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Premier Su Tseng-chang's oral policy report to 8th session of 9th Legislature

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The following is a translation of the main points of the premier's report.

Speaker Su, Deputy Speaker Tsai, members of the Legislature:

In the eight months since I took office, the Cabinet team has endeavored diligently to solve the nation's problems by promoting what is beneficial and eliminating what is harmful. Through concerted efforts by the government and the citizenry, Taiwan's economy grew 2.4 percent in the second quarter of this year, outpacing South Korea (2.1 percent), Hong Kong (0.5 percent) and Singapore (0.1 percent). We not only exceeded expectations, but placed first among the Four Asian Tigers.

Taiwan also delivered a string of successful performances on the international stage. This past March, Taiwan was removed from the European Union's list of non-cooperative tax jurisdictions, ensuring the rights of our businesses to invest and compete in EU member states. In June, we were taken off the EU's illegal fishing watch list, affording greater protection to Taiwan's annual NT$40 billion (US$1.3 billion) fishing industry as well as peripheral industries worth nearly NT$100 billion (US$3.2 billion) per year. And in July, Taiwan became a participating fishing entity in the Southern Indian Ocean Fisheries Agreement, with the ability to exercise decision-making authority alongside the agreement's nine contracting parties (including the EU, Japan and South Korea) concerning the use and management of fishery resources in the southern Indian Ocean.

Also in July, we marked a full year since the cessation of the foot-and-mouth disease (FMD) vaccination program in the pig farming industry. Having recorded no cases of FMD during that observation period, we applied to the World Organisation for Animal Health for status as "FMD-free where vaccination is not practiced." If the application is approved next May, Taiwan will become the second FMD-free country in East Asia after Japan, and we will be able to resume exporting pork products around the world.

Last month, the Asia/Pacific Group on Money Laundering adopted an evaluation report on Taiwan's anti-money laundering regime, confirming the nation's placement in the "regular follow-up" category. Our rise to this most favorable review category is certain to bring significant benefits to the financial industry and the nation overall.

All of these outstanding achievements have been made possible through close collaboration between the people and the government. Now, I'd like to report on the Executive Yuan's recent work in policy implementation and the outcomes of that work.


Boosting the economy through practical action
As the trade war between the U.S. and China continues to rattle trade and financial markets around the world, we've rolled out three major programs to boost investment in Taiwan: an action plan to bring back investments from overseas Taiwanese businesses, an investment acceleration program for companies that have remained in Taiwan, and a similar program for small and medium-sized enterprises. The overseas Taiwanese businesses action plan has met with an overwhelming response from the community, with 134 companies approved so far to invest nearly NT$600 billion (US$19.3 billion) in Taiwan, which altogether will create more than 50,000 jobs.

Thanks to support from the Legislature, the Statute for Industrial Innovation was amended in July, extending tax incentives 10 more years, creating tax breaks for investments in smart machinery and 5G technology, and encouraging companies to invest their earnings in tangible assets. These changes will create a stable business environment where companies can invest, innovate and expand with greater confidence. The Management, Utilization, and Taxation of Repatriated Offshore Funds Act also took effect August 15, providing tax benefits for individuals or profit-seeking enterprises who send offshore funds back to Taiwan and invest those funds in real assets.

The Executive Yuan continues to improve Taiwan's investment environment. In terms of electricity supplies, the government over the past three years has modified energy resource policies to raise the share of renewable energy in the nation's energy mix. As new generators at the Linkou, Tongxiao and Dalin power plants gradually come online, Taiwan is expected to achieve a 15 percent reserve margin and 10 percent operating reserve for this year and next, providing reliable electricity and satisfying the energy demands of repatriating companies.

To provide more room for industries to grow, the Executive Yuan in April broadened the scope of an industrial zone "vertical expansion" program. This will add substantially to the supply of industrial-use land, with more than 1,800 hectares to be made available to companies over three years.

As for water, the government has a four-part policy approach consisting of new resource development, water conservation, water allocation and emergency backup supplies. We are also pushing a range of water infrastructure projects under the Forward-looking Infrastructure Development Program to ensure reliable supplies for businesses and homes.

To promote 5G technology in Taiwan, in May the Executive Yuan approved a nationwide action plan that will invest NT$20 billion (US$644.3 million) over four years. As Taiwan prepares to enter the 5G era next year, we will speed up the release of 5G licenses, encourage interdisciplinary cooperation among operators, and expedite the arrival of such conveniences and benefits as autonomous vehicles, smart factories and the internet of things (IoT).

