Taiwanese Executive Yuan announced in October its program to bolster consumption, which will be based on the principle of the “government providing subsidies, enterprises adding incentives and all citizens enjoying the benefits.” The program emphasizes collaboration between the public and private sectors, encouraging businesses to coordinate with the government in conducting promotional sales and discounts that foster a festive year-end purchasing trend.
Global economic growth this year has been lower than anticipated, thus impacting the nation’s overall economic performance. Taiwanese Premier Mao Chi-kuo noted that the government on July 27 implemented economic bolstering measures that focused on three fronts—upgrading industries, expanding exports and inducing investment—to raise the nation’s overall competitiveness. However, short-term export expansion depends primarily on the state of the global economy, and investment inducement requires a longer period of time to bear fruit.
Thus, to speed up the economic recovery, the premier directed relevant ministries and agencies to come up with short-term measures for boosting consumption. The National Development Council has compiled these measures into the program in hopes of stimulating domestic consumption and bringing about a multiplier effect for industrial development.
The consumption-boosting program covers four major aspects: energy and water conservation, digital lifestyle, online purchases and domestic tourism, the premier pointed out. It includes eight concrete measures, encompassing subsidies for purchasing energy- and water-saving products, acquiring small-scale agricultural tools, upgrading cable broadband from second-generation (2G) to fourth-generation (4G) as well as mobile phones from 2G to 4G, conducting joint promotional activities for online shopping (i-shopping), and inducing domestic travel and accommodation. From November 7, 2015, to February 29, 2016, all purchases of designated products and participation in domestic tourism will be eligible for the government’s respective subsidies.
Though such subsidies are designed to incentivize personal consumption and boost domestic demand, they also harbor the benefits of encouraging citizens to conserve energy and water, promote digital lifestyle, enhance their quality of life, and enrich their experiences through domestic tourism while also upgrading the industrial structure.
The Executive Yuan stated that based on estimates of the program’s investment of NT$4.08 billion (US$124.50 million), the nation’s GDP would increase by about NT$15.4 billion (US$469.51 million). However, as the program calls for private sector collaboration with the government in promotion and discounts, government subsidies and businesses’ additional incentive measures will help boost personal consumption and stimulate domestic demand, producing a multiplier effect.
Thanks to the program, it is estimated some 1.213 billion watts of electricity and 98.55 million metric tons of water would be saved and carbon dioxide emissions would be reduced by 83,000 metric tons.
In digital lifestyle, the program could galvanize 522,000 2G users to upgrade to 4G, and increase digital opportunities for disadvantaged people and residents of remote areas. In online purchase, it could produce NT$15 billion (US$456.07 million) in transaction turnover while helping to publicize domestic online purchasing platforms. In domestic tourism, it would encourage citizens to travel and to increase their spending when staying overnight.