Will a Barrage of Relief Vouchers Save the Economy？
By Lin Zhao-zhen
China Times, July 10, 2020
In the wake of "Triple Stimulus Vouchers" plan, the Council of Agriculture announced on July 9 that it will hand out 5 million copies of agri-tourism coupons to revitalize the agriculture. Immediately afterwards, Council of Culture, Hakka Affairs Council, and the Ministry of Education have also launched benefit plans one after another, aiming at activating the domestic tourism and the consumer markets affected by the coronavirus (COVID-19) pandemic. On the same day, Premier Su Tseng-chang ordered the Executive Yuan to tabulate the assistance required by stressed enterprises and roll out a special economic relief budget proposal, namely Relief 3.0. Obviously, the economic outlook is not as good as the surface, otherwise why increase the budget by NT$200 million (about US$6.7 million)? By printing money and rolling our relief vouchers, can Taiwan really avoid the awkward situation of layoffs and selling of restaurants?
Since the beginning of 2020, the new coronavirus swept across the world. Many cities in the world were locked down, businesses suffered slumps, and the Taiwan Stock Exchange Index dropped to 8,500 from 11,500 points. After the pandemic slowed down, coupled with the bailout and revitalization vouchers, the stock market index has recently bounced to over 10,000 points. It seems that the economy is recovering, but the recent economic growth forecast from Taiwan Research Institute has been revised down to 1.55 percent, which is more pessimistic than the 1.67 percent estimated by the Directorate-General of Budget, Accounting and Statistics of the Executive Yuan. The real economic situation is not as good as news reports that travelers swarmed to tourist spots and the ferocious spending spree phenomena. On the contrary, business insiders revealed that more than 50 restaurants in southern Taiwan are eagerly seeking sales, and it is no wonder a barrage of relief packages by various ministries will hit the market.
As soon as the government announced the Relief 3.0 plan, the Life Travel & Tourist Service Company announced its plan to cut its manpower by 20 percent, while the Machinery Association publicly pointed out that machine tools exports have declined, exhibiting that the previous trillion NTD (about US$33.9 billion) bailout and loans of the Tsai government has only increased the burden of grassroots officials, as it didn’t achieve the expected effect of stanching bleeding of businesses. Just as the Internet survey on the usage of the "triple stimulus vouchers" shows, nearly 70 percent of the people want to use the voucher only to buy daily necessities or to pay for transportation, which are substitute consumption at best, and there are no spillover effects as officials have claimed.
The Tsai administration boasts of its pandemic-prevention and economic relief measures. Nonetheless, the reality does not seem to be so good as it claimed. The problem of relief measures lies in untimely loans and subsidies in a critical situation, while revving up tourism measures focused only on the domestic market, not to speak of the stimulus voucher package is not user friendly. The agri-tourism vouchers must be logged on the Internet, which is not convenient to the aged people.
There are various relief measures launched by the government, but most of the help for businesses are employee salary subsidies or loans during the lean months. Due to the recent resurgence of the second wave of the pandemic overseas, the stress faced by businesses has changed from an initial shortage of materials and parts to a lack of orders. Manufacturers unable to sustain themselves must dock expenditures, and everything is back to the starting point. Therefore, the authorities should reflect on ways to handle economic recessions. Subsidies to businesses are not the only way, they should serve the function of improving business operations, such as assisting the enterprises to develop e-commerce and expanding the scope of customers.
The Tsai administration offered "triple stimulus vouchers" to differentiate it from President Ma Ying-jeou’s consumption vouchers. In fact, printing voluminous vouchers with different functions does no good to the environment, and squanders the government budget- let alone its performance hasn’t surpassed that of its predecessor. Why not simply distribute cash to have everyone benefit?
From: https://www.chinatimes.com/opinion/20200710005078-262105