Industrial Innovation Act: MOE Version is Best

Industrial Innovation Act: MOE Version is Best
China Times editorial (Taipei, Taiwan, ROC)
A Translation
April 9, 2010

The sunset provisions for the "Statute for Upgrading Industries" kicked in last year. The Ministry of Economic Affairs offered its "Industrial Innovation Act" as a replacement. But just as the Legislative Yuan session was about to end, a big business operational headquarters tax provision popped up, raising a slew of side issues. Disputes erupted and the bill never became law.

During the current Legislative Yuan session, intense mobilization put the Industrial Innovation Act at the top of the to do list. Objectively speaking, it looked as if the bill would pass. But suddenly controversy arose. Two points of contention emerged. The first point of contention was the newly added Article 21. It states that "If small and medium businesses increase their staff, central government authorities must provide employment subsidies. These subsidies may be as high as 10,000 NT a month, and last up to six months. With elderly hirees, the subsidies may last up to one year." The other point of contention was the DPP's proposal that the business tax rate be lowered to 17. 5% from the 20% originally proposed by the Ministry of the Treasury. According to newspaper reports, the KMT has adopted an open-minded attitude toward the tax cuts. Given current tensions between the two parties, and our past experience with ruling and opposition party politicians, we fear compromises in the content of the Industrial Innovation Act. We hope that rationality will prevail, that matters have not gotten out of hand, and that a bill that harms our economy will not be passed.

First, let's look at the tax cuts proposed by the Democratic Progressive Party. Permit us to say in advance that it is a violation of the Budget Law. It is a populist provision that panders to voters and that has not been subjected to careful review. It makes no sense, and must not be hastily passed into law. In 2009 businesses on Taiwan paid 332.5 billion NT in income taxes. Most companies were subject to a tax rate of 25%. Every one percent reduction in tax rates equals 13.3 billion NT. The DPP proposes reducing the tax rate from its original 20% to 17.5%. In one fell swoop it is reducing the annual revenue in the national coffers by at least 33 billion NT. This is a significant loss of revenue. The DPP made this proposal without careful calcuation, without discussion, without mentioning the loss in revenues. It merely shouted tax cut slogans. What is this, if not populism? Is this the kind of behavior we should expect from a responsible political party?

Article 91 of the Budget Law stipulates that legislators who propose substantial increases or decreases in revenues must indicate how the shortfall in funds will be made up. When necessary, they must amend other laws. No matter how one slices it, a 30 billion NT reduction in annual tax revenues surely falls under this provision. The frustrating thing is that over the years both ruling and opposition party legislators have regarded the article as a dead letter. Logically speaking, amending the law is a clear violation of the Budget Law. The Executive Yuan would be well within its rights to demand a constitutional interpretation. Until then, it could treat the issue as a legal dispute and deal with it accordingly. Alas, both Blue and Green administrations have long dragged their feet when it came to tax cut cases. The Republic of China's fiscal plight is about to hit bottom. Yet the DPP insists on these spendthrift proposals. The next time our international credit rating is announced, the bill will come due, for both the KMT and the DPP. The responsibility for the current financial chaos would have been laid entirely at the feet of the ruling KMT and the Ministry of Finance. But since the opposition DPP has been complicit in this crime, it must share the blame. We would like to ask Chairman Tsai, was it really worth it?

Let's take a closer look at the Industrial Innovation Act. Article 20 provides employment subsidies. Frankly, one does not need an industry background to see that the provision of such subsidies for short-term employment will do nothing for "Industrial Innovation." To incorporate such provisions within an industrial innovation bill is absurd. Senior staff employment subsidies and short-term unemployment measures are not conducive to innovation. If anything, they discourage innovation. The administration could have pushed for employment subsidies any time it wanted. It had no reason for tacking an irrelevant provision onto such an important regulation. Secondly, the virtue of other governments' unemployment measures is their flexibility. Turning such provisions into law undermines flexibility. Worse, it is tantamount to assuming that Taiwan will remain plagued by high unemployment. It is tantamount to poor-mouthing Taiwan. Just exactly who in the ruling party proposed such a decadent, obtuse, and bizarre amendment? One really has to wonder.

In sum, we oppose the 17.5% business tax rate proposed by the DPP. We oppose the employment subsidies proposed by the KMT in Article 21. We oppose additional tax cuts for operational headquarters. We support the Ministry of Economic Affairs' original proposal. The aforementioned amendments underscore just how indolent ruling and opposition party legislators have been. Legislators receive research assistant subsidies amounting to several hundred thousands of NT a month. Who knows where these subsidies have wound up? These legislators deserve condemnation. Finally, we must blame the KMT for its failure to coordinate between the party and the administration. They have actually make such outrageous proposals regarding operational headquarters and employment benefits. They have actually allowed them to undergo a Second Reading. If the ruling and opposition parties persist in amending the law in such an irresponsible fashion, what can we say, other than "You are a disgrace!"

