Must Ordinary Taxpayers Subsidize Big Business?

Must Ordinary Taxpayers Subsidize Big Business?
China Times editorial (Taipei, Taiwan, ROC)
A Translation
March 20, 2012

Summary: Suppose someone proposed having ordinary citizens subsidize Big Businesses such as TSMC, Hon Hai, China Steel, and the filthy rich? Everyone would express angry opposition. There would be a public backlash. The government would be terrified of doing so. But consider the current gas and electricity price control system. It is precisely that. It is a system that compels ordinary citizens to subsidize Big Business and the filthy rich. Many people don't see this. That is why when the government proposes unfreezing prices, they say no.

Full Text below:

Suppose someone proposed having ordinary citizens subsidize Big Businesses such as TSMC, Hon Hai, China Steel, and the filthy rich? Everyone would express angry opposition. There would be a public backlash. The government would be terrified of doing so. But consider the current gas and electricity price control system. It is precisely that. It is a system that compels ordinary citizens to subsidize Big Business and the filthy rich. Many people don't see this. That is why when the government proposes unfreezing prices, they say no.

Taipower and China Petroleum are state owned enterprises. Any profits they earn are returned to the treasury. Any losses they suffer are made up by the national treasury. In other words, when gas and electricity prices fall, China Petroleum and Taipower suffer losses. The treasury, i.e., taxpayers, are compelled to subsidize users of gas and electricity. This subsidy resembles the social welfare system. Social welfare is a form of income redistribution. It redistributes money from those who have more, to those who have less. Gas and electricity subsidies are also a form of income redistribution, in reverse. They redistribute wealth from ordinary taxpayers to Big Business and the filthy rich. Big Business and the filthy rich receive the most. The economically disadvantaged receive little -- pitifully little.

Let us examine the data. Say the cost of Taipower's power generation is $100. Industrial users of electricity and ordinary users of electricity pay about $70. In other words, the government subsidizes industrial users of electricity and ordinary users of electricity about $30. Ordinary users of electricity receive slightly more. This arrangment appears to benefit the general public. But examine some of the other data. The average family consumes about 350 kWh of electricity per month. But major commercial and industrial users consume an average of seven million kWh of electricity per month, or about 20,000 times as much as the average family. Homes of the super-rich consume about 10,000 kWh of electricity per month, or about 30 times as much as the average family.

Mega-enterprise power consumption is even more mind-boggling. Each month they use hundreds of millions of kWh of electricity. China Steel's electric bill last year was 4.86 billion NT, If we continue to freeze electricity rates this year, the taxpayer will be compelled to subsidize the steel industry to the tune of one billion NT. TSMC's electric bill accounts for only 3% of its annual revenues, One year of electricity costs 12 billion NT. Freezing the price of electricity this year will cost taxpayers 2.5 billion NT in subsidies to TSMC. These figures show that Big Business and the filthy rich consume the most electricity and receive the largest subsidies from the nation's coffers.

The gas price control system means a China Petroleum shortfall of 600 million NT per year. The price of electricity has been rising. Therefore Taipower estimates it will lose $1.1 billion this year, This year's electricity price freeze will cost $1.8 billion NT. If gas and electricity prices reflected costs, the treasury would not have to bear this $1.8 billion NT burden, Consider what this means. The money could then be used on people and society. It could expand social welfare, strengthen investment in education, improve technology and public investment. It could benefit the people as a whole. It could improve our national competitiveness. But as matters currently stand, it can do none of these things.

By now everyone realizes who the biggest beneficiaries of gas and electricity price freezes are. They are classic examples of "robbing the poor to pay the rich." How can we begin to speak of fairness and justice? These Big Businesses demand government subsidies. Electricity prices are kept artificially and unreasonably low for them out of political considerations.

Some businesses have been screaming that if gas and electricity prices increase further, they will not survive. But Taiwan's gas and electricity prices are among the lowest in the developed world, Even after they are hiked, they will still be among the lowest. If these businesses cannot survive, even with such low energy prices, it means they lack competitiveness and ought to be phased out. Moreover, in manufacturing, electricity accounts for only two to three percent of total capital costs. Even if the price of electricity increased 20%, it would only increase capital costs 4%. Its impact on business is limited. It definitely does not imply that capital costs will increase 20%. If a business cannot survive without taxpayer gas and electricity subsidies, it should be ashamed of itself. Why should taxpayers be compelled to underwrite such uncompetitive businesses?

The most important and most convincing reason to oppose unfreezing gas and electricity prices, is concern for the general public, particularly the underprivileged. This concern is justified. The government should look after the economically disadvantaged. The solution however, is simple. Within a certain range of energy consumption, prices would be kept low. The government currently sets the cap at 110 kWh. This would look after the disadvantaged. It would not increase their cost of living. If on the other hand, we freeze prices across the board. Big Business and the filthy rich will be the ones looked after. Artificially low prices would also lead to energy waste.

