The government announced yesterday that it will roll out consummer vouchers valued at NT$3,600 to every citizen by taking out loans equaling NT$82.9 billion (US$2.5 billion) to produce 0.64 percent economic growth for the country next year.
“In view of the impact of the global financial crisis, which continues to grow and might last for quite a while, along with declining consumption, the Executive Yuan has decided to issue consummer vouchers to invigorate the economy,” Premier Liu Chao-shiuan (劉兆玄) told a press conference yesterday afternoon.
Under the plan, by Lunar New Year on Jan. 24 each citizen can receive vouchers worth a total of NT$3,600 from his or her household registration office by showing documents that prove citizenship.
PHOTO: CHIEN JUNG-FONG, TAIPEI TIMES
The expiration date of the vouchers will be Dec. 31 next year, while the face amount of each voucher note has yet to be determined.
Liu said that the program did not exclude the wealthy because it is designed to “stimulate more consumption to get the economy going” and “not to provide social assistance.”
“Wealthy people or people who are not in need of the vouchers can get a tax break by donating the vouchers to charities,” Liu said.
The government expected to see an increase of 0.64 percent in next year’s GDP based on the assumption that all the vouchers are used to purchase goods and services and are not converted to cash and deposited in bank accounts.
Council for Economic Planning and Development Chairman Chen Tian-jy (陳添枝), also present at the press conference, said the consummer vouchers were confined to legally registered businesses.
Chen said businesses would be required to write down each voucher number on the corresponding invoice or receipt so that the government could check whether the voucher had been used for goods and services and not for acquiring cash.
The government will write a special law for the program as borrowing the funds will conflict with Article 23 of the Budget Law (預算法), which states that funds raised by loans must be used in capital investments and Article 4 of the Public Debt Act (公共債務法), which places a debt ceiling on loans.
“We need a special statute to issue the consummer vouchers so that we can bypass Article 23 of the Budget Law and article 4 of the Public Debt Act,” Chen said.
Asked how the government measured the burden of the loan that future generations will need to bear because of the move, Liu said that the priority of the government was to rejuvinate the economy.
“It’s a difficult time. Issuing purchase vouchers and other similar measures have been adopted in other countries. These measures would not be used in normal circumstances. If we could sail through this economic depression, it would be easier for the government to deal with other problems. If we do not do this [issue the vouchers], there will be even harsher consequences,” Liu said.
Liu said the government was also planning to take out loans to increase investment in public works and to boost industries, with details to be finalized in the coming weeks.
At a separate setting yesterday, Legislative Speaker Wang Jin-pyng (王金平) said he hoped the vouchers could be distributed to people before the Lunar New Year. But he said it might take a while for the legislature to pass the special bill proposed by the Cabinet to legitimize the policy.
Nevertheless, Wang urged the Executive Yuan to show the government’s determination in executing the policy now that it had proposed the plan to boost the economy.
Chinese Nationalist Party (KMT) caucus deputy secretary-general Lo Shu-lei (羅淑蕾) yesterday vowed full cooperation in pushing through the special legislation as soon as possible, adding that the Cabinet’s policy could serve as an incentive to boost public consumption.
Lo said the government had no alternative but to boost the economy through loans, adding that other nations had taken similar measures to revive their economies.
KMT Legislator Lai Shyh-bao (賴士葆), a member of the legislature’s Finance Committee, said the government’s plan could ensure individual equality as the vouchers would be granted on an individual basis instead of a household basis.
Voicing its opposition however, the Democratic Progressive Party (DPP) caucus yesterday said the government’s allocation of a special budget to fund the vouchers would incur unnecessary debt.
Legislator Tsai Huang-liang (蔡煌瑯) told a press conference that “people should know that when a person receives NT$3,600 in coupons, the next generation will have NT$3,600 in debt.”
The KMT administration has already allocated NT$300 billion to source its 12 major construction projects in debt financing, and it proposed an NT$82.9 billion budget for the coupon plan, so the government will have around NT$400 billion in debt financing only six months in office, Tsai said.
The government allocated a special budget to avoid the public debt limit regulation, but the expanding debt financing might bankrupt the country or leave hung debts to the next generation, he said.
DPP Legislator Yeh Yi-ching (葉宜津) said that a tax refund or cash subsidy would be a better way to stimulate consumer spending.
The DPP caucus proposed a tax refund bill to the legislature in June, however the KMT caucus refused to review the bill.
Also See: EDITORIAL: Coupons and policy on the run、More stimulus needed: analysts
FIREPOWER: On top of the torpedoes, the military would procure Kestrel II anti-tank weapons systems to replace aging license-produced M72 LAW launchers Taiwan is to receive US-made Mark 48 torpedoes and training simulators over the next three years, following delays that hampered the navy’s operational readiness, the Ministry of National Defense’s latest budget proposal showed. The navy next year would acquire four training simulator systems for the torpedoes and take receipt of 14 torpedoes in 2027 and 10 torpedoes in 2028, the ministry said in its budget for the next fiscal year. The torpedoes would almost certainly be utilized in the navy’s two upgraded Chien Lung-class submarines and the indigenously developed Hai Kun, should the attack sub successfully reach operational status. US President Donald Trump
TPP RALLY: The clashes occurred near the Chiang Kai-shek Memorial Hall on Saturday at a rally to mark the anniversary of a raid on former TPP chairman Ko Wen-je People who clashed with police at a Taiwan People’s Party (TPP) rally in Taipei on Saturday would be referred to prosecutors for investigation, said the Ministry of the Interior, which oversees the National Police Agency. Taipei police had collected evidence of obstruction of public officials and coercion by “disorderly” demonstrators, as well as contraventions of the Assembly and Parade Act (集會遊行法), the ministry said in a statement on Sunday. It added that amid the “severe pushing and jostling” by some demonstrators, eight police officers were injured, including one who was sent to hospital after losing consciousness, allegedly due to heat stroke. The Taipei
NO LIVERPOOL TRIP: Taiwan’s Lin Yu-ting, who won a gold medal in the boxing at the Paris Olympics, was embroiled in controversy about her gender at that event Taiwanese boxer Lin Yu-ting (林郁婷) will not attend this year’s World Boxing Championships in Liverpool, England, due to a lack of response regarding her sex tests from the organizer, World Boxing. The national boxing association on Monday said that it had submitted all required tests to World Boxing, but had not received a response as of Monday, the departure day for the championships. It said the decision for Lin to skip the championships was made to protect its athletes, ensuring they would not travel to the UK without a guarantee of participation. Lin, who won a gold medal in the women’s 57kg boxing
The US has revoked Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) authorization to freely ship essential gear to its main Chinese chipmaking base, potentially curtailing its production capabilities at that older-generation facility. American officials recently informed TSMC of their decision to end the Taiwanese chipmaker’s so-called validated end user (VEU) status for its Nanjing site. The action mirrors steps the US took to revoke VEU designations for China facilities owned by Samsung Electronics Co and SK Hynix Inc. The waivers are set to expire in about four months. “TSMC has received notification from the US Government that our VEU authorization for TSMC Nanjing
RSS