Legislative Yuan President Su Jia-chyuan, Legislative Yuan Vice President Tsai Chi-chang, members of the Legislature:
Thank you for inviting me today to deliver the Executive Yuan's administrative policy report. First, I would like to thank the Legislature for supporting us during the previous legislative session. I offer my highest respects and gratitude to everyone here.
For your reference, we have already submitted printed copies of the Executive Yuan's administrative policies for the first half of 2016. Now, I will report on the Executive Yuan's key achievements as well as policy directions for the future:
I. Tackle challenges, seek domestic and international breakthroughs
Over the past several years, many advanced and developing countries have fallen into sustained recessions due to insufficient effective demand in the global economy and an overcapacity of production. The United Kingdom's recent decision to leave the European Union will also bring about greater uncertainty for the years ahead.
In Taiwan, the nation faces its own set of problems including an economic slowdown, rising unemployment among young people, a widening wealth gap, a shift of jobs overseas, and stagnant wages. We are also seeing a low national birth rate, fewer children being born, a rapidly aging population, and financial problems with the pension system. All of these issues pose complex and daunting challenges for the government.
To deal with long-term structural problems as well as the immediate, pressing issues, the government must enact reforms in a steady, pragmatic and persistent manner. We must also build broad public consensuses to minimize the pains of reform.
Focusing on the principles of innovation, employment and fair distribution as outlined in President Tsai Ing-wen's administrative blueprint, the Executive Yuan will steer the economy in a new direction and create comprehensive models of development.
II. Set forward-thinking policies, promote steadfast reform
Responding to the demands and expectations of the people, we have taken great care to formulate forward-looking policies in six areas: economic growth, social security, sustainable development, balanced regional development, a robust society and national security.
1. Accelerate industrial upgrading, create an innovation-driven economy
Innovation is driving force of Taiwan's economy and the key to industrial transformation. By creating local, global and future links, we will make full use of Taiwan's industrial clusters to promote five innovative industries: an Asian Silicon Valley, intelligent machinery, green energy technology, biomedicine and national defense.
a. Invest in infrastructure, guide industrial transformation
To stimulate the economy and attract more investments, the Executive Yuan has proposed an investment expansion program that will: (1) Establish a NT$100 billion (US$3.2 billion) fund for industrial innovation and transformation. (2) Found a national investment company to spur investments in innovative companies using the pooled resources of the National Development Fund, state-owned enterprises and private groups. (3) Invest up to NT$340 billion (US$10.8 billion) in emerging industries and infrastructure projects, to be conducted by state-owned enterprises and companies in which the government holds shares. (4) Build digital infrastructure, help businesses switch to digital operations, and promote digital innovation.
b. Recruit and retain professionals, cultivate innovative talent for Asia
Promoting the five innovative industries will require the assistance of foreign professionals of all different backgrounds. We are therefore promoting a program to create a better talent-retaining environment, including 27 reform strategies to address visa, residency, financial, tax and insurance issues faced by foreign professionals and overseas Chinese students who come to Taiwan.
To make Taiwan a regional stage for innovative talent, we will change recruitment and innovation laws (such as the Immigration Act) and introduce comprehensive regulations on angel funds, entrepreneurial investments and initial public offerings.
c. Ease financial and economic regulations, promote lifestyle industries
To boost investments in the real economy's production activities, the Financial Supervisory Commission has proposed a program to lift the real economy through the financial sector. Under this initiative, the financial sector will provide industries with capital resources, financial consultation, and hardware and software support.
To encourage growth in innovative industries and online technologies, we will operate with minimal regulations, forward-looking strategies and flexible laws. Amendments will also be made to the Statute for Investment by Foreign Nationals, the Company Act, and the Copyright Act. We will create a financial regulatory environment that matches international norms in the areas of asset-backed securities, telecommuting, the sharing economy, remote health care, e-governance, and corporate anti-corruption efforts.
To strengthen Taiwan's anti-tax evasion regime, the Executive Yuan approved amendments to the Income Basic Tax Act on July 21 and submitted them to the Legislature the following day. These amendments are intended to deter individuals from circumventing tax liabilities.
