A Jerry-Rigged Economic Policy: No Direction, No Future

A Jerry-Rigged Economic Policy: No Direction, No Future
China Times News editorial (Taipei, Taiwan, ROC)
A Translation
January 15, 2010

The financial news on the 12th of this month focused on two points. Both have considerable influence on our economic development. First, the Council of Labor Affairs adopted a draft amendment to the Labor Standards Law. It hopes to adopt German legal reasoning, which stipulates that "mergers and acquisitions may not result in employee changes." It wants to forbid un-incorporated companies and financial holding companies from dismissing employees following mergers and acquisitions. Secondly, it wants to replace regulations pertaining to the promotion of innovation in sunset industries. It wants grants to promote research and innovation, along with business tax cuts, in order to attract foreign capital.
These two bills are merely the beginning. Other bills have already entered their second or third reading in the Legislative Yuan. All are equally controversial. If the Labor Standards Act is amended in accordance with the Council of Labor's demands, financial holding companies will be petrified. It will also take Taiwan farther away from the free market. Businesses undergo mergers and acquisitions in order to achieve synergy. Changes in the work force are essential for improved company performance. If financial holding companies are not allowed to lay off personnel following mergers, it is certain to discourage companies attempting to expand their financial reach. What's worse, the new bill may even be retroactive. The stipulation that "mergers and acquisitions may not lead to employee changes" may express the spirit of German law. But German laborers enjoy close-knit legal protections based on a venerable philosophical foundation. Taiwan must not selectively imitiate Germany's labor laws. This haphazard transplanting of another nation's laws may not be appropriate for our society, and will inevitably inspire skepticism.

The new industrial innovation law is also controversial. This law can be boiled down to two words: "tax cut." It cuts the general business income tax to 20%. Even more controversial is Article 30. It cuts taxes for operational headquarters to 15%. The logic of the ruling party has always been to bring tax rates down to those of Singapore and Hong Kong. It has long applied this logic to both business regulations and the income tax. Early last year, a substantial cut in the inheritance tax rate reflected this very thinking. But Singapore and Hong Kong are small. Neither has a manufacturing base, and no broad based work force. Their economic and social structures are very different from Taiwan's. We are obviously different from Singapore and Hong Kong. Yet we insist on emulating their low tax regime to attract cross-border business. This is another example of our haphazard transplantation of other peoples' tax systems. This has long been a target of criticism by economic and financial experts.

In addition to the aforementioned two bills, we have the national health insurance system, labor pension system and social welfare system. All three were adopted in the past few years. These were inspired to a considerable extent by the Scandinavian countries. The Republic of China's health insurance program has been praised by Nobel Prize winning economist Paul Krugman. But Krugman failed to notice that our Director of Health has demanded a health insurance premium increase upon threat of resignation. The increase remains far off. On the one hand the public on Taiwan enjoys the level of health care and social welfare enjoyed in Scandinavia. On the other hand our tax burden is merely one-third that of the Northern European nations. We get more. We pay less. No one in the government cares that the health insurance program and pension program cannot possibly continue in this manner forever. Put simply, we want only to transplant the Scandinavian system of welfare benefits. The rest of the system we refuse to look at.

Politicians on Taiwan love jerry-rigging. Public infrastructure uses mass rapid transit systems and trains from Canada and France. It uses high-speed rail transport components from Japan and Europe. They are all cobbled together haphazardly, depending upon our politicians' whims. On the policy front, we imitate Germany's labor laws, Hong Kong and Singapore's tax cut regimes, the Scandinavian countries' social welfare system, America's university system, and the Communist Party's party organizational structure. Our constitution is a major work of jerry-rigging. It components can euphemistically be described as "the best of all worlds." But in fact it is rife with incompatibilities. Mutually-exclusive organs have been transplanted into a single body. The final outcome is certain disaster.

If a country wants to adopt the Scandinavian welfare system, it must impose high taxes to cover its expenses. It cannot possibly maintain a low tax rate. If it insists on a low-tax rates to attract cross-border business, it will not have enough funds to take cover social welfare. Also, since 2001 our government has been promoting a knowledge economy. But it fails to understand that rapid changes within a knowledge-based economy necessitate frequent labor force disruptions. Therefore promoting a knowledge-based economy will inevitably affect labor policy and social welfare policy. Unfortunately, Taiwan's populist political climate, short-sighted politicians, and the mindset of the man in the street have never fully meshed. A jerry-rigged machine is usually riddled with defects. It can seldom continue operating over time.

