tax for the next six months.

The DGH said that the measure, which will expire at the end of this year, will allow operators to save approximately NT$10,000 per vehicle, comparable to the subsidies granted large passenger buses and taxis.

The DGH estimates that fuel tax revenue will decrease by NT$1.5 billion (US$60 million) once the policy is implemented.

The announcement came after truck and tour bus driver unions asked the government for financial assistance.

In related news, Premier Liu Chao-shiuan (劉兆玄) last night defended the need to raise the prices of oil and electricity during an interview with CtiTV.

“The government needs to persevere with what it is supposed to do for its long-term policy goals,” Liu said.

Liu said that the recent hike in fuel prices had resulted in a four percent decline in gasoline consumption and a seven percent decline in diesel consumption compared with the same period last year.

“Oil is a resource we don’t have. As a country that imports 99 percent of its energy, we can’t afford to consume energy as we did before,” Liu said.

Starting today, electricity prices will increase by 12.6 percent.

Despite the increase in electricity price, the public can get discounts and pay less if the electricity they consume this year is less than during the same period last year, Liu said.
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