Aside from the five innovative industries, the government continues to promote better living industries such as new agriculture, tourism and leisure, disaster prevention technology and residential building improvement. These efforts will stimulate domestic demand, create local jobs, and find export opportunities for lifestyle industries.
We are also keeping a close eye on livestock and fishery issues. For livestock, we will make Taiwan's pork industry more competitive by modernizing pig farming techniques and preventing livestock infections. For fisheries, we will bring Taiwan in line with international fishery and management norms by pushing the Act for Distant Water Fisheries and two other bills, all of which were approved during the Legislature's previous session. The government will actively protect Taiwan's fish and fishing waters to ensure the sustainability of these operations.
2. Weave a social safety net, achieve a new social justice
a. Build a safe homeland, promote urban renewal
To make sure every person has a safe home to live in, the government will promote a safe residence project, discourage real estate speculation, create a robust home rental system, and promote social housing. Together, central and local governments will select suitable sites for building new homes, manage existing rental units on behalf of private owners, and offer volume incentives. Our goal is to build 200,000 social housing units for rental purposes within eight years.
To expand housing support for disadvantaged groups, the Executive Yuan submitted an amendment on the Housing Act to the Legislature on September 2, recommending an increase in the proportion of social housing units for economically or socially disadvantaged groups to 30 percent.
The government will continue to reinforce old buildings for seismic resistance, prevent soil liquefaction in at-risk areas, change disaster prevention laws, restructure the disaster prevention system, and improve related capabilities.
We will also amend building architecture laws to better manage construction projects and make oversight and inspection more rigorous. The government will enhance regulations on urban renewal and urban regeneration, setting up a dedicated agency to promote urban renewal and effective land use.
b. Reinforce food safety, protect the public's health
To manage food safety and ensure the health of citizens, we will promote five food safety policies: (1) Tighten source control: The Environmental Protection Administration will set up an agency to manage toxic chemicals and track the flow of chemical substances from the start of the production process. (2) Rebuild the production management system: Create a food tracing and product-origin label system that allows consumers to see every step of the product's manufacturing history. (3) Step up market inspections: Increase the frequency and intensity of inspection of high-risk products by 10 times and conduct cross-domain and cross-agency inspections. (4) Place greater responsibility on manufacturers: Change laws to impose heavier punishment on violators and encourage stricter self-management by manufacturers. (5) Promote citizen oversight: Offer rewards to people who report corrupt companies to authorities.
c. Expand community care services, improve long-term care quality
As the problems of population aging and birth rate decline become more acute in Taiwan, the government will continue to promote a three-pronged policy of child care, long-term care and employment. This policy integrates child and adult care services with medical resources, builds community care networks, and helps families care for their young and old.
We will create a comprehensive child care personnel system, expand public education and care services, subsidize and open more public and nonprofit kindergartens, and provide quality and affordable child care services.
To establish an accessible, affordable and quality long-term care system, the Executive Yuan has appointed a long-term care task force to marshal health care, long-term care, and preventive health resources for the "10-year long-term care 2.0 project." Through a community-based care model, the task force works with local governments and service providers to design long-term care services specific to each locale. The project team is currently holding explanatory meetings around the country to solicit the public's feedback to make policies more complete.
We will also cultivate a quality and abundant long-term care work force, elevate the professional value and social standing of care providers, and protect their labor rights and personal safety. We will also use earmarked taxes and public service budgets to make sure the long-term care system has ample and steady revenue streams.
d. Reform the pension system, ensure social security
To create a sustainable national pension system, the Office of the President has established a Pension Reform Committee and will hold a national pension conference to communicate and build a consensus with the public. The Executive Yuan also set up a pension reform office on June 8 to carry out related tasks. Moving forward, we will amend laws and redesign the pension system based on the public consensus, ensure the sustainability of the system, and safeguard the economic security of senior citizens.
To improve the work environment and protect labor rights, the government has amended numerous laws and reduced the number of working hours nationwide. To make sure all workers have two days off each week, the government has adopted a "one fixed day off, one flexible rest day" scheme, which is currently the most practical method for protecting employees' rights while allowing companies to maintain flexible operations. To ensure workers can sustain basic living standards, we will review minimum wage laws; improve the career counseling, job matching and vocational training system; promote special legislation on employment for middle-aged and older workers; and find jobs for workers of all ages.
