Legislative elections and referendums: Business groups urge KMT to shift focus to economy

"Taiwan needs to quickly normalize its relations with China, which can provide an injection to the local economy."

Guy Wittich, chief executive officer of the European Chamber of Commerce Taipei

The nation's major business groups yesterday urged the Chinese Nationalist Party (KMT)-led legislature to shift its focus from the election campaign back to economic issues to ensure a viable investment environment for local businesses.

"We hope the new legislature will return to the fundamentals and take on the responsibility of accelerating the passage of economic initiatives that will facilitate a more business-friendly environment," said Luo Huai-jia (羅懷家), executive director of the Taiwan Electrical and Electronic Manufacturers' Association (電電公會).

Luo said his association expected the new legislature to soon review three major bills that would continue to provide tax incentives to the local electronics sector as well as the Foreign Trade Act (貿易法) before the Statute for Upgrading Industries (促進產業升級條例) expires in December next year.

Addressing these bills, he said, would promote sustainable economic growth for the nation and improve the research and development capabilities of manufacturing-based companies.

General Chamber of Commerce (全國商業總會) chairman Chang Ping-chao (張平沼) said that further cuts in business tax and individual income tax would greatly improve the nation's investment environment, making it more competitive within the region and helping to attract foreign businesses and talent.

Tax cuts, such as on the inheritance tax, would also help end capital flight to tax heavens and could even provide an incentive for investors to bring their assets back to Taiwan, Chang said.

Congratulating the KMT on its landslide victory, Chang said that if the party's two-thirds majority helped improve the new legislature's administrative efficiency, the results might not be a bad thing for the nation.

The results of the election also highlighted voter dissatisfaction with the DPP government's lackluster performance in propping up the local economy, said Guy Wittich, chief executive officer of the European Chamber of Commerce Taipei.

Voters not so much showed their support for the KMT, he said, but rather cast a vote of no confidence in the DPP's performance on the economic front.

Wittich urged the new legislature to focus on economic issues after little improvement had been made on domestic consumer confidence in the past eight years.

He also expressed concern over the nation's export-driven economic future, which would very likely be hit by the subprime mortgage-triggered economic slowdown in the US.

"What needs to be done is that Taiwan needs to quickly normalize its relations with China, which can provide an injection to the local economy," he said.

Wittich reiterated the chamber's calls for the local government's immediate implementation of direct cross-strait links and further relaxation of cross-strait business restrictions to ensure the nation's economic competitiveness.

The American Chamber of Commerce in Taipei would not comment on yesterday's election.

Roscher Lin (林秉彬), chairman of the National Association of Small and Medium Enterprises (中小企業協會), expressed his personal expectations for the elected legislators, regardless of which party they belonged to.

He said he hoped the next legislature would communicate with the private sector on a frequent basis before rushing to pass any economic initiatives that may add to the difficulty of doing businesses in Taiwan.

Lin also urged the newly elected legislature to stop boycotting the central government's budget bills or initiatives that could help improve people's livelihood or reinforce the nation's infrastructure, which he said can be detrimental to the nation's economy.

Lin said he believed the outgoing legislature's decision to force companies with more than 30 employees into implementing parental leave was hastily made and represented an added burden on small companies.

It is to be hoped, he said, that the new legislature will avoid repeating such hasty policymaking.