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Premier Lin Chuan's oral policy report to 3rd session of 9th Legislature


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

I am honored to be here to deliver the Executive Yuan's administrative policy report on the opening day of the third session of the Ninth Legislature.

First, I'd like to thank all of our esteemed legislators for supporting and guiding us during the last legislative session. For your reference, we have submitted printed copies of the Executive Yuan's administrative policies from the second half of 2016.

I. Overcoming difficulties to enact change

Since I became premier on May 20 last year, my administrative team has applied the principles of "innovation, employment and equitable distribution" to guide the nation's economic growth. We have also pushed for comprehensive structural transformation and reforms in an effort to solidify and expand the foundation of our nation's sustainable development.

We understand that reform always comes with short-term pain and turmoil, but we are determined to boldly confront and deal with these problems because we believe this is the only road forward for Taiwan. We can only reach a brighter future by overcoming these obstacles.

For more than eight months now, my administrative team has worked hard and produced many positive results:

In terms of overall economic performance, Taiwan's economy last December flashed a "green" light indicating stable growth for the sixth consecutive month, according to the National Development Council (NDC) on January 26. Export orders also grew for four straight months after reversing a 16-month slide last August. According to the World Economic Forum's 2016-2017 Global Competitiveness Report of September 28 last year, Taiwan placed 14th out of 138 assessed countries, and was the only Asian country other than India to advance in the rankings this time.

As for the five major innovative industries program, which is critical to industrial restructuring, preparations for each industry have been completed by central and local governments working in concert with the industrial, academic and research sectors: (1) the Shalun Green Energy Science City preparatory office was inaugurated to promote the green energy industry; (2) the Asia Silicon Valley Development Agency was officially opened, focusing on the internet of things and innovative startups; (3) the Biomedical Industry Innovation Program center was launched on January 25; (4) the Smart Machinery Promotion Office was inaugurated on February 7; and (5) the Ministry of National Defense (MND) signed an agreement with the National Chung-Shan Institute of Science and Technology on February 7 to build a new generation of homegrown, advanced jet trainers.

In transportation infrastructure, the airport metro line has begun trial operations recently, ahead of the official launch on March 2. The new line will provide steady and reliable transportation service between Taipei and the Taoyuan international airport, and give the airport another competitive edge in its quest to become a first-class international facility.

Regarding the social safety net, the long-term care 2.0 program officially kicked off on January 1. Funding long-term care is a challenge that has drawn much attention, so we passed new amendments to the Long-term Care Services Act to set up financial resources for a long-term care fund. In housing justice, the Housing Act was amended to provide an explicit legal basis to help local governments acquire land, secure funding, organize manpower, and resolve other problems when promoting social housing. The amendment also increased the proportion of social housing units reserved for economically or socially disadvantaged households to 30 percent.

In labor rights, we implemented a five-day workweek with the Legislature's support, amending the Labor Standards Act to entitle workers to at least two days of rest every seven days. We also raised overtime pay on flexible rest days and gave workers more annual leave days. And on January 1, the national minimum monthly wage was increased to NT$21,009 (US$680) and the hourly wage to NT$133 (US$4.30).

In energy industry transformation, attempts to change the Electricity Act finally succeeded after more than 20 years when the Legislature passed our amendments. We adopted a gradual approach to deregulating the power industry, prioritizing liberalization of the renewable and green energy development industries. Our amendments also provide the legal basis for promoting and spurring investments in research and development of the green energy industry, allowing us to create jobs and build a thriving industry that will bring Taiwan one step closer to becoming a nuclear-free country.

Ladies and gentlemen, these objective results represent progress in the right policy direction, and brave and proactive service by my administrative team in the face of challenges. We strive not only for overall economic growth, but also a better quality of life and protection for all citizens.

We also clearly understand that governance in a democratic country requires us to forge consensus and bring people together, so as we push for reforms and improvements in the country's overall environment, we will continue communicating with all sectors of society and find a common denominator through rational dialogue.

II. All-out effort to better every sector of society

The government is responsible for helping to solve problems, creating opportunities and laying the foundation for Taiwan's sustainable future, all of which are the core principles of my administrative team. I will now lay out our current policy measures and the direction of our future promotions:

A. Accelerate industrial transformation, