The following is a translation of select portions of the premier's report.
Speaker You, Deputy Speaker Tsai, esteemed members of the Legislature:
I would like to express my gratitude to the three previous premiers—Lin Chuan, Lai Ching-te and Su Tseng-chang—who during their time in office promoted energy transition, the Long-term Care Plan 2.0, policies to counteract declining birth rates, tax cuts with tangible impact, pension reform, regional revitalization, forward-looking infrastructure and the "five plus two" innovative industries plan. They strove to fulfill President Tsai Ing-wen's vision for the nation, and to lay the foundation for a stronger Taiwan.
The COVID-19 pandemic swept the world at the start of 2020 and its effects are still felt today, with major shocks to the global economy, people's livelihoods and industrial supply chains. However, Taiwan was able to demonstrate resilience and its economy greatly outperformed the vast majority of other countries during the pandemic. This was thanks to appropriate pandemic prevention measures, as well as the government's deployment of policies long beforehand to improve the investment environment and return capital to Taiwan—such as the "five plus two" innovative industries plan, the Six Core Strategic Industries plan, and the Three Major Programs for Investing in Taiwan—in addition to various other measures to bolster forward-looking infrastructure and expand domestic demand. As a result, Taiwan's economic growth rate reached 6.53% in 2021, the highest in 11 years.
Taiwan also continues to receive international acclaim for its consecutive high rankings for global competitiveness, clean governance, democracy, press freedom, economic freedom and sovereign credit rating in various global indexes. In February 2022, Taiwan ranked No. 1 globally in the Nikkei COVID-19 Recovery Index published by Nikkei Asia. In the 2022 Index of Economic Freedom published that same month by U.S. think tank The Heritage Foundation, Taiwan entered the "Free" category for the first time, ranking No. 6 globally and being the only such country with a population over 20 million.
The following April, S&P Global Ratings raised Taiwan's sovereign credit rating to AA+, Taiwan's highest rating in 21 years. In June, the Swiss-based International Institute for Management Development released the World Competitiveness Yearbook 2022, in which Taiwan placed seventh out of 63 economies surveyed, climbing for the fourth straight year to achieve its best performance in nine years, and ranking No. 1 globally for the second consecutive year among economies with a population over 20 million. Finally, in January 2023, Transparency International published the 2022 Corruption Perceptions Index, where Taiwan placed 25th out of 180 countries and territories surveyed, its highest ranking since the index began publication in 1995.
For the past six years and more, the government's administration has been steady and its finances robust. We continue to push for higher salaries, lower taxes and increased social benefits, from young to old, from home to classroom. The government has also maintained strict fiscal discipline. The central government's general budget has run a surplus for five consecutive years, with the annual surplus exceeding NT$100 billion (US$3.3 billion) for four consecutive years. Surplus revenue in 2021 reached nearly NT$300 billion (US$9.9 billion) and last year's surplus is anticipated to set a record high.
Taiwan currently faces the same task as the rest of the world's nations, that of rebuilding an economy and society in the post-pandemic era. Taiwan's achievements in fighting the pandemic, made possible through the cooperation and unity of all its people, garnered widespread international recognition. However, the threat of the Omicron variant since last year has struck a blow to many small and medium-sized enterprises (SMEs) and street vendors, and the lives of certain socially vulnerable groups have become fraught with economic difficulties. A faltering global economy has furthermore caused a marked drop in export orders in certain industries late last year. These are all issues that call for greater support from the government.
Because Taiwan has had strong overall economic performance in the past few years and the government has exercised strict fiscal discipline, tax revenue has been surpassing budget forecasts and the accumulated surplus can be put toward serving the future developmental needs of the nation. Therefore, the Executive Yuan on January 12 approved a special bill to boost economic and social resilience and share the proceeds of growth in the post-pandemic era. We hope at this key juncture to share the benefits of economic growth with the public, accelerate the post-pandemic recovery, and strengthen care for the industries and people who were more greatly impacted by the pandemic.
