The Democratic Progressive Party (DPP) yesterday defended its stimulus coupon program amid accusations that President Tsai Ing-wen (蔡英文) was applying double standards, having criticized former president Ma Ying-jeou’s (馬英九) consumer voucher program.
DPP spokeswoman Yen Juo-fang (顏若芳) listed five reasons why the Tsai administration’s coupons are better than the Ma administration’s consumer vouchers.
The Ma administration in 2009 issued consumer vouchers of NT$3,600 (US$120.3) per person in a bid to stimulate the economy in the wake of the global financial crisis, while Tsai’s policy would allow people to purchase NT$3,000 coupons for NT$1,000.
Tsai, then-the DPP chairperson, had written on Facebook about the downsides of Ma’s voucher program. The post has sparked discussions among netizens, with some accusing her of double standards.
The post is proof that Tsai had known clearly that the vouchers would fail, which they did, with the results being less than half of what was expected, Yen said.
Second, the economic backdrop then and now are completely different, she said.
The voucher program was the Ma administration’s only response to the global financial crisis, when more than 600,000 Taiwanese lost their jobs and the public was worried about making ends meet, so most people used the vouchers to buy necessities, Yen said.
The vouchers did not unleash any economic momentum as expected, Yen said, citing a National Audit Office report.
However, the stimulus coupons are being issued to encourage people to go out and spend, as people have been avoiding going out because of the COVID-19 pandemic, she said, adding that such an “ignition” could lead to an “explosive growth in consumption.”
Third, the government adopted different policy tools for each stage of the economic revival amid the pandemic, such as cash handouts during the relief stage and coupons in the recovery stage, she said.
The government approved a budget of NT$103.5 billion for cash handouts for the needy, of which more than NT$70 billion has been given out, helping more than 4 million people, Yen said, adding that it was in line with Tsai’s 2008 post, which said cash handouts were good for an economic bailout.
However, coupons would work better than cash during a recovery stage, so the government set up another NT$50 billion to issue the coupons, she said.
Several businesses and banks have rolled out promotional packages following the announcement of the coupon program, showing that the market is ready for the expected hikes in consumption during the summer vacation, she added.
Fourth, the stimulus coupons can be used via credit cards or other types of digital payment, making them more convenient and cost-saving than paper vouchers, Yen said.
Unlike Ma’s voucher program, unregistered stores, such as night market vendors, can also benefit from the coupons, as they can exchange them for money through the market’s regulatory body, she said.
And fifth, the Tsai administration’s fiscal capabilities are greater than Ma’s, she said.
Government debt is at its lowest in 11 years, with a public debt-to-three-year-average GDP ratio of only 30.5, Yen said, adding that there is still room for borrowing of NT$1.5 trillion before it reaches the debt ceiling of 40 percent.
The ratio during Ma’s administration once reached as high as 36 percent, due to its “reckless borrowing behavior,” she added.
The Tsai administration has maintained rigorous fiscal discipline over the past four years, allowing it to take proper measures in response to the worst pandemic in modern history, she said.
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