As for the illicit drug problem, we will cut off the substances at the source by tightening drug and border controls. The government will set up a drug crimes database, create a cross-regional joint prevention mechanism, assign more personnel to fighting drugs, and minimize the space in which drug criminals can operate.
Fraud operations are growing by the day as scammers make greater use of communications technology. To curb the spread of fraud crimes, we will cooperate with other countries and use high-tech methods to track and seize stolen money and goods.
Random killings in recent times have shocked all sectors of our society. In response, we have established an interministerial task force to take measures addressing high-risk groups and to push for tougher criminal prosecutions. In the future, we will enhance victim support and assistance measures, promote media self- and peer-regulation, strengthen community shelters, conduct case studies, and stem the problem before it arises.
e. Push for transitional justice, deepen democratic reform
The government will, in a most sincere manner, pursue transitional justice and redress the undemocratic and unconstitutional acts that occurred during Taiwan's martial law period. We will gather and disclose political files from the past, hold the perpetrators accountable and uncover the truth.
To create a fair environment for political competition, the government promulgated the Act Governing the Handling of Ill-gotten Properties by Political Parties and Their Affiliate Organizations on August 10, and on August 31 established the Ill-gotten Party Assets Settlement Committee to handle these matters.
To achieve transitional justice for Taiwan's indigenous peoples, President Tsai established the Indigenous Historical Justice and Transitional Justice Commission under the Presidential Office on August 1. She also designated that day Indigenous People's Day to underscore the importance of aboriginal culture and history.
Our three objectives for the future: thoroughly enforce the Indigenous Peoples Basic Law, achieve historical justice for indigenous peoples, and lay the foundation for indigenous autonomy. We also hope to submit related bills on autonomy, land and waters rights, and language development to the Legislature soon for ratification.
3. Improve infrastructure quality, create a new sustainable environment
a. Enhance construction efficiency, strengthen procurement laws
When promoting public works, my administrative team will emphasize practicality and efficiency while avoiding waste of resources. We will push strategic projects such as digital infrastructure, new energy and water resources, and smart transportation systems. During that process, we will cultivate globally competitive engineering consultant and construction businesses.
We will also examine the efficiency and effectiveness of public construction projects, and establish mechanisms for clarifying rights and obligations, allocating profits, and settling disputes between the public and private sectors.
To improve the quality of government procurements, the Public Construction Commission will promote a most advantageous tender system, amend outdated procurement regulations, and streamline procedures for better efficiency.
b. Build a sustainable homeland, stabilize energy supply and demand
This administration pledges to tackle the challenges that have been brought on by climate change, global warming and greenhouse gas emissions. We will create a comprehensive legal framework for greenhouse gas reduction, transform Taiwan into a low-carbon economy, and fulfill the country's carbon-reduction commitments. Earlier on June 23, the Executive Yuan inaugurated an energy and carbon reduction office that coordinates resources across agencies and facilitates participation by the government, academia and businesses.
Because Taiwan is heavily reliant on imported energy, the government will increase the proportion of energy from renewable sources by developing new resources and building a safe, stable, efficient and clean energy supply system. This strategy will simultaneously meet the needs for energy safety, environment sustainability and a green economy. In addition, we will promote smart grids, build energy storage systems and liberalize the electricity market in order to create a sustainable environment and make Taiwan nuclear-free by 2025.
To improve air quality, we will continue to monitor and regulate the nation's air quality and PM 2.5 emissions (particulate matter smaller than 2.5 micrometers in diameter). Our approach is to be practical in the short-term and rigorous in the long-term.
In water conservation efforts, the administration will match water supplies and demands more efficiently, tap new sources, promote desalination projects, recycle wastewater and utilize groundwater. We will also encourage water conservation, reallocate water resources and protect catchment areas as we build a diversified and sustainable supply system.
The waters surrounding Taiwan are teeming with rich and diverse marine ecologies that need stronger protection and restoration by the government. We will also work to prevent pollution incidents and grow the marine tourism industry.