This year remains full of challenges. Facing down the repercussions of the Russia-Ukraine war, pressure from global inflation and rising interest rates, geopolitical instability, climate change and shifts in international political and economic conditions, we are devoting full efforts to achieve the four main priorities entrusted to us by President Tsai:
1. Gradually adjusting pandemic measures to return greater normalcy to people's lives and continuing steady progress into a new era of post-pandemic recovery.
2. Executing a comprehensive review of the social services system and introducing new innovations, covering issues from childrearing to long-term care, rents to mortgages, student loans to labor shortages, and extending to public safety, road safety and information security.
3. Upgrading national infrastructure and continuing to promote the fourth phase of the Forward-looking Infrastructure Development Program. Comprehensively improving the environmental infrastructure of farming and fishing villages, boosting the competitiveness of SMEs and assisting the transformation of traditional industries.
4. Continuing to promote the Six Core Strategic Industries to foster more competitive research and development in next-generation technologies.
My newly appointed Cabinet team is implementing these wide-ranging initiatives with all possible speed, building a compassionate and resilient Taiwan, resilient enough to meet the many challenges we'll face at home and abroad over the next 10 years while maintaining a competitive edge.
I would now like to deliver my report on the Executive Yuan's recent policy achievements and implementation efforts.
A resilient economy with sustainable development
To bolster economic development and resilience, the government continues to implement the Three Major Programs for Investing in Taiwan to drive investment and accelerate the new construction or expansion of science parks and technology industrial parks. The government is also promoting the Six Core Strategic Industries to advance R&D in forward-looking science and technology, constructing more competitive environments and consolidating Taiwan's critical position as a leader in global science and technology.
To cultivate, recruit and retain talent, the government has set up 11 specialized colleges for research in fields related to key national industries, directly fostering the skilled personnel required by those industries. The government has issued over 6,000 Employment Gold Cards to facilitate the hiring of outstanding skilled professionals from foreign countries in fields including semiconductor technology, offshore wind power, finance, arts and culture. The government has also implemented a program for long-term retention of migrant workers, designed to keep a pool of experienced and high-quality foreign skilled talent in Taiwan.
The government last year initiated a plan to raise the overall competitiveness of SMEs, which will invest nearly NT$100 billion (US$3.3 billion) over a five-year period to help SMEs undergo digital transformation, advance innovative R&D, and strengthen their capabilities in industrial technology and sustainable production. A portion of the proposed special budget for post-pandemic recovery will also be allocated to assist SMEs in adopting smart technologies and low-carbon business models, and to develop necessary infrastructure for SMEs. The special budget will also provide project loans to help SMEs maintain stable operations, retain talent and introduce transformative upgrades.
The government continues to improve benefits from the Green Environmental Payment Program to safeguard Taiwan's agricultural production, and has already invested more than NT$20 billion (US$657.8 million) to mechanize agricultural work, modernize agricultural equipment and create a nationwide cold chain logistics system. Nearly NT$10 billion (US$328.9 million) has been invested to improve port facilities for distant water fishing vessels, and to boost workers' earnings by raising the export capacity and international competitiveness of agricultural and fishery products. The government also plans to actively invest in stronger water resource infrastructure for the agricultural industry, as well as improving local agricultural roads and facilities for poultry, livestock and aquaculture, thus building a more resilient environment for agricultural development.
The United Nations' Sustainable Development Goals have become important policy targets for many countries around the world. Taiwan's government is actively investing in renewable energy sources. Last year saw the addition of 2.5 gigawatts (GW) of solar power generation capacity, the most ever installed in a single year. Installation of 191 offshore wind turbines has already been completed, with an additional 2.2 GW of wind power from wind farms connecting to the power grid this year. The total output of Taiwan's renewable energy sources last year reached 20 billion kilowatt-hours, contributing a historic high of 8% of the nation's total energy supply. Moving forward, the government will continue to accelerate the overall development process for green energy, ensuring a stable energy supply while at the same time achieving the goal of reducing air pollution and carbon emissions.