Therefore the government must offer a convincing policy. It must hike the price of gas and electricity, as soon as possible. Delays will only undermine China Petroleum and Taipower's fiscal health. The treasury will only have to make to make up a greater shortfall. The government must establish a gas and electricity pricing mechanism. It must take advantage of the opportunity to create a floating price mechanism. Officials on Taiwan lack courage. Elected representatives on Taiwan are populists who pander to the mob. The current rate hike has proceeded smoothly. But one day a smooth rate hike will no longer be possible. Every rate hike will become a major political and social crisis. The problem must be solved, once and for all,Gas and electricity prices are a political football that must be solved, once and for all. Give us a floating price mechanism.

中時電子報 新聞
中國時報 　2012.03.20
社論－豈有小市民補貼大企業的道理
本報訊

如果有人主張，讓小市民去補貼如台積電、鴻海、中鋼等大企業，去補貼富豪、有錢人，大概任何人都會強烈反對，民眾更會憤怒反彈，讓政府不敢如此做。但可知現在的油電價格凍漲、緩漲機制，就是這麼一個「小市民補貼大企業、富豪」的制度。因為看不透這個事實，現實上反而是政府想解除凍漲，外界反對。

台電、中油是公營企業，賺錢是繳回國庫，虧損則是最後終究要由國庫補貼。換句話說，油、電價格壓低，讓中油、台電虧損，其實就是拿國庫─也就是納稅人的錢去補貼用油、用電者。如果這個補貼過程就如一些社會福利制度一樣，是一個正向的所得重分配─即把多一點的錢從有錢人手上移轉到弱勢者身上─也罷，但遺憾的是油電價的補貼，卻正好是一種逆向的所得重分配；它把小市民繳交的稅做移轉補貼，但卻是企業、富豪拿得多，經濟弱勢者分得少，而且少得可憐。

讓我們看一些數據吧。如果台電的發電成本是一百元，工業用電與民生用電價格大概在七十多元，也就是說政府給予工業用電與民生用電同樣接受廿多元的補貼，而且，民生用電的補貼還多一點哩，聽起來似乎一般民眾受惠較多。不過，再看另一個數據，一般家庭平均每個月用電大概是三百五十度，但一個大型工商業用戶，一個月的用電度數平均是七百萬度─大概是一般家庭的二萬倍；富豪家庭每個月用電度數也都在萬度左右，也是小市民的三十倍左右。

至於超大型企業用電量之龐大就更不在話下了，每個月是以數億元計。中鋼去年電費支出四八．六億，如果繼續涷漲，今年納稅人給中鋼的電費補貼至少十億元。台積電的電費占營收約三％左右，以一年四千億營收計，一年電費支出一二○億；凍漲則今年納稅人補貼台積電約廿五億元。這些數字非常明顯看得出，規模越龐大、用電量越多的企業、富豪，得到國庫的補貼就越多。

中油因為油價緩漲機制，一年要短收六百億元；台電因為電價凍漲，加上燃料成本一直漲，估計今年要虧損一千一百億元，今年油電凍漲的成本是一千八百億元。如果油電反映成本，國庫不必負擔這一千八百億元，想想：這可以為民眾、社會做多少事？增加社會福利、加強教育投入、提高科技及公共投資…，這些都能讓全民受惠、提高國家競爭力。但現在，都沒有了！

看到這裡，大家應該知道油電凍漲，最大的受惠者是誰了吧？這種補貼，算是標準的「劫貧濟富」，有什麼公平正義可言？更何況，也不是這些大企業要求政府補貼，而是電價在政治考量下，人為、不合理的被壓低。

雖然也有部分企業高喊：油電再漲，企業就活不下去了。但台灣的油、電已經是主要國家中幾乎最低者，即使調漲後還是最低者。這些低的能源價格都無法生存的企業，代表其根本缺乏競爭力，該被淘汰。更何況在製造業中，電費占成本的比重大概只有二到三％不到，即使電價漲兩成，對其成本的增加也只有○．四％，其影響應在企業承受範圍內，更絕對不是一般直覺性聯想的「成本漲兩成」。如果一個企業須靠納稅人補貼油電費用才能生存，豈不汗顏？納稅人有什麼義務要養這種沒有競爭力的企業？

反對油電價格解凍，最重要、也最有說服力的理由是：擔心影響一般民眾─特別是弱勢者的生活。這個擔心有道理，政府也該照顧經濟弱勢者，解決方式更簡單，一定度數內的基本用電量完全不調漲─政府目前的方案是訂為一一○度內，這樣就能達到照顧弱勢、不增加其生活成本的目的。如採取一律凍漲方式，我們可發現其實被「照顧」補貼最多者，反而是企業與富豪。更別提這種刻意壓低價格造成的能源浪費了。

因此，政府應該展現良好的政策說服力，不僅應該儘快調漲油電價格，因為慢一天調，中油台電的財務就傷得更重，也代表國庫未來要「回補」的金額就更多；而且，這次就該建立一套油電價調整制度。如果不趁這次建立浮動調整機制，以台灣官員的缺乏擔當、民代的民粹習性，這次即使順利調漲，未來還是要碰到無法再調漲的問題，搞得每次電價調整都成為「重大政治與社會事件」。要一勞永逸、永遠解決油電價的「政治問題」，就給我們一個浮動機制吧！