4. Raise governance efficiency, balance regional development
a. Allocate manpower appropriately, improve fiscal efficiency
With limited government resources, it is imperative to utilize resources and manpower as efficiently as possible. We will allocate personnel more appropriately, assign more people to core tasks, streamline management and evaluation procedures, and review our internal control and assessment mechanisms. We will also create a performance evaluation system that encourages proactive work behavior, responsibility and flexibility.
To enhance fiscal discipline, we studied economic trends and indicators around the world and deliberated on the "loan cap" limits stipulated in the Public Debt Act. We also weighed and prioritized all of our policy programs and used "zero-based budgeting" principles to come up with the Central Government General Budget Proposal for 2017.
To improve fiscal discipline at the local government level, my administrative team will allocate more tax revenues to programs that offer broad-ranging benefits, cover multiple regions and set examples for other programs.
b. Implement national land planning, foster regional prosperity
To balance development in different regions of Taiwan, we will use a "regional governance" model that promotes industrial clusters and development projects for six regions: (1) Taipei, New Taipei, Taoyuan, Keelung and Yilan; (2) Taoyuan, Hsinchu and Miaoli; (3) Taichung, Changhua and Nantou; (4) Yunlin, Chiayi and Tainan; (5) Tainan, Kaohsiung, Pingtung and Penghu; and (6) Hualien, Taitung, Kinmen and Matsu. By granting more power and resources to local governments and having them work together on regional projects, we will boost the growth of each region and encourage sharing of resources.
In national land planning, we will step up protection of the island's ecological chain, survey and integrate information on disaster-prone or environmentally sensitive areas, and prevent overdevelopment of national land. We will also build a detailed and dynamic national land information sharing system, strengthen land planning and disaster relief capabilities, encourage local governments to use assistive information systems when making decisions, improve the country's disaster information portal, and increase disaster rapid-response capabilities.
5. Enrich educational and cultural content, promote ethnic equality
a. Improve education quality, close the education-to-employment gap
To make sure all high school and above students can access education, the government on August 1 lowered tuition loan interest rates for different household income levels, benefiting 436,000 students. Those from low- and lower-middle-income households or households earning less than NT$30,000 (US$940) per month in the previous year may also defer repayment of the principal and extend the term of the loan.
To address the overexpansion of colleges and universities and narrow the gap between vocational training and industry needs, we will transform higher education and reshape the vocational education system. Aside from helping schools develop unique advantages that support local industries, the government will strengthen academia-industry collaborations to cultivate students with job-ready skills.
We will also continue promoting online learning to narrow the rural-urban gap in educational resources, and facilitate the sharing of teaching resources by building hardware infrastructure and creating educational content applications.
b. Foster diversity of innovation, develop cultural creative industries
Strengthening Taiwan's cultural power is the core of our culture policy. In addition to launching cultural education programs throughout the 12-year national education system, we will promote cultural experiences for the public in order to cultivate a culture-consuming and culturally literate society.
To help artists and cultural workers unleash their creative potential, the government will build a support system and reform the award and subsidy mechanism. To underscore the significance of Taiwan's cultural assets, the Ministry of Culture in June 2016 approved 11 historical site restoration projects at 10 cities and counties, linking cultural preservation to local lifestyles and the tourism industry.
c. Promote ethnic harmony, ensure equal rights
Under our indigenous policy, we have launched an all-out effort to promote and protect indigenous rights, integrating central and local resources to implement a package of 32 policies and 80 specific measures. To provide indigenous peoples with equal opportunities for economic development, the Executive Yuan on August 8 approved the third phase (2017-2020) of the indigenous peoples' employment program, dedicating NT$5.76 billion (US$182.3 million) to expanding job training and cooperative education for indigenous peoples.
Regarding our Hakka policy, we have planned a "Romantic Provincial Highway 3" project as part of our regional governance model. The project will link the economies, ecologies and cultural landscapes of 16 Hakka communities along this route, promoting Hakka culture and bolstering Hakka industry clusters. We also hope to draw more young people to this region and make it a successful model for developing other regions.
