Delayed Price Hikes Will Only Invite Harsher Criticism
China Times editorial (Taipei, Taiwan, ROC)
April 11, 2012
Summary: Gasoline and electricity price hikes and general price inflation are exerting pressure on the government. President Ma Ying-jeou, who is currently visiting our African allies, held a press conference, during which he quoted the late President Chiang Ching-kuo, "Inaction today means regrets tomorrow." He stressed the need to be prepared, to stand behind the Executive Yuan, and to be prepared for the flak directed at him. The government can do it, and is resolved to do it. But besides taking flak from the outside, government ministries must also support the administration's policies. They must minimize the inevitable public grievances.
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Gasoline and electricity price hikes and general price inflation are exerting pressure on the government. President Ma Ying-jeou, who is currently visiting our African allies, held a press conference, during which he quoted the late President Chiang Ching-kuo, "Inaction today means regrets tomorrow." He stressed the need to be prepared, to stand behind the Executive Yuan, and to be prepared for the flak directed at him. The government can do it, and is resolved to do it. But besides taking flak from the outside, government ministries must also support the administration's policies. They must minimize the inevitable public grievances.
Taiwan is a democracy. Frequent elections, large and small, make the government susceptible to public pressure. Over the next two years, no elections are scheduled. The government should be able to ignore political demagoguery and do the things it failed to do over the past few years. Two years ago, legislators passed a resolution on whether to hike or freeze the price of gasoline and electricity. It forced the government to squander tax money subsidizing underpriced gasoline. These subsidies were underwritten by the taxpayers. They benefitted the largest users of gasoline and electricity. This was utterly inconsistent with social justice. Most people do not understand the irrationality of government subsidies for gasoline and electricity. But the government and Big Business understand only too well. Global crude oil prices are soaring. The global political situation is precarious. Pressure from rising gasoline prices has not eased. There are even signs of further deterioration. Therefore the government cannot delay price hikes indefinitely.
Rising gasoline and electricity prices are not just the government's problem. They are everyone's problems. As President Ma noted, the government has made some carbone reduction commitments to the international community that are going to be difficult to meet. Taiwan is no longer an economic entity the global economy can ignore. If the government fails to do an adequate job, it Is likely to become the target of international retaliation, even the target of sanctions. The public finds it easy to recite mantras about environmentalism and saving the planet. But carbon reduction cannot remain a mere slogan. It must become a responsibility the public is willing to assume. As long as we save electricity and save gasoline, gasoline and electricity price hikes can be delayed.
Gasoline and electricity prices must be hiked. Water prices are also too low. A price hike for water is long overdue. Minister of the Interior Hong Yuan-lee put it bluntly. The price of water must also be hiked. But whether the price of water is hiked, the public must continue conserving water.
China Petroleum has been criticized for many years. The current price hikes offer a rare opportunity to address problems with Taipower personnel performance. Take a random example. The Ministry of Economic Affairs has already ordered China Petroleum and Taipower to reduce transactional costs and procurement costs. Personnel costs must be lower than they were over the past three years. They must effectively control personnel costs. Even high-level officials may no longer ride business class. Special privileges for China Petroleum and Taipower employees may be abolished. They must save at least $2.5 billion per year. Even more meaningful measures must be implemented. In the past China Petroleum, Taipower, and other state-owned enterprises had to cope with a variety of "good neighbor" demands from elected representatives. Wang Ying-chieh, chief representative of the Petroleum Business Improvement Team, recently met with TaiPower and China Petroleum. Wang spoke frankly. saying this practice must be abolished. State-owned enterprises must be able to stand tall and say no to elected representatives and to demands for subsidies by local governments. Ruling and opposition legislators must not be permitted to denounce price hikes even as they demand special privileges. As the ruling party. the KMT must take the lead in persuading legislators to divest themselves of their old habits. Otherwise state-owned enterprises should be required to disclose which legislators demanded so-called "good neighbor" treatment, and the sums involved. This will enable the public to know which legislators exerted undue pressure.
The government is a unified entity. The Central Government is calling for price hikes. But it is making a concerted effort to resist price hikes. Taichung Mayor Jason Hu hopes to set up an anti-price hike connection. This does not mean it is singing a different tune than the Central Government. The Central Government has its policies. It has a set of universal standards applicable to all. Use less electricity and your electricty rates will be lower. Use more electricty and your electricity rates will be higher. Local governments can implement the same effective energy-saving measures. They can even rally the public and urge them to resist the price hikes. For the big box stores, the smaller the price hikes, the greater the sales volume. This is advantageousl to revenues. People must learn to care more. They must minimize the impact of price hikes.
This time the presidential and legislative elections were held simultaneously. A four month gap separates the election and May 20. These four months leave little time to waste. The major issues were decided before May 20th. But public approval of the Ma administration and the cabinet have fallen sharply. The opposition even doubts Sean Chen's ability to remain in office until May 20. Fortunately President Ma and Premier Chen are psychologically prepared for the fickleness of public opinion. The less President Ma is afraid of poll numbers before May 20, the day of his official inauguration, the more the government will have the guts to do the right thing. With the support of the President, the Chen cabinet should not to shrink from doing the the right thing, We ask only that they proceed with speed and efficiency, They must not delay their decision-making. As long as the government is confident, it can restore public confidence.
Inaction today means regrets tomorrow. It means one will be criticized even more harshly later on. As a democratically elected president serving his second term, President Ma is playing his proper role. He now realizes that blindly currying favor with the public is not what a government should do. On the contrary, "If I am criticized, I am willing to to accept it. Because that was my role to begin with." That is how political leaders should lead. President Ma is now prepared. The Chen Cabinet should have a running start.