Artificial intelligence (AI) can be described as the heart of the fourth industrial revolution. Under the AI Taiwan Action Plan, the nation's first self-driving vehicle testing ground began operations in Tainan's Shalun Smart Green Energy Science City this past February. The Civil IoT Taiwan public information network was also set up to monitor natural disasters and track air quality.

The government will integrate AI with information and communications technology to manage the National Health Insurance (NHI) system and develop medical treatment applications. The NHI MediCloud system was established to allow physicians—with patient consent—to access medical images and lab test results, making doctor visits more convenient for patients while improving the quality of care. The use of AI when combined with prediction and prevention concepts can effectively shorten diagnosis time and improve accuracy, as well as bring considerable health care benefits to the nation.

Green energy is poised to become a future driver of economic growth. The government is therefore building Taiwan into a major hub for Asia's offshore wind technology industries, with investment in domestic offshore wind power estimated to break NT$8 billion (US$257.7 million) this year. By 2025, the industry is expected to generate over NT$1 trillion (US$32.2 billion) in total investment, create 20,000 jobs, and reduce carbon emissions by 11.92 million metric tons annually.


Taking care of the vulnerable, protecting livelihoods, and ensuring a secure and prosperous way of life
A problem for the people, no matter how small, is a big matter to the government. Lowering taxes, simplifying taxation procedures, and protecting lives and property are all important objectives for this administration.

This May, wage earners saw considerable cuts in their tax bills thanks to increases in four types of individual income tax deductions. And in July, the Income Tax Act was amended to provide a special deduction of NT$120,000 (US$3,866) for long-term care expenses (to take effect for next year's tax filing season), easing the burden on families of the elderly and disabled.

To help give young parents the courage to marry and start families, the government has crafted a formal policy response to the declining birth rate designed to alleviate the burden of childrearing. Measures include broadening the coverage of childrearing allowances, expanding public education and care facilities, and creating a "quasi-public" system by subsidizing costs for private education and care facilities. For children ages 0-2, public and quasi-public facilities now offer nearly 74,000 slots. For children ages 2-4, meanwhile, those same facilities are able to provide close to 320,000 opportunities for affordable education.

As part of efforts to meet housing needs for vulnerable groups and young adults, the government is constructing new social housing units (over 40,000 built in the last three years) and providing units subleased from private owners and managed on the owners' behalf. This means more options for young people and families unable to purchase homes of their own.

The government also launched a new program this month to subsidize rent for young singles, newlywed couples, and families with minor children. For disadvantaged students, subsidies are provided for off-campus housing.

In May, the Executive Yuan approved a four-year, NT$9.5 billion (US$306 million) program to invest in the careers of young people. Aside from providing steady employment support for people ages 15-29, the program will smooth the transition from graduation to the workplace, and cultivate the type of talent needed to transform and upgrade Taiwan's key industries.

Thanks to support from the Legislature, four major laws on child and youth protection were amended during the previous legislative session: the Protection of Children and Youths Welfare and Rights Act, the Criminal Code of the Republic of China, the Teachers' Act and the Family Education Act. These changes enable authorities to provide early intervention services to children and youth to better ensure their safety and well-being.

In March of last year, Taiwan officially became an "aged society." To tackle the challenges and problems that come with such a population shift, the government is redoubling efforts toward creating an age-friendly environment. In July, the Executive Yuan introduced a first-of-its-kind bill to boost employment for middle-aged and elderly people, designed to encourage social engagement among healthy older individuals and make use of this valuable pool of talent.

Since the launch of the long-term care 2.0 plan in 2017, the government's long-term care budget has risen from less than NT$5 billion (US$154.7 million) in 2016 to NT$33.8 billion (US$1.1 billion) in 2019, and is expected to grow to nearly NT$40 billion (US$1.3 billion) next year, a 700 percent increase over that time period. Beyond expanding the number of people eligible for care and increasing the types of services available, these funds are also being used to construct more community service centers, which now tally at over 7,000. The number of long-term care recipients surpassed 200,000 in the first seven months of this year, while the wait for post-hospitalization long-term care has dropped from 62 days at the start of the plan in 2017 to seven days currently.

