The Taiwan Banker

The quintuple vouchers will become the main axis of the government’s stimulus this year. Legislator Kuo Kuo-wen said that he is very happy about the vouchers. Only by benefiting every industry, instead of focusing on certain companies, groups, or industries, can there be a stimulus effect. Otherwise, the consequence is that “the government's well-intentioned policies cause industry imbalances and widen the gap between the rich and the poor.” The quintuple voucher plan was launched on August 26, including both paper and digital vouchers. Originally, they were patterned off of the triple vouchers of 2020, in which people could receive NT$3,000 for a payment of NT$2,000, thus tripling their investment. In this case, people can get NT$5,000 without first paying NT$1,000, so the name is no longer applicable, but it has stuck. Legislator Kuo: Stimulus must encompass universal development and universal benefits Many have asked, "Why not send cash directly?" Kuo pointed out that the Japanese government issued JPY 30,000 in cash, and the US issued at least US$2,000 per person. In the end, the savings rate increased, and the liquidity failed to flow into grassroots industries. The quintuple vouchers are structured to avoid this situation. It is hoped that they can bring effects to the grassroots within a limited time. International studies have also found that the greatest beneficiaries of government rescue and revitalization measures are zombie companies who face market elimination. Due to the rescue by the authorities, they may unexpectedly extend their lives and occupy resources; meanwhile, women, young people, and SMEs are squeezed out and cannot be revitalized. Therefore, Kuo believes that the stimulus coupons must be bottom-up in order to be effective. “As many as 100 companies were listed on Taiwan’s over-the-counter exchange this year. TSMC and MediaTek’s revenues hit record highs, and shipping stocks doubled their profits. But the bottom SMEs and micro-enterprises have been severely impacted by the pandemic, and many are fighting for their survival.” Thus, the profits of upper-level companies have not smoothly penetrated into grassroots industries. The quintuple coupons are allowing people to consume from the bottom up, which is a very important way to support the grassroots industries. Since the purpose of the stimulus is bottom-up power, fair rules of the game are key to the success of the policy. He said that the first point is universal distribution and use by all people. The second point is inclusiveness. Kuo pointed out that the vouchers are a type of quantitative easing. Currency is released in the hope that the liquidity protects grassroots industries for a long time. Without evenness and dispersion, however, it may lead to imbalanced industry development. He took last year’s sports tickets as an example. A quarter of them went to the sports chain Decathlon, which completely violated the original purpose of inclusiveness. It was unfair to other smaller sports-related stores and did not realize a revitalizing effect. Regarding promotion, Kuo said that the larger the chain groups and retail channel operators, the broader their marketing resources. Discounts to attract quintuple vouchers customers also discount the policy. “Many large retailers and chain store operators themselves can apply for industry relief from the government. On the other hand, they hold more abundant promotional resources than grassroots grocery stores and food stalls, and give quintuple voucher discounts. In this way, the vouchers are eventually concentrated in the hands of a few large companies.” He suggested that although the government cannot force large companies and chain operators to refuse the quintuple coupons, they can at least ask or morally persuade large groups not to use unfair resources to forcefully promote voucher funds. In short, the stimulus effect of the vouchers cannot be separated from the principles of universality and inclusiveness. Legislator Chung Chia-pin: A good time for micro-enterprises to upgrade their electronic payments The Executive Yuan included a digital version of this year’s quintuple vouchers. Legislator Chung Chia-pin believes that this is a great opportunity for many micro-stores to upgrade their electronic payments, in conjunction with the government's other auxiliary policies. The National Development Council stated that following the triple vouchers last year, the turnover of small vendors and SMEs increased by 20%-30%. This year, the Ministry of Economic Affairs will also adopt some plans to improve the digitization capabilities of small businesses, helping solve the problem of petty change. Legislator Chung pointed out that last year the government required merchants to register as businesses in order to exchange cash with the triple vouchers. As a result, some small businesses without tax and business registrations had to go to others with registrations to assist in cashing out. “The digital divide has led to the elimination of traditional industries. Small shops have become accustomed to the use of QR codes for contact tracing. Why not use this opportunity to promote their digital capabilities?” Chung said that according to estimates