Reconsider the Idea of Distributing Dividends Worth NT$50 Billion

 Reconsider the Idea of Distributing Dividends Worth NT$50 Billion

China Times Editorial (Taipei, Taiwan)

January 20, 2019

 Translation of an Excerpt

President Tsai Ing-wen once planned to distribute dividends worth NT$50 billion; however, the KMT questioned that it was an electioneering gimmick for the 2020 presidential race. Media opinion also favored using the budgetary surpluses for reducing debt. Under the opposition of public opinion, President Tsai’s generous idea suddenly was called to a stop. Nevertheless, leaving aside political calculations, society should ponder again; with the slow-down of the momentum for economic growth, at the juncture of the livelihoods of the people in the middle and lower income brackets becoming more and more difficult, if there is a surplus in government finances, is the distribution of dividends to people in the lower income brackets a good policy?

In addition to the slow-down in economic growth, Taiwan is now facing three great predicaments to social security, threatening the stable development of society: first is the trend of declining birthrates, stagnating demographic growth, and spawning a problem of inadequate population. The second is that Taiwan has entered into an ageing society, but the system for the long-term care of the elderly has not been wholesome, becoming a heavy burden for young people, and impacting the maintenance of social productivity. Third, the annuities reform has had a serious impact on the official system, whose pay had already been relatively inadequate; quite a few elite military, civil servants, and public school teachers have been leaving their posts one after another, with those who chose to remain suffering from low morale, causing an obvious negative impact on the governance efficiency of the government. Summing up the three, strictly speaking, they have already become a national security issue.

In recent years, private sector investment has been in the doldrums, but capital, however, is abundant; with interest rates for long remaining low, thus, many funds have moved overseas. Central Bank bond sales have become extremely easy, indicating that the government debt ceiling has room for easing. Proposing a budget which lists higher bond revenue, the government may thus have more ample fiscal resources to provide higher childcare subsidies, establish public nurseries and childcare centers, offer cheaper and more convenient long-term elderly care services, and raise the pay of military, civil servants, and public school teachers with “feeling.”

The goal of the government is to erect a society of happiness; with a limited hike in government indebtedness, yet it can offer enough incentives for young people to raise children, let the elderly live with ease, and let quality military, civil servants, and public school teachers provide the best environment for livelihoods and enterprises. Taking a long view, government debt may change depending on economic growth and interest burden; it may slow down following a crest, enabling a society of happiness and prosperity to quickly arrive. Then why not?

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