In addition to the special long-term care tax deduction I mentioned earlier, we introduced a subsidy this October for families of residents in long-term care facilities, offering up to NT$60,000 (US$1,933) per person per year. The government will also invest heavily in the development of live-in care resources to allow every person in need of long-term care to access quality and affordable institutional services close to home.

In the area of public health protection, this year we lowered the threshold for hepatitis C treatments, doubled the NHI budget for new hepatitis C drugs, and upgraded all government-funded flu vaccinations to quadrivalent vaccines.

To encourage domestic tourism and spur private-sector consumption, the government rolled out three different winter and spring travel subsidy programs from November 2018 through the first half of this year. We also approved a program offering stimulus and guidance to traditional retailers, which will help 30,000 merchants in 200 shopping districts improve their digital capabilities and adopt mobile payments.

To narrow the digital divide between urban and rural areas, we are bringing telecommunication services to every corner of the country. The average coverage rate of broadband internet in remote areas has reached 97.4 percent, and all 768 villages in 86 rural townships now enjoy access to broadband service. Even the cell base station atop Yushan's north peak—the highest in Northeast Asia—became operational last month.

Mobile payments are an important tool in our campaign to build digital lifestyles and create a smart nation. Since the effort began more than two years ago, Taiwan's mobile payment adoption rate has doubled from 24 percent in 2016 to more than 50 percent presently. Looking ahead, we will amend regulations to integrate mobile payments with electronic stored value cards and permit interbank mobile payment services. These changes will accelerate the development of mobile payments and bring greater convenience to consumers.


Raising wages, reducing financial burdens, and responding quickly to public opinion
Increasing wages for working people remains a priority. Beginning January next year, the nation's minimum wages will be raised again, with the higher rates expected to benefit 1.83 million monthly wage earners and 480,000 hourly based workers. Since taking office in 2016, President Tsai Ing-wen's government has hiked minimum wages four times, bringing the monthly rate from NT$20,008 (US$619) to NT$23,800 (US$767), a cumulative increase of nearly 20 percent. The hourly minimum has likewise risen more than 30 percent, from NT$120 (US$3.71) to NT$158 (US$5.09).

To avoid double taxation and lighten the public's tax obligations, we combed through and discussed various outdated aspects of the tax code in response to popular will. The Executive Yuan has already delivered a proposal to the Legislature to eliminate the stamp tax, and I respectfully request that you support it. Should the proposal be approved, the central government stands ready to make up the resulting lost tax revenues at the local level.

Taiwan's motorcycle industry plays an important role in meeting people's daily needs. The government will pursue future development that places equal emphasis on internal combustion and electric vehicles. We will encourage motorcycle manufacturers to develop both electrical technologies and high-quality, low-emission fuel-burning technologies. Plans also call for providing traditional repair and maintenance outlets with basic training in electric motorcycle care, and preferential financing for technical upgrades and shop renovation.

To speed the replacement of older-model trucks, motorcycles, taxis and school buses, the government will offer tax breaks and subsidies. The hope is to further reduce air pollution while alleviating expenses for vehicle owners.

Over the past eight months, we have seen African swine fever in China spread to Vietnam, North Korea, South Korea, Hong Kong, Laos, Myanmar and the Philippines. The government has taken a number of preventative steps: tightening border controls, raising fines, guiding farmers toward safer pig feeding practices, and improving tracking and controls in the transportation chain. These measures have proven successful at blocking an outbreak here at home, ensuring that the people of Taiwan have pork to eat, and the pig farming industry remains robust.

The government has also injected resources into every area of the agricultural and fisheries industries in order to reduce the operational burden on farmers and fishermen. This includes NT$800 million (US$25.8 million) in subsidies for small-scale farming equipment to help ameliorate labor shortages experienced in rural communities. Also included is NT$1 billion (US$32.2 million) to pay for improvements in basic fisheries infrastructure, which began this August.

Furthermore, in November 2018 the government launched an occupational injury insurance program for farmers aimed at increasing agricultural worker safety and providing compensation. An insurance pilot program covering disaster damage has also been rolled out for 16 types of agricultural products. To ground such insurance initiatives in law and expand the scope of coverage, the Executive Yuan has drafted and sent to this body an agricultural insurance bill for your review. Our goal is to stabilize incomes for workers in the agriculture, forestry, fisheries and animal husbandry sectors so that they no longer have to rely solely on the whims of Mother Nature.

