Come January the people of Taiwan will have money to burn if their government’s latest plan to boost the flagging economy meets approval.
In an attempt to inject life back into the country’s stalling financial system, each of Taiwan’s 23 million residents look set to receive T$3,600 (£67) worth of redeemable shopping vouchers to spend in restaurants, supermarkets and other registered retail stores before the end of 2009.
Individuals who choose to donate their vouchers will be able to apply for tax deductions.
Prime Minister Liu Chao-shivan has resorted to this rather inventive approach after a 5.6billion US dollar economic stimulus package and four cuts to central bank interest rates over the last month did little to restore consumer confidence.
The plan is set to cost the Taiwanese government T$86billion and is expected to generate a 0.64% increase in gross domestic product in 2009 as a result. However, although initially approved by Mr Liu’s cabinet, the scheme has come under much criticism.
Analyst at President Securities, Johnny Lee commented: "I can't see that the programme will have much impact on the GDP. If people can't make their ends meet, they won't be encouraged to spend more just by getting the vouchers,
"I think the government should focus on long-term plans to boost consumer confidence, such as lowering commodity prices, improving job securities and reviving the economy"
Head of the Far Eastern Group, David Hsu, also added "I support it as it can stimulate some (spending) but it's not an elixir".
However, speaking at a press conference earlier today Mr Liu justified his plans:
"The worldwide economy will probably be in a downturn for a while, so the coupons are necessary to support us during that time,
"The programme is aimed at boosting the economy"