from the Ministry of Economic Affairs, there are about 530,000 unregistered small businesses in Taiwan. “In light of this situation, the government is pushing small businesses to register, and it will absorb the fees required for doing so.” How can this policy of stimulus vouchers drive industrial upgrades? He explained that an electronic payment architecture requires three major elements: a telecom provider, cloud backend, and payment system. First, the shop gets the promotion voucher, which is received by the telecom company; second, it fills in a Ministry of Economic Affairs form. At the end of the voucher period next year, the government pays the telecom connection fee, negotiating a group purchase price. In addition, the Ministry of Economic Affairs can provide incentives and subsidies. Micro-enterprises must pay business registration and transaction platform fees to receive the vouchers, which can be absorbed by the Ministry of Economic Affairs until the expiration of the vouchers. “Suppose the Ministry of Economic Affairs spends 10,000 yuan on a micro-enterprise. This is equivalent to transforming it into a company with business registration. Second, these stores have also cultivated electronic payment capabilities, upgrading their automation.” Chung estimates that out of the total of 930,000 operating companies to receive benefits, 320,000 are small stores. At present, 300,000 stores have been approved by the Department of Commerce, and nearly NT$40 billion has been issued. If the ratio of micro-shops is one-third, that would make 100,000. If each of them receives one-time stimulus of NT$40,000 yuan, the total is only NT$4 billion, amounting to one-tenth of the NT$ 40 billion. In other words, the government only needs to spend NT$300-400 million to install electronic payments in these small shops that have applied for and received NT$40,000 yuan in bailout money. (The installation of Taiwan Pay, together with 6 months worth of transaction fees, costs about NT$3,000-4,000 yuan for each company). Chung said that when the promotion vouchers expire next year, such stores can negotiate with payment providers and telecom operators to renew their contracts, a win-win outcome. The vouchers exert not only a currency multiplier effect, but also a policy multiplier effect. Legislator Lin Chu-yin: The arts and cultural industries also urgently need the quintuple vouchers “Originally, I was invited to appear in The World Between Us at Storyworks, but due to lockdowns, the schedule has been repeatedly postponed from May, and the performance at Metropolitan Hall was pushed back to August. Now it’s been announced that it will be postponed again to December.” Lin related that resumption of work and income of many staff in the theater might be delayed again. She said that there are many special situations in the arts and cultural industries. For example, stage performances must be booked in advance. If the schedule is changed, reconfirmations are necessary. This means that physical performances and exhibitions have suffered severely in this wave of restrictions. “Some have asked why the Ministry of Culture supports arts and cultural groups for six or eight months. But what the outside world does not understand is that many companies in this industry may only put out one new production a year. When performance dates are repeatedly delayed, the damage is serious.” Lin said that the quintuple vouchers will bring relief to many small and medium-sized grassroots catering, retail and other companies. Meanwhile, although the Ministry of Culture has also announced rescue and revitalization measures for the arts and cultural industries, many grassroots workers in this industry are in a gray area, neither helped by the vouchers, nor by Ministry of Culture measures. “Many of the troupe crew and staff I know are now working food delivery, Uber Eats, and foodpanda.” Lin noted that many in the arts, film and drama industries are the type who take freelance work. Makeup artists for TV stations, or directors, screenwriters, photographers, makeup artists, or hairdressers of production companies may not belong to any company, and their labor and health insurance is also linked to the labor union. They can only wait passively. Only when the troupe receives stimulus do these staff also receive it. Moreover, some larger event companies operate by holding concerts every year. Not to mention it is difficult to hold concerts in Taiwan, or even internationally. What about the livelihoods of lighting engineers, photographers, and sound controllers? Lin is concerned that after receiving a voucher, many people will first consume what they eat, wear, and use. In the end, there won’t be much credit left for the arts. Nevertheless, she has a solution. “We can think about extending the use period and space for these arts and cultural groups. For example, the local government can play an important role in encouraging support.” In the end, regarding the possibility of digital vouchers overweighting the arts and literature circles and how to create profit and operating models for arts and literature groups under the online performance model, Lin suggested that “while revitalizing all industries, don’t forget the arts!”