A plan for the government and parents to jointly invest in exchange-traded funds (ETFs) for children is being considered to counter Taiwan’s low birthrate, the National Development Council (NDC) said today.
The policy, proposed today by Democratic Progressive Party Legislator Kuo Kuo-wen (郭國文), suggests that the government and parents both contribute NT$1,200 (US$38.19) monthly to a Taiwan ETF investment account until the child is 10.
Assuming an annual return of about 10 percent on Taiwan stocks, the child could have NT$1 million by the time they turn 18, which could be used for education, starting a business or buying a home, Kuo said.
Photo: CNA
Only 98,785 babies were born in the first 11 months of this year, he said, adding that raising children is a national responsibility as well as a family one.
If there are about 100,000 babies born every year, the annual government budget for the plan would be about NT$14.4 billion, Kuo said.
This is not an expense, but an investment in the nation’s future, he added.
From a financial perspective, returns from savings accounts are often eroded by inflation, making long-term investments more effective, Securities Investment Trust and Consulting Association chairman You Chou-wen (尤昭文) said.
The UK, Singapore, Japan and Canada all have similar ETF investment policies, and Taiwan’s ETFs are the third-largest in Asia, You said.
Industries would welcome this policy, as it would spark more private investment, he added.
US President Donald Trump’s children accounts are expected to launch next year, and would include tax breaks and be open to corporate donations, Wenzao Ursuline University of Languages vice president Tsai Wei-che (蔡維哲) said.
Taiwan’s current child accounts under the Ministry of Health and Welfare target economically disadvantaged families and primarily include fixed deposits, Tsai said.
In the future, Taiwan could follow the US model, introducing private investment and making use of the capital market’s power, he said.
The Executive Yuan cares deeply about Taiwan’s declining birthrate, NDC Department of Social Development Deputy Director Lai Yun-lin (賴韻琳) said.
While the health ministry offers child accounts for middle and low-income households, they are savings-oriented and subject to certain restrictions, Lai said.
Leveraging the capital market to support children’s futures is an important direction, she said.
The NDC would bring the child investment account proposal to the Executive Yuan and convene relevant agencies to discuss the policy, she added.
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