Lai address ‘five shortages’ with a message to business leaders

Premier Lai Ching-te attends a medical conference in Taipei on Nov. 11, 2017. The premier this week outlined plans to address issues concerning business leaders while delivering a message aimed at reassuring them and reminding them that the responsibility of improving Taiwan's economic growth also falls on their shoulders. (CNA)

TAIPEI (CNA) – Premier Lai Ching-te (賴清德) this week outlined plans to address issues concerning business leaders while delivering a message aimed at reassuring them and reminding them that the responsibility of improving Taiwan’s economic growth also falls on their shoulders.

The Chinese National Federation of Industries (CNFI) in 2015 coined the term “five shortages” to characterize the business climate in Taiwan, referring to the lack of land, water, power, skilled workers and manpower.

CNFI reiterated its concerns in its White Paper last year and in July this year, and said that after the Democratic Progressive Party came to power, not only have the problems not been resolved, the investment environment has deteriorated.

In response, Lai put forth a strategy for addressing the issues in five days this week from Nov. 6 to 10 except Nov. 9 when he finalized revisions to the five-day workweek rule which business groups have blamed for disrupting business operations and stifling investment.

Two months after becoming premier, Lai took the criticism from business leaders head on to show his resolve that the government would be responsive to their needs.

But Lai also requested that business leaders do their part to spur economic development by scaling up investments, raising wage rates, sharing profits with employees, and investing in talent cultivation, upgrading and innovation.

In concluding the weeklong campaign at the press conference on Nov. 10, Lai said that the government faces the five issues squarely, will put forward pragmatic approaches and implement the policies steadily.

“We want to work together with businesses that are looking to invest in Taiwan, but there is no denying the fact that we need their strong support,” Lai said, adding that businesses should speed up investment to provide impetus for growth and make profit-sharing arrangements.

Lai then called on businesses, listed companies and Taiwan-based multinational corporations in particular, to increase monthly starting salary for employees they hire to above NT$30,000 (US$988).

Earlier at the press conference, Lai said that the government has proposed policies aiming at making up manpower shortfall, but when it comes to this issue, industrial upgrading and innovation capability are also issues must be addressed. “We must make sure that businesses get that,” Lai said.

Strategies to address land shortage On land shortage issues, Lai said that the demand for land in the industrial sector is expected to grow by 1,266 hectares in 2022. He set out three major strategies aimed at freeing up to 1,442 hectares of land to meet the demand.

The first strategy is to make available 806 hectares of public land at preferential rates.

State-run Taiwan Sugar Corp’s (Taisugar) farm land is exempted from the planned area, mostly in southern Taiwan, because the government’s recent proposal to convert its idle land into small-scale industrial projects under 10 hectares remains mired in controversy over land acquisition and environmental concerns.

Its second strategy is to enforce the recently-amended law which requires owners of land purchased from a government-developed industrial park to put the land to industrial use within two years if it has been left unused for three years.

After that period, the government will levy a fine on the owner and put the land up for auction. It will also tighten land speculation to encourage the efficient use of land.

The third strategy is to set up new industrial parks or offer incentives for factories to expand by building their facilities higher rather than seeking out new land.

Addressing water shortage On water shortage, the first three of the four-part policy package consist of a slew of measures that are being implemented or planned under the “Forward-looking Infrastructure Development Plan.” The fourth part is to build more emergency backup water supply systems to enhance supply resilience.

The new initiative, coupled with the existing policies to create new sources of water, fix leaking pipes, encourage water conservation, and facilitate water allocation mechanisms, would ensure a stable water supply for the industrial sector and resolve regular shortages once and for all by 2031, Lai said.

With Taiwan Semiconductor Manufacturing Co. planning to install a 3nm fab in Tainan and Winbond Electronics Corp building a 12-inch memory chip plant in Kaohsiung, the increased demand is expected to add stress to the already strained water supply. But the government is focusing on the effectiveness of water conservation measures in southern Taiwan.

Lai has vowed to step up leakage reduction work in Chiayi, Tainan, and Kaohsiung, aimed at reducing the water leakage to 10 percent in 2027, 2019, and 2022, from the present 14.67 percent, 10.51 percent, and 12.28 percent respectively.

The goal is to reduce the nationwide leakage rate of 16.63 percent, which amounts to three times the water capacity of Shimen Reservoir, to 10 percent by 2031.

Another main measure for water conservation is to provide subsidies for rice farmers who are willing to let land lie fallow or grow grains instead in dry seasons, Lai said.

Ensuring stable power supply Regarding power supply, Lai said he has three policy objectives: to ensure a stable power supply beginning in 2019, to phase out the use of all nuclear reactors by 2025 as President Tsai Ing-wen (蔡英文) has promised, and to improve air quality.

Lai presented an energy transition road map showing that nuclear power reactors and oil-fired power stations will be decommissioned by 2025 and replaced with natural gas-fired generators, and renewable energy from solar, wind and other sources, which will account for 50 percent and 20 percent, respectively, of Taiwan’s energy supply.

The remaining 30 percent will be from coal-fired power, which will be down from the present 36.9 percent. Lai did not comment on criticism that carbon emissions have increased since the plan was implemented due to the increased use of coal-fired power.

Lai said that the expected increase in natural gas-fired generating capacity would give the government much leeway to adjust the types of fuel used by fuel-fired generators to reduce air pollution when necessary.

Lai said he was worried that the delays in constructing the liquefied natural gas (LNG) receiving terminal in Taoyuan’s Guantang Industrial Park due to environmental concerns could push back the schedule for installing two new natural gas generators and thus disrupt power supply in northern Taiwan.

He has vowed to make sure that construction of new power plants would proceed on schedule to ensure a steady supply of electricity for continued economic growth.

Measures for talent recruitment On the shortage of skilled workers, the government has proposed amending the Income Tax Act to give tax incentives to enterprises to help them compete for talent from abroad and retain local talent.

It also proposed revising the Company Act for companies to provide equity awards to employees in subsidiaries to help with recruitment and retention.

The government also proposed easing regulations on employing foreign specialists to enhance talent exchange between Taiwan and countries covered by the New Southbound Policy. The measure would be applied to Taiwanese companies within the “five plus two” innovative industries initiative.

As for the lack of manpower, the government has formulated policies to increase the labor participation rate of certain groups at home, instead of increasing quotas for businesses to recruit migrant workers.

The government said that the labor participation rate for women, youth aged 15 to 29, and people in the 45-64 age bracket are relatively low, while the quotas permitted for recruitment of migrant workers are still available.

Meanwhile, Minister without Portfolio Lin Wan-i (林萬億) said that the government has begun reviewing its immigration policy to allow foreigners working in Taiwan to reside here permanently.

Lin said that the policy would not be restricted to professional talent only but will be related to migrant workers in specific sectors, such as agriculture, fishing, and the long-term health care sector.

By Shih Hsiu-chuan