Premier Sean Chen yesterday bluntly rejected a proposal to issue consumer vouchers to help boost the economy, adding that a similar measure adopted by President Ma Ying-jeou’s (馬英九) administration in late 2008 at the height of the global financial downturn had left the government with less leeway to take out loans.
A recent decision by the premier to downsize the coverage of a year-end bonus for 432,000 retired government employees from the military, public sectors and schools and state-owned enterprises, in response to criticism about unfairness in the system, prompted discussions on how the NT$18.2 billion (US$621.5 million) fund should be used.
At a meeting of the Chinese Nationalist Party’s (KMT) Central Standing Committee on Thursday, some members suggested to Ma that his administration issue consumer voucher to each citizen, as it did in 2008, with some reportedly saying at the closed-door meeting that a consumer voucher worth NT$1,000 could get the economy running again.
“I never thought of issuing consumer vouchers with the money,” Chen said at a question-and-answer session at the legislature in response to several KMT lawmakers.
Fielding questions from KMT Legislator Lu Chia-chen (盧嘉辰), Chen said that the distribution of consumer vouchers helped elevate GDP growth rate “a bit” at the time, but it grew at the expense of the government’s ability to take out loans, which would otherwise allow it to do more things.
“Issuing consumer vouchers was a short-term measure. Before we decide to adopt any short-term measure, we should envisage the consequences,” Chen said.
According to an audit report on government expenditures for 2009, the distribution of NT$3,600 in consumer vouchers to each citizen, totaling NT$83.2 billion, boosted GDP growth by between 0.28 and 0.43 percentage points, less than 0.66 percent as the Council of Economic Planning and Development had initially predicted.
As long as the measures incorporated in the Cabinet’s “Economic Power-Up Plan,” which aims to resolve the root causes of the nation’s industrial problems and fiscal situation, are carried out thoroughly, GDP will grow naturally within one year, Chen said.