Beginning in January 2020, the monthly welfare allowance for elderly farmers will rise from NT$7,256 (US$234) to NT$7,550 (US$243). Future efforts will concentrate on gradually building up a retirement system for farmers to complement existing protections provided by health insurance, occupational injury insurance and agricultural insurance, creating a comprehensive security net for agricultural workers.


Showing national strength through revived culture, high technology and progressive education
The Cultural Fundamental Act went into effect in June this year, marking an important milestone on the road toward stronger national cultural fundamentals. The law establishes national foundational principles and administrative guidelines for the development of culture. June also saw the establishment of the Taiwan Creative Content Agency. Adopting the concept of "national teams," the government provides support in content industry areas such as the audiovisual and musical arts, traditional and digital publishing, and technical cultural applications and supporting technology, thereby acting as the fuel to propel long-term market growth.

The government has invested over NT$15 billion (US$483.2 million) in its "spheres of culture" project as part of efforts to improve both soft and hard infrastructure under the Forward-looking Infrastructure Development Program. Resources are also being directed to raise the quality and quantity of domestic creative works, as well as the scale of production. Such outstanding works as the television series "The World Between Us" serve as cultural ambassadors to the world and demonstrate the success of digital creative content under the Forward-looking Infrastructure Development Program.

As for cultural equality, the government set up television stations catering to the Hakka and indigenous communities many years ago. This year a special subsidy has gone toward establishing a Taiwanese-language station, which began programming on July 1 this year. It is now available through multimedia-on-demand platforms and all major cable television providers.

To preserve and develop Hakka language and culture, and bring new vitality to Hakka villages, the Executive Yuan has approved six initiatives, including a development project to mainstream the Hakka way of life. Around NT$15.6 billion (US$502.5 million) has been budgeted for these efforts. Plans call for assembling a body of Hakka knowledge at the national level, training a national Hakka arts and culture troupe, and promoting Hakka programming and talent development. Also to be funded are the construction of northern and southern Hakka cultural parks, and the creation of a conducive environment for developing local industry in Hakka villages.

In June this year the Education Act for Indigenous Peoples was amended to further secure education rights for this group. The revisions will help complete the environment for indigenous education, nurture future talent, and ensure the preservation and development of indigenous heritage.

New national curriculum guidelines have been officially introduced for the 2019 school year, aimed at fostering creativity, independent thinking, interdisciplinary skills and practical abilities. The changes are the first time that Taiwan's 12-year basic education curriculum guidelines have been revised and remapped, and include completely new coursework, teaching methods and approaches to learning. Our hope is that every child will now have adaptive learning resources as they grow to become lifelong learners and socially responsible, internationally minded modern citizens.

Success on the sports field is one thing that brings a nation together. The Executive Yuan has approved the third phase of the National Sports Park Establishment and Talent Development Plan, which calls for the investment of NT$6.3 billion (US$203 million) over five years. The government has also allocated NT$600 million (US$19.3 million) to provide suitable logistical support for athletes who will compete in the 2020 Tokyo and 2024 Paris Olympics. This includes individually customized training and assistance with setting up such training and support teams.

Our appreciation for success extends beyond the athletic field. To train stand-out technical and vocational students and optimize their school environments, the government is investing NT$8 billion (US$257.7 million) over four years in the Job Ready Skills Program under the Forward-looking Infrastructure Development Program. Additionally, the Higher Education Sprout Project was rolled out in 2018 to improve teaching and training facilities at technical colleges, vocational schools and universities, with a five-year budget of NT$30 billion (US$966.4 million). Prize amounts for skills competitions have also been raised. The ultimate goal is to provide the means for Taiwan's young people to use their special skills to play a meaningful role in the world.

This year marks the 50th anniversary of man's first steps on the moon. The first project I signed off on as premier was the third phase of Taiwan's Long-term National Space Technology Development Program. Funding for this phase amounts to NT$25.1 billion (US$808.6 million) over 10 years.

June of this year saw the successful launch and deployment of the FORMOSAT-7 satellite constellation. With six individual satellites, this project is the largest Taiwan-U.S. technical and research collaboration to date, and will provide even more accurate meteorological data to help protect life and property on the ground. In the coming years we will continue our research and technological development, and build a thriving aerospace industry in Taiwan.


Protecting democracy, defending our values, and realizing transitional justice
To curb the spread of harmful misinformation, the government has already drafted and passed amendments to several laws. Still awaiting passage by the Legislative Yuan are changes to the Criminal Code of the Republic of China and the Criminal Code of the Armed Forces. I ask that you support these amendments as well for the sake of our national security. The Executive Yuan is cooperating with third-party organizations and social media platforms to broaden the scope of fact-finding and rebuttal efforts and quickly provide the most accurate information to the public.

