The Chinese Nationalist Party (KMT) has been criticizing the government’s plan to give people electronic coupons to spur the economy after the COVID-19 pandemic abates, calling ad nauseam for the government to give people cash handouts.
Even former president Ma Ying-jeou (馬英九), of all people, yesterday urged President Tsai Ing-wen’s (蔡英文) administration to provide cash handouts, citing the NT$3,600 (US$119.52) “consumer vouchers” that his administration distributed in 2009 in the wake of the global financial crisis, which he said were “very popular.”
True, people were happy to receive the vouchers, but did they really work in terms of revitalizing the economy?
The Ma administration pushed national debt up by NT$85.8 billion by issuing the vouchers, which only generated NT$36.3 billion in GDP.
As of December 2009, the Council for Economic Planning and Development, the precursor of the National Development Council, said the vouchers only contributed approximately 0.4 percent GDP growth — much lower than the estimated 0.66 to 1 percent.
This was the result of a widespread substitution effect — nearly 70 percent of the goods purchased with the vouchers were consumables such as daily necessities.
A major difference between Ma’s vouchers and Su’s coupons is that the latter would utilize mobile payment methods and would only be redeemable when the value of products people have committed to purchase reaches a certain sum.
Minister of Economic Affairs Shen Jong-chin (沈榮津) has said that the electronic coupons, which would have a combined value of NT$3,000 and would cost the government about NT$10 billion, are expected to trigger purchases worth four times their value and bring stores NT$100 billion in profits.
Rather than squandering taxpayers’ money by just giving the public cash equivalents to spend, the coupons are already looking more promising in terms of leveraging consumption.
Another KMT argument against the government’s economic stimulus plan is that the US, Singapore and Hong Kong have all pledged to give their citizens cash.
However, the government has reiterated its stance against giving out cash indiscriminately, saying that wealthy people do not need the money, and its many subsidy programs for sectors that have been hard hit by the pandemic all involve cash payments.
Yet despite the government’s repeated explanations of its bailout policies, the KMT appears deaf, as the party continues to call for cash handouts.
It is important that people not be tricked by the KMT’s deliberate obtuseness. Since it lost the presidency and a legislative majority four years ago, it has become a master of creating conflict and pitting personal interests against the public interest.
The KMT, knowing full well that the Public Service Pension Fund was headed for bankruptcy, supported protests against the Democratic Progressive Party administration’s pension reforms.
Similarly, the KMT knows beyond the shadow of a doubt that its cross-strait policy stance that the Republic of China is the “one China” is no more than a pipe dream, yet has touted that pipe dream for more than a decade, because it knows that only by creating conflict can it gain enough support to control resources, if only at the local government level.
KMT politicians are not the blind fools that many people think they are. They clearly have agendas.
The bottom line is that people should remain clear-headed in the face of the KMT’s rhetoric — a lesson that Kaohsiung residents have learned the hard way after the 2018 mayoral election.
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