The Chinese National Federation of Industries (CNFI, 全國工業總會) yesterday urged the government to halt electricity rate hikes slated for next month, saying local businesses are already under strain from steep US tariffs and exchange rate volatility.
The Taipei-based group made the appeal as the electricity rate review committee prepares to meet later this month, with new rates set to take effect next month.
State-run Taiwan Power Co (Taipower, 台電) is struggling to stay afloat after legislators blocked the government’s proposed NT$100 billion (US$3.26 billion) subsidy program. Taipower has accumulated about NT$418 billion in losses due to surging fuel costs, pushing its debt-to-equity ratio to 92.8 percent as of July 31.
Photo: Liao Chia-ning, Taipei Times
The electricity rate review committee in March unexpectedly kept electricity rates unchanged as the government sought to contain economic uncertainty and maintain price stability amid tariff concerns. Still, electricity prices for industrial users have surged 66 percent over the past three years.
“Electricity prices should definitely not rise again. Any further hikes would place an additional financial burden on the public,” CNFI chairman Pan Chun-jung (潘俊榮) said on the sidelines of the group’s white paper release.
Pan urged the legislature to support the government’s subsidy program, saying it would strengthen Taiwan’s electricity resilience.
Energy policy is among the top concerns of CNFI members, with 52.4 percent expressing serious concern over the issue, the white paper said.
As the industrial sector accounts for 55 percent of the nation’s power consumption, the group called on the government to reassess its energy development policy within a 10-year timeframe to ensure a stable supply.
All options, including coal, natural gas, renewable energy and nuclear power, should remain on the table, it said.
The CNFI also said it supports raising the minimum wage in line with consumer price growth and a slowing economy, but stressed that increases must remain “bearable” for local businesses, Pan said.
While the US’ 20 percent tariff and stacking rates would have only a mild effect on the semiconductor and information and communications technology sectors, they would place a significant strain on the growth of small and medium-sized enterprises, they said.
Along with a strong New Taiwan dollar, the cost pressures have become “almost unbearable” for smaller firms and those in traditional industries, CNFI vice chairman Dennis Chen (陳進財) said, adding that the economy could face a slowdown if manufacturing activity continues to contract and more workers are placed on unpaid leave.
Government data showed that as of the end of last month, the number of furloughed workers had risen to 4,863, with more than 62 percent of companies citing the impact of US tariffs as the main reason.
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