As for same-sex marriage, the government this year passed the Act for Implementation of Judicial Yuan Interpretation No. 748, a piece of dedicated legislation that respects both the referendum result of last November and the Judicial Yuan's constitutional interpretation. The law took effect on May 24, and I want to thank legislators from all parties and the public for your support and open-mindedness. Together we have realized marriage equality in Taiwan. Now two people of the same sex can enjoy the protections of marriage, making our nation one of mutual respect and camaraderie. This step has also shown the world Taiwan's progress toward human rights protections.

Next January we will hold elections for the nation's president and vice president, along with the members of the Legislature. To ensure fairness, incorruptibility and a smooth completion of the election process, I have issued strict directives to the relevant ministries and agencies to thoroughly investigate all allegations of vote-buying, maintain peace and order, and prevent the influence of foreign powers. By devoting efforts to guarantee a fair, problem-free election, we will enable the voters of Taiwan to elect the most capable talent to lead the nation toward greater progress and peace.


Upholding national sovereignty, strengthening national defense, and pursuing steadfast diplomacy
Self-sufficiency in the construction of military aircraft and vessels contributes to weapons research and development capabilities and bolsters national defense and autonomy. Taiwan's domestically produced training jets will take to the skies for the first time next year. Our indigenous submarine program is already underway, with the goal of commissioning new vessels in 2025.

To help enhance Taiwan's defensive combat ability and maintain our overall national security and regional stability, the government has on multiple occasions secured U.S. approval for military equipment procurements. Following the acquisition of M1A2 Abrams tanks, Taiwan now plans to purchase 66 new F-16V Block 70 jet fighters. As a responsible member of the international community, we will continue to invest in stronger national security.

Taiwan conducts diplomacy from a position of disadvantage. In the face of China's unrelenting pressure, we rely on national solidarity to steadfastly forge ahead and promote foreign relations. President Tsai visited four Caribbean allies in July this year, where she advanced closer exchanges and cooperation on such fronts as medicine, agriculture, education, finance, transportation and public safety. During her transit in the U.S., the president set new precedents for personal diplomacy by Taiwan's head of state. Her trip not only produced a hard-won breakthrough, but also demonstrated once again the steady development of Taiwan-U.S. relations following the passage of favorable legislation such as the Taiwan Travel Act and the National Defense Authorization Act, as well as the U.S. House's passage of the Taiwan Assurance Act.

As for the promotion of the New Southbound Policy, trade and travel between Taiwan and targeted countries in the first half of 2019 grew compared with the same period last year. Trade volume reached US$54.2 billion, including US$23.2 billion in imports into Taiwan, and we saw 1.36 million visits from New Southbound nations. Furthermore, we use soft power to engage these countries in such areas as medicine, agriculture, tourism, technology and culture. Through related cooperative mechanisms Taiwan extends a helping hand to Asia and welcomes the same in return, thereby contributing to the global community and increasing our international presence.


Moving full-speed ahead toward national progress
On April 10 this year, mankind photographed a black hole for the first time. This feat was accomplished using eight radio telescopes from around the world and required two years of image processing. Teams from Taiwan took part in the operation or construction of three of those telescopes. At home the government is promoting the use of the Taiwan Photon Source synchrotron radiation facility, dubbed the "world's brightest microscope."

We have been pushing the manufacture of smart machinery for several years, and Taiwan is now the second-largest exporter of four-side molders, nuts, and bolts. Additionally, Taiwan is set this year to become the largest and fastest-growing semiconductor equipment market in the world, according to a forecast by the global industry association Semiconductor Equipment and Materials International.

As for Taiwan's democracy, international human rights organization Freedom House gave Taiwan a score of 93, the second highest in Asia, in its Freedom in the World 2019 survey released in February.

There are perhaps many among us who have yet to realize just how unusual and unique Taiwan's accomplishments are, and that the nation does wield a certain level of influence in global affairs. This success however belongs to the people, businesses and government of Taiwan. All have worked tirelessly to build a better nation.

We are one country, one Taiwan. We need the cooperation and solidarity of all to face challenges both at home and abroad. By bringing together the power of all political parties and Taiwan as a whole, we can overcome these challenges. We will push forward together and continue our upward climb.

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