All governments need to win the support of the public and to take actions that benefit both the public and the nation. They cannot just sit around chanting slogans. This is especially true for a government that has just been re-elected. It needs to take concrete action and produce concrete results to convince people of its legitimacy.
During his first term in office, President Ma Ying-jeou (馬英九) made a bunch of promises, most of which he failed to deliver on. He also showed that he was incapable of reviving the economy and lacks drive when it comes to eradicating corruption. After accomplishing nothing for four years, how are we supposed to believe he is serious about reforms that are supposed to bring about fairness and justice?
Furthermore, given the impact on the economy caused by the European sovereign debt crisis and the way the world economy is freezing up, the government should do what it can to help the public get through the tough times. However, the Ma administration does not understand the hard time people are having and is instead pushing ahead with increases in fuel and electricity prices as well as a capital gains tax — all in the name of reform. These moves have angered the public and the government has lost their trust. At the same time, Ma has become the first president in Taiwan to have a popularity rating as low as 15 percent.
So why are Ma’s “reforms” so bad? There are three main reasons: First, while these reforms have all been given fancy-sounding names, they are in fact all just for show. Second, these reforms ignore the bigger picture of Taiwan’s already poor economy and overestimate the public’s ability to cope financially. Third, the reforms are technically unsound and ignore the real day-to-day difficulties the public is facing.
Put simply, Ma’s reforms are a mere front and out of touch with the times and the law.
The “reforms” Ma is harping on about are not real reforms. They are only aimed at encouraging reform in others; Ma has done nothing when it comes to reforms that affect his party or his interests. Take the Chinese Nationalist Party’s (KMT) assets as an example. These assets came from what Japan left in Taiwan after World War II and from the massive profits the party made from its monopolization of the market for so many of the early years of its rule over the nation. After democratization was completed, these assets should have been returned to the public and put into the national treasury. However, senior members of the KMT are not willing to let go of their own vested interests, including an unwillingness to push for anti-corruption moves.
Despite all his promises about handling KMT party assets, Ma has shown that he is unwilling to let go of this bottomless barrel of gold that brings the party billions of dollars every year. Instead, he has used these assets as a campaign resource and to consolidate the party’s hold on power. By not addressing this issue, KMT leaders have shown themselves to be political con men who have lost all credibility in the eyes of the public. Given this, how are Ma and his government going to convince others to reform?
Throughout his first term in office, Ma failed to deliver on his “6-3-3” promise and real income has dropped to the levels of 14 years ago. Taiwan’s economy is also looking even weaker than last year and exports have dropped sharply as growth in China, the investment target of many Taiwanese companies, is slowing down. Even worse, surveys show that most people are not making enough to make ends meet while disadvantaged groups are having a hard time keeping up with even the most fundamental expenditures. That the government has been unable to help people through this adversity is a sign of incompetence and neglect of duty.
Even worse, the government is now pretending to carry out reform while actually making people’s lives even harder by increasing fuel and electricity prices, which will cause everything to go up in price.
In addition, the massive losses incurred by CPC Corp, Taiwan and Taiwan Power Co could be linked to inappropriate budget allocations, poor management and even illegal activities. There have been many reports about these problems and people are waiting for the Judicial Yuan and the Control Yuan to investigate. However, they have done nothing and Ma has made matters worse by hitting the public with price hikes.
When it comes to reform, both timing and method are important. While nobody would oppose the spirit behind the reintroduction of the capital gains tax — that anyone who makes money should be taxed — ignoring the overall economic environment and public hardship means reform could well be ineffectual. Frankly, there are practical problems involved in levying such a tax. When former minister of finance Shirley Kuo (郭婉容) first introduced the securities tax 24 years ago, the TAIEX dropped sharply for 19 consecutive days, and in the end the tax was scrapped after only one year when it had brought in just a few dozen billion in revenue.
There are many individual investors in the Taiwanese stock market and most of them are engaged in short-term trading. For them, declaring their securities income would be a major undertaking, and given that the Ministry of Finance forecasts that tax revenue may only be about NT$10 billion (US$338.5 million), the question is if such a tax makes economic sense.
In the past, a securities transaction tax has been used instead of a capital gains tax, with good results. The government collected hundreds of billions of NT dollars annually from the transaction tax, which is approximately 8 percent to 10 percent of annual fiscal revenue and very helpful to the nation’s finances. This form of revenue has been very steady for many years, so why does the government want to bring back a capital gains tax in the name of fairness when it will only cause turbulence and panic in the market?
Ma’s recent actions have greatly angered Taiwanese, but he is showing no signs of stopping. The reason for this is simple: The country’s leaders lack the ability to lead and do not know how to revive the economy. All they are good at is using big words like “reform” to make them look better and divert attention from their problems. They probably never thought that these reforms would backfire on them by almost destroying Taiwan’s economy and the government’s reputation.
The government’s policy decisions have put Taiwan in dire straits, making life almost unbearable for the average citizen.
Translated by Drew Cameron
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