Thu, Aug 21, 2003 - Page 2 News List

Executive Yuan aims to redistribute wealth

CASH IN HANDEconomic planning chief Ho Mei-yueh hopes to further reduce the gap between the rich and the poor after a significant reduction was announced last week

By Ko Shu-ling  /  STAFF REPORTER

The Executive Yuan yesterday unveiled measures designed to further narrow the gap between rich and poor.

The gap is usually measured by comparing the average incomes of the richest one-fifth of society with those of the poorest one fifth.

Last year the multiple was between 6.16 but the government hopes to reduce this to 6.05 this year.

Ho Mei-yueh (何美玥), chairwoman of the Cabinet's Council for Economic Planning and Development said that reduction of the gap by a factor of 0.11 can be accomplished if the economic growth rate can reach 3.06 percent, joblessness drops to 4.8 percent and social welfare expenses take up 3.8 percent of GDP as projected.

To that end, Ho said the government will continue to push several programs including the six-year national development project, the "Taiwan first" investment measure, NT$57.7 billion in public construction projects and NT$20 billion in public service programs.

Ho spoke yesterday morning during the weekly closed-door Cabinet meeting, in which she briefed Premier Yu Shyi-kun about the measure and the analysis report on the nation's wealth distribution made available by the Cabinet's Directorate General of Budget Accounting and Statistics last Saturday.

According to the report, the nation has a more equal distribution of wealth than South Korea, Singapore, Hong Kong and the US.

The wealthiest quintile of last year earned 6.16 times as much as the poorest quintile, down 0.2 from that of the previous year.

The report also indicated that the nation's Ginni coefficient -- the international standardized indicator of wealth distribution -- stood at 0.345 last year, down from 0.350 in 2001.

Lower coefficients means that the wealth of a nation is more evenly distributed. A score of 0.4 is defined as a very inequitable wealth distribution, possibly causing social instability, according to economists and sociologists.

Ho yesterday drew connections between the narrowing of the disparity between rich and poor last year and the increase of disposable household income.

"While the disposable household income of the wealthiest 20 percent increased by 0.8 percent, that of the poorest 20 percent increased by 4.5 percent," Ho said.

Five elements contributed to the outcome: a better economic climate, a decrease of disadvantaged families, an increase in low-level workers' wages, an increase in employment among low-income families and effective social welfare programs, she said.

The average disposable income last year was NT$876,000 per household, or NT$7,000 more than the previous year's NT$869,000.

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