As the economic fallout from the COVID-19 pandemic escalates, the government should ease requirements to allow more small and medium-sized enterprises (SMEs) and self-employed people — who have been hit hardest by the outbreak — access its NT$210 billion (US$6.98 billion) relief program.
The government unveiled the funding program earlier this month as it shifted its focus to relief efforts. The program aims to save about 2 million jobs, as a growing number of SMEs face imminent closure due to a drastic decline in business and trade worldwide. It creates incentives for business owners to keep employees on their payroll.
Night markets and commercial areas are bearing the brunt, as restrictions on foreign travelers have led to a decline in tourist numbers, while local consumers are avoiding eating out.
Taipei’s Shilin Night Market (士林夜市), one of the places foreign tourists visit most, saw visitor numbers slump to 10 percent of pre-pandemic levels. Some vendors have temporarily halted business to save costs, as they have limited financial buffers, which makes them more vulnerable to immediate financial hits.
According to the government’s scheme, affected night market vendors would be eligible to apply for a loan of NT$500,000 to NT$6 million at a low interest rate.
However, strict requirements are hindering access to the funds.
Applicants are required to provide tax payment records for the past three to six months to prove that the pandemic has harmed their business.
However, most stand vendors and owners of small stores do not give customers receipts or keep detailed accounts, so they are effectively shut out of the program.
The government should expand the eligibility pool to help more SMEs that are on the brink of financial failure to weather the crisis.
Taiwan would risk a new wave of unemployment if the government does not quickly provide financial aid.
The number of furloughed workers rapidly rising to 15,634 is a warning sign.
Some self-employed people, gig economy workers and low-income earners have also had problems accessing the relief funds.
Monthly payouts of NT$30,000 are only available for people covered by labor insurance and earning less than NT$24,000 a month or those who are exempt from paying income tax, according to the Ministry of Labor.
About 1.18 million people — including workers in the food delivery sector and at eateries as well as construction workers — are eligible to apply for emergency funds, the ministry said.
That leaves people without labor insurance and those who earn more than NT$24,000 out in the cold.
The government should prepare a separate relief package to help such people to prevent them from falling into a financial abyss.
As the pandemic is likely to have greater impact on Taiwan’s economy than the SARS outbreak of 2003, it is crucial that the government expand the social safety net as wide as it can to ensure a faster economic recovery.
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