For new immigrants, we will expand their eligibility for social welfare and government assistance, recognize academic degrees from their home countries, pass on their languages to the next generation, and help them assimilate into Taiwan society. We will also use their linguistic and cultural advantages to launch an array of private-sector exchanges with Southeast Asian countries.
6. Fortify national defense capabilities, expand international and cross-strait space
a. Bolster autonomous defense, increase international presence
To achieve greater autonomy in national defense, we will focus first on manufacturing our own military aircraft, warships and advanced weapons. We will also expand the national defense market by combining government defense technology research with civilian production. Our efforts will center on the aerospace, shipbuilding and information security industries.
In foreign relations, we will continue enhancing interactions with friendly nations such as the U.S. and Japan. Furthermore, the Executive Yuan recently proposed the New Southbound Policy Promotion Plan to boost ties with Association of Southeast Asian Nations members, South Asian countries, New Zealand and Australia. Built around the core concepts of long-term exploration, multipronged development and mutual benefit, the plan will integrate the resources and strengths of central government agencies, local governments as well as private companies and organizations. By promoting economic collaboration, conducting talent exchange, sharing resources and building regional links, Taiwan hopes to forge a new and mutually beneficial model of cooperation and a sense of economic community with those countries.
To attract more Southeast Asian tourists to Taiwan, we have extended visa-free privileges to Thai and Bruneian passport holders for stays of up to 30 days, and granted conditional visa-waiver privileges to Indonesian, Vietnamese and Filipino visitors. We will monitor the results of these initiatives and adopt more effective, open measures to draw more tourists to Taiwan.
As for regional economic integration, the government will continue to seek membership in the Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership. We are working to close gaps between domestic regulations and the standards set by these agreements. As of today, the Executive Yuan has sent draft amendments on the Postal Act, the Pharmaceutical Affairs Act, the Patent Act and the Copyright Act to the Legislature for deliberation.
b. Pursue stable cross-strait relations, seek exchanges based on equality and dignity
Maintaining the status quo will be our core ideal for ensuring peaceful and stable cross-strait relations. The two sides of the Taiwan Strait can only achieve a win-win situation by pursuing peaceful development, understanding each other, and seeking common ground while accepting differences.
The government will establish a firm foundation for cross-strait negotiations by following the principles of openness and transparency, participation by the public, and monitoring by the Legislature. Our aim is to promote interactions on the basis of equality and dignity and address common issues in a sincere manner. We hope to build a consistent, predictable and sustainable cross-strait relationship through positive dialogue between the two sides' semi-official agencies.
c. Safeguard sovereignty in the South China Sea, resolve disputes among parties
While the South China Sea arbitration results have undermined Taiwan's sovereignty and fishing rights in those waters, the government remains resolute in defending its sovereignty and interests. We will deal with territorial disputes through peaceful means, shelving differences and promoting joint development.
As an indispensable party to the South China Sea dispute resolution mechanism, Taiwan should be included in any multilateral mechanism on an equal footing. We also hope all interested parties to the South China Sea can set up a coordination and cooperation mechanism for nontraditional security issues such as environmental protection, scientific research, and anti-maritime-crime efforts. The parties must join hands and negotiate on an equal basis to advance the area's peace and stability.
III. Promote dialogue, lift Taiwan together
Although people may hold different memories and perceptions of our nation's history and social changes, it is this diversity of opinions that makes up the vitality of the Taiwanese people. As long as we remain resolute and stand united, we will able to grow as a nation and overcome whatever challenges that lie ahead.
Since I assumed the premiership on May 20, my administrative team has actively sought the views of different civic groups, business associations, and opinion leaders. We will continue striving to balance the issues and solve problems through a humble yet effective approach.
Aside from the 2017 Central Government General Budget Proposal, the Executive Yuan has submitted various priority bills to the Legislative Yuan for consideration. I respectfully request your support for these bills.
Looking forward, I hope the legislative and executive branches can work closer together in our common desire to improve the well-being of citizens. Let us infuse a sure and steadfast confidence into Taiwan and allow the nation to shine with pride and glory.
Finally, please do not hesitate to offer any critique or advice you may have. My sincere thanks to all lawmakers and legislative staff, as well as members of the media, for your hard work and efforts. I wish you all much health and success. Thank you.