中時電子報 新聞
中國時報 　2010.04.09
產創條例 經濟部原始版本最好
本報訊

《促進產業升級條例》已於去年底落日，原本經濟部要提出《產業創新條例》以為取代，但在立法院院會結束前，突然冒出一個大企業營運總部的免稅條文，徒然旁生枝節，擾攘紛爭之下，並沒有完成立法。

立法院這個會期在高層動員之下，將《產業創新條例》列為優先法案，就客觀情勢來看該法也必然會通過，但是又半路殺出程咬金，重新出現兩個爭議點。其一是新增的廿條之一，其內容是「中小企業增雇一定員工，中央主管機關得予補助，預計一個月可補助一萬元，最長六個月，聘僱高齡者，補助時可延長一年」；其二是民進黨建議將營所稅率從原先財政部建議的二○％，再降為十七．五％意見，報載國民黨對減稅採開放態度。以目前兩黨劍拔弩張的態勢，參酌以往朝野政治人物和稀泥的經驗，我們對於《產創條例》最後的協商通過內容深以為憂。我們希望及早理性推論，以免覆水難收，立出一部傷害台灣經濟的法律。

先看民進黨所提的降稅動議。讓我們先說結論：這是一個違反《預算法》、討好選民、沒有經過細密討論的民粹條文；不但沒有道理提案，更不該這樣倉卒立法。二 ○○九年台灣營利事業所得稅實收三三二五億，以絕大多數企業適用的二五％稅率計算，每降一趴稅率就是一百三十三億。當民進黨建議，將稅率由原法的二○％降至十七．五％時，就是一舉每年至少減少國庫三百卅億稅收。這麼大幅度的稅收損失，民進黨立委提案卻是未精算、未論述、未提稅損的後果，只是一股腦地狂喊降稅；這不是民粹是什麼？這像是負責任的政黨所該有的作為嗎？

《預算法》九十一條明訂，立法委員所提法律案大幅增加或減少歲入者，應指明彌補資金之來源，必要時應同時提案修正其他法律。每年減少稅收三百多億，不論用什麼角度來看都是該條文所應規範的對象，無奈朝野立委歷年來一向將該法律條文視同具文。照理說，在立委修法動議明顯違反《預算法》時，行政當局大可聲請釋憲，並在結果出爐之前以法律爭議疑義處理之。無奈不論是藍綠政黨執政期間，從來就是對所有減稅案「半推半就」。在台灣財政行將破底之際，民進黨若再去堅持這種敗家子動議，在下次國際信評出爐時，這筆帳就會由民進黨替國民黨來擔了。原本，該黨大可將當前財政亂局總歸為執政黨與財政部的責任，如今卻自己成為共犯。請問蔡主席，這樣做划得來嗎？

再分析《產創條例》廿條之一的就業補助條文。老實說，任何人不需要產業背景都能看出，這種補助短期就業的條文與「產業創新」根本八桿子打不著，放在產創條例之中簡直是精神錯亂。補助聘僱高齡員工，除了降低短期失業的作用之外，其實是不利於創新的、是反向鼓勵人員更新的。再說，此類促進就業補助案行政當局原本就可以做，犯不著放在位階極高的法律條例中畫蛇添足。其次，國外所有挽救失業的措施貴在其彈性與機動，而放在法律條文不但是最欠缺彈性的處理，更在立法背景上就等同假設台灣將「持續」處於高失業狀態，完全是唱衰台灣的心態。執政黨中究竟是誰能提出這麼墮落、這麼愚蠢、這麼脫線的修正條文，真是令人不解。

整體而言，我們反對民進黨所提營所稅降至十七．五％的修正案、反對國民黨廿條之一的就業補助案、反對營運總部擴大降稅率，而支持經濟部原始的提案。事實上，前述修正案不折不扣凸顯出朝野提案立委的不用功、不長進。立委每個月數十萬元的研究助理補助費，都不知用到哪裡去了，應該予以譴責。最後，我們也要責備國民黨的黨政協調機制；竟然連營運總部、補助就業這麼離譜的提案，也能過關斬將送到院會二讀。朝野政黨如果老是以這種態度修法，我們除了「丟人現眼」四個字之外，實在也說不出什麼好話了。