Council of Labor Affairs (CLA) Minister Jennifer Wang (王如玄) was forced into an embarrassing retraction yesterday when she announced that the interest rate for the labor insurance loan scheme will be lowered from the original 2.935 percent to 1.92 percent.
The loan scheme, designed to offer workers in dire financial straits loans of up to NT$100,000 based on their past record of paying labor insurance fees and several other conditions, has attracted attention this year from lawmakers and labor associations alike.
The CLA has been heavily criticized over its insistence the loan rate remain at certain levels, despite the economic downturn and low bank interest rates.
On Dec. 29, legislators passed an impromptu motion prohibiting the loan rate from exceeding 1.92 percent during the legislature’s Health, Environment and Labor Committee meeting. This was prompted by reports saying that housing loans offered to civil servants and teachers had an interest rate of only 1.92 percent, so it would be unfair to offer loans at a higher interest rate to struggling workers.
Wang made the new rate announcement at a press conference held by the Chinese Nationalist Party (KMT) at the Legislative Yuan. She was accompanied by Su Ler-ming (蘇樂明), general manager of the Land Bank of Taiwan, who said that the bank had agreed to make the adjustment in accordance with government policy.
In related news, the CLA reported that 143,000 people have applied for the loan so far this year, setting a record high in the six-year history of the loan. The total amount of loans applied for was NT$14.35 billion (US$45 million), also an all-time high in the history of the loan scheme.
Because of poor economic conditions nationwide, the CLA has also pushed back the deadline for taking loan applications from the original Dec. 31 to Jan. 20.
However, once the number of applicants reaches the limit of 200,000 people, the council will terminate the application period even if it’s before the Jan. 20 deadline.