The Cabinet is planning to follow up on its decision to issue its Quintuple Stimulus Vouchers by reissuing vouchers for arts, sports, agricultural and Hakka affairs, which it used last year to boost business in those sectors.
The government is hoping that such voucher programs will further stimulate consumption and revitalize the economy.
It is pleasing to see that the government is planning all kinds of voucher programs, which would be welcomed by domestic-demand oriented industries that have been hard hit by the COVID-19 pandemic this year.
However, the authorities must not forget that when designing these stimulus vouchers, they should not bundle them with the Cabinet’s Quintuple Stimulus Vouchers. If they do, public consumption is likely to focus only on certain industries, and the programs might not have a synergistic effect in boosting business in all sectors affected by the pandemic because they did not spread out consumption.
For example, the Sports Administration has revealed that the new version of its sports vouchers would be issued based on a “consumption before voucher” approach: consumers would first have to spend a minimum of their Quintuple Stimulus Vouchers at stores cooperating with the 12 major sports sectors before they are eligible to receive the sports vouchers.
This kind of double incentive might attract spending to the sports sector, but it is also likely to draw voucher use from other areas and thus only boost sports businesses. This is the opposite of the goal of issuing vouchers to increase consumption and revitalize the whole economy.
To be blunt, as many as 3.76 million Taiwanese used last year’s sports vouchers. If the new vouchers are bundled with the Quintuple Stimulus Vouchers and issued before them, they are unlikely to benefit non-sports sectors.
Similarly, the Council of Agriculture has said that it plans to bundle its agricultural vouchers with the Quintuple Stimulus Vouchers, but it should proceed with caution.
Moreover, the government should use a variety of policy tools to launch preferential measures in an orderly manner, implementing different policies at different times to continuously encourage consumption.
For example, as autumn approaches, the government could issue stimulus vouchers for sports, agriculture and Hakka affairs, as these consist mainly of outdoor activities. This could be followed up this winter by issuing arts vouchers, as most of those activities would be indoors. Doing it in this way would extend the effect of the vouchers.
This year, the economic effects of the pandemic have been deeper and felt longer than last year. They have most affected the retail, dining, service and hospitality sectors, which together employ 60 percent of the country’s workers.
The purpose of the Quintuple Stimulus Vouchers is to increase the public’s willingness to spend, and to direct consumption toward sectors in urgent need to maximize the economic benefits.
Therefore, when designing voucher programs and complementary measures, the government should take the overall situation into consideration. In addition to preventing consumers from using their vouchers in just a few sectors, it should launch the voucher programs step by step, integrating private sector resources to gain the greatest effect. The most effective way to boost the economy is to let all sectors benefit from the vouchers.
Charles Yu is a professor at National Chung Hsing University’s Graduate Institute of Sports and Health Management.
Translated by Eddy Chang
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