No one knows where our government is taking us with its public policy. Is it towards Scandinavia's Nanny State? Singapore and Hong Kong's low tax, small government regime? Germany's state capitalism? America's free market? The United Kingdom's privatization model? South Korea's consortium led government? Indonesia's crony capitalism? Where exactly is it taking us? The public on Taiwan no longer dares to hope for enlighted leaders with shining visions. All it wants is a clear direction. Nothing more.

中時電子報 新聞
中國時報 　2010.01.15
社論－拼裝車式經濟政策 沒方向也沒前途
本報訊

本月十二日媒體的財經新聞有兩個重點，都相當程度會影響未來台灣的經濟發展。其一，是勞委會通過了勞基法修正草案，希望套用德國「併購不得改變僱傭」的法律邏輯，要求將來非股份有限公司及金控公司於併購時，不得解僱員工。其二，是關於取代促產條例落日的產業創新條例，其主軸就是要對於各行各業的研發創新予以補助，並以降營所稅率等方式，吸引外資外商來台。

前述這兩項法案一個只是主管機關的修法初步意見，另一個則已將進入立法院二讀、三讀，但兩者爭議卻不相上下。勞基法如果依勞委會規劃修正，許多金控公司都心驚膽跳，也使台灣離自由市場更遠。企業合併就是要取得綜效，而員工調整當然是必要的改善績效手段。倘若金控公司併購後不准裁員，甚至新的法案還可能溯及既往，則必然會使意圖擴張金融版圖者卻步。「併購不變僱傭」是德國法律的精神，但德國勞工有綿密的證照保護、有淵遠流長的哲學背景；台灣別的都不學德國，卻只有勞工制度抄襲人家。這種半調子的制度移植，是否與社會情境格格不入，難免讓外界質疑。

再以產業創新條例的立法爭議為例：這部法律的重點就只有「降稅」兩個字，除了一般營利事業所得稅降到廿％，更在爭議性極大的第卅條，要將營運總部的各種賦稅再做降低，營所稅率甚至要降至十五％。執政黨一貫的邏輯，就是要把各種稅率設法與新加坡、香港拉平，不但在產創條例、所得稅法中如此，去年初大幅調降的遺贈稅率也是同樣的構思。但是新加坡與香港都只是彈丸之地，既無製造業基礎，當然也沒有廣大的基層勞工，經社結構與台灣截然不同。我們明明與星、港不同，但卻偏偏要學他們以低稅吸引過境商務的模式。這又是片面移植稅制的突兀思維，財經學者對此早有強烈批評。

除了前述兩個待審法案之外，台灣過去幾年通過的全民健保、勞保年金等社福制度，卻又有相當程度的北歐色彩。台灣的健保方案頗受諾貝爾經濟學家克魯曼好評，但克氏卻沒注意到，我們的衛生署長把烏紗帽提在手上要求漲健保費，卻仍然遙不可及。台灣人民一方面享受北歐級的健保社福，一方面租稅負擔率卻只有北歐的三分之一。這樣拿得多、付得少，政府上下沒有一個人在乎健保與年金難永續營運的現象。簡單地說，台灣只想移植北歐的社福給付，其他的制度卻不肯、不願學習。

台灣的政治人物就是愛做拼裝車。在公共建設方面，捷運系統與車廂有加拿大有法國、高鐵運輸組件有日本有歐洲，一切的拼裝取擇，都看政治人物的臉色決定。在政策制度方面，我們似乎是要勞工學德國、降稅仿星港、社福學北歐、大學抄美制、黨務效老共、憲法則是集拼裝之大成，好不熱鬧。拼裝的好處美其名是能「取各家之長」，但實質上卻極可能是左支右絀，各種移植器官在體內互不相容，最後極可能悲劇收場。

舉個例子來看，一個國家如果社福制度要學北歐，就一定需要大筆稅金因應其開支，故勢必不可能採取低稅率。相反的，如果堅持要採低稅率吸引過境商務，那就不可能有餘裕預算來照顧社會福利。再者，台灣自二○○一年以來就不斷推知識經濟，但似乎卻渾然不了解知識經濟時代由於產業更迭迅速，必然牽涉頻繁的勞工異動，故推動知識經濟就難免有勞工社福的配套思慮。但可惜的是，台灣的民粹政治、短視政客、庶民思考，就從來不曾綿密周詳。拼裝車不是少了輪胎就是熄了大燈，只要過一段時間，就必然是難以為繼了。

以過去數年的重大公共政策操作來看，坦白說，沒有人知道我們的政府要把台灣經濟帶向何方？是北歐的大政府？是星港的輕稅簡政？是德國的國家資本？是美國的自由市場？是英國的民營化？是韓國的財團主導？是印尼的家族裙帶資本主義？究竟是什麼？台灣人民已經不敢奢求聖君明相，只期待有個方向，如此而已。