Net-zero carbon emissions is a shared goal for global environmental sustainability and is important for strengthening Taiwan's environmental resilience. Last March, the government officially published a plan for Taiwan's Pathway to Net-Zero Emissions in 2050, and on January 10 this year, the Legislature passed the third and final reading of the Climate Change Response Act which incorporated the target of net-zero emissions by 2050 into law. In fact, the first document I officially approved as premier was a four-year plan outlining the path to reach net-zero carbon emissions, which allocates an estimated budget of NT$74.3 billion (US$2.4 billion) from 2023 to 2026, and proposes various carbon reduction methods and adjustments to bring domestic industries and related areas smoothly into alignment with international benchmarks.
A compassionate nation that cares for its people
The government is introducing comprehensive innovations to the social services system, building an environment of peace and prosperity for all. In the area of public safety, the government continues to strengthen sweeps for illegal drugs to protect people's health and lives, and is promoting strategic guidelines to crack down on new types of fraud, seeking out and eliminating them at their source while enforcing strict criminal penalties. We're also devoting full efforts to rooting out criminal gangs and toughening confiscation of illegal firearms.
The government is dedicated to upholding road and traffic safety. We'll continue to promote a variety of safety initiatives to reduce traffic accident fatalities, prioritizing the pedestrian right of way as the central focus in enforcement, administration, public awareness and the road environment itself.
Information security is national security. To guarantee our safety, the government will continue to enhance the nation's digital resilience and information security systems. The National Institute of Cyber Security was inaugurated on February 10. This non-departmental public body will facilitate the training of practical talent, promote the application of new security technologies and strengthen preparations to deal with serious information security incidents.
The Executive Yuan is now actively formulating the establishment of an independent supervisory mechanism for the protection of personal data. In addition, complementary amendments to the Personal Data Protection Act and the Cyber Security Management Act are being advanced that will raise penalties for breaching personal data, expand the scope of liability, and strengthen the responsibility and requirements of public and private sectors to protect personal data.
This is the seventh consecutive year that the minimum wage has been raised since President Tsai took office, and the sixth consecutive year that the tax-deductible allowance for basic living expenses has increased. Since 2016, the monthly and hourly minimum wages have risen by 32% and 47%, respectively. We will continue to strengthen support for working-class individuals and families.
To reinforce protections for farmers and fishermen, the government in recent years has promoted four welfare measures for agricultural and fishery workers—farmers' health insurance, occupational hazards insurance, agricultural insurance and a pension savings system—and we launched a rice insurance scheme beginning with the first rice crop of 2022 that provides a basic guarantee for the livelihoods of rice farmers. In January this year, the Legislature passed the third and final reading of amendments to the Farmer Health Insurance Act, enabling substantial increases to the maternity benefits and funeral allowances provided by insurance.
I would like to thank the esteemed Legislature for passing the final readings of the central government's 2023 general budget on January 19, and the special budget funding the fourth phase of the Forward-looking Infrastructure Development Program last December 30. More budget has been allocated this year to policies for education, long-term care and counteracting low birth rates than ever before in the nation's history. We will continue to dedicate ourselves to advancing measures that lighten people's burdens, showing empathy for the hardships of caregivers and married and childrearing households.
The government is currently implementing the five-year NT$40.7 billion (US$1.3 billion) second phase of its program to strengthen Taiwan's social safety net. The goal is to build a more robust family-oriented and community-based protective system that closes the gaps in community mental health providers and community support services to create a dense network of nodes that delivers government services to vulnerable people across society.
In February, the Directorate-General of Budget, Accounting and Statistics published data on the impact of fluctuating commodity prices which showed that Taiwan's consumer price index last year rose by 2.95%—lower than the eurozone's 8.4%, the U.S.'s 8.0% and South Korea's 5.1% for the same period. To prevent fluctuating commodity prices from impacting people's livelihoods and to lighten financial burdens, the government has taken prompt action to manage the situation by implementing a range of policies to stabilize prices. In addition to injecting funds into Taiwan Power Co. and providing electricity price subsidies, the government has also implemented controls at the source on energy and raw material prices, applying tax reductions on multiple occasions to key raw materials, including soy beans, wheat and corn.
In response to rising domestic interest rates and to lighten the burdens of vulnerable groups, the government has fully absorbed interest rate rises for worker relief loans, student loans, youth entrepreneurship loans and youth relief loans, as well as loans taken out under the indigenous peoples' development fund.
To ensure that all young people have a secure roof over their heads, the government has implemented a social housing plan that will deliver 200,000 social housing units over eight years. To date, 130,000 new homes and subleased or managed units have already been made available. Additionally, last year saw the introduction of a central government program that expands rental subsidies to NT$30 billion (US$986.7 million) and this year the application requirements were relaxed, reducing the minimum age from 20 to 18 years old and opening up applications to university students.
To reduce the burden on commuters, relieve traffic congestion, save energy and reduce carbon emissions, a central government plan has been formulated to promote public transportation access that will provide subsidies to commuters, as well as other measures for different regions to promote the use of public transport by commuters and tourists.
Last year, the government fully implemented its three-pronged school reform policy to install air conditioning in every elementary and middle school classroom across the nation, provide tablet computer access for elementary through high schools, and implement a system of central kitchens to support smaller schools. The government will continue to forge ahead with its plan to build digital learning environments, improve the quality of school meals, enhance the quality of higher education, and fully embed the protection and development of national languages in school curriculums, while also devoting energy toward raising the nation's English language proficiency.
To create a Taiwanese cultural brand, this year the government will continue to promote a range of cultural polices by focusing on legal and organizational aspects. We'll also use the post-pandemic special budget to provide cultural industries with a revitalization plan.
Taiwan is an ethnically diverse nation. The government will continue to promote indigenous historical justice and transitional justice, support the passing of ethnic languages to future generations and strengthen the resilience of economic and industrial development in indigenous communities. We will also continue our work to promote a renaissance in Hakka art and culture, stimulate the economies of Hakka village communities and promote the benefits of regional revitalization and cultural sustainability to Hakka communities. The government will forge ahead with empowering and improving the rights and care of new immigrants and their children, and strive to build a more tolerant, open and compassionate society for new arrivals.
A secure Taiwan with a global footing
On January 26, the Cato Institute and Fraser Institute's 2022 Human Freedom Index rated Taiwan the freest nation within Asia and on February 2, the Economist Intelligence Unit's Democracy Index 2022 rated Taiwan highest in Asia for a second year running.
Taiwan's democracy is our most precious asset. Taiwan's persistence in defending freedom, the rule of law, human rights and other universal values, in addition to its fearless resolution in the face of totalitarian aggression, has been essential to enabling the nation to attract the international community's attention and win global recognition in recent years.
Taiwan-U.S. ties have never been stronger, and Taiwan has achieved a series of important breakthroughs in our nation's relationship with Europe. Every year Taiwan hosts numerous heavyweight, increasingly high-level delegations from the U.S., Japan, the EU and other European nations. A growing number of countries and international organizations are more frequently taking these and other concrete actions to demonstrate their strong support for Taiwan. The government will continue to push for a more rapid timetable for Taiwan-U.S. trade talks and continue to foster ever-closer partnerships with like-minded democratic nations in order to jointly safeguard a free and open Indo-Pacific region and preserve the region's stability and prosperity.
The government strives to ensure that transitional justice concepts take root within society, human rights values are internalized in the minds of Taiwanese, and the nation's democratic system is consolidated. To this end, the Executive Yuan will implement national transitional justice educational action guidelines so that schools, public organizations and wider society can draw lessons from history and ensure that Taiwan never again heads down the path of violating human rights. In addition, a foundation to restore victims' rights infringed by illegal acts of the state during Taiwan's period of authoritarian rule was officially inaugurated on February 18.
To protect this beautiful nation and guarantee our freedoms and democratic way of life, in 2023 Taiwan will spend over NT$580 billion (US$19 billion) on defense in a clear demonstration of our will to defend Taiwan's sovereignty and safeguard national security.
To enhance Taiwan's self-defense capabilities, in addition to continuing with work to achieve defense autonomy, the government is also strengthening the nation's all-out defense system. Following the establishment of the All-out Defense Mobilization Agency in January last year, President Tsai personally oversaw the development of a plan to strengthen and recalibrate the national defense force structure. The plan strengthens the nation's defense capabilities by reorganizing the military into four main divisions: a main combat force composed primarily of military volunteers and a garrison force composed primarily of conscripts, as well as the preexisting civil defense system and reserve system. The plan also reinstates one-year compulsory military service, beginning in 2024.
To strengthen the public's psychological defenses and protect against cognitive warfare, the government will continue to develop systems to verify and rebut misinformation and disinformation. By making information more transparent and open, and educating all members of the public on how to establish the authenticity of information they receive, we can avoid falling into the trap of information warfare.
Democratic nations around the world share a high-level consensus on the maintenance of peace and stability in the Taiwan Strait. Taiwan's government will devote its efforts to maintaining this peace and stability according to the four commitments set out by President Tsai: our commitment to a free and democratic constitutional system, our commitment that the Republic of China and the People's Republic of China should not be subordinate to each other, our commitment to resist annexation or encroachment upon our sovereignty, and our commitment that the future of Taiwan must be decided in accordance with the will of the Taiwanese people.
Post-pandemic recovery for a resilient Taiwan
The government has prepared sufficient quantities of various pandemic-prevention supplies and antiviral drugs, while nearly 90% of the population has been vaccinated twice against COVID-19 and over 76% of the population has received a booster dose. In light of these achievements, the government is gradually relaxing anti-pandemic measures: reopening the nation's borders on October 13 last year, cancelling the outdoor mask mandate on December 1, easing the indoor mask mandate on February 20 and relaxing the indoor mask mandate for schools at all levels from March 6.
The government will take into consideration other countries' anti-pandemic measures and the timing of when foreign states of emergency are lifted for COVID-19, so as to better inform our own rolling review of when to appropriately relax isolation measures and reporting requirements, and downgrade COVID-19's classification as a notifiable communicable disease. We are committed to bringing the lives of Taiwan's people back to normal, thus facilitating a swifter post-pandemic recovery.
Following higher-than-expected tax revenues for fiscal year 2022, the Executive Yuan approved a special bill to boost economic and social resilience and share the proceeds of growth in the post-pandemic era and proposed an associated special budget with an upper limit of NT$380 billion (US$12.5 billion), of which NT$100 billion (US$3.3 billion) will be used to increase electricity price subsidies and meet shortfalls in Labor Insurance and National Health Insurance funds, and NT$140 billion (US$4.6 billion) used to provide every person with a one-off cash payment of NT$6,000 (US$197).
A portion of the remaining NT$140 billion (US$4.6 billion) will be divided across seven government departments to comprehensively strengthen the nation's post-pandemic economic and social resilience. Spending areas will include promoting the upgrade and transition of SMEs, expanding public transportation subsidies, accelerating the return of foreign tourists to Taiwan, upgrading agricultural infrastructure, reinvigorating the nation's arts and cultural industries, expanding goods bank locations, bolstering support for disadvantaged groups, providing care services, student and housing loans subsidies, and lightening people's accommodation burdens.
Cooperating together for a common happiness
Taiwan must unite if we are to build a compassionate and resilient nation. Whether national infrastructure projects, economic development or disease prevention, central and local governments must work hand in glove, and the government and the public must give each other their full cooperation.
As we embark upon this crucial phase of post-pandemic social healing and the rebuilding of a resilient economy, the Executive Yuan administrative team will strain every sinew to defend Taiwan, build up our homeland and bolster our national strength, to create a more compassionate society, a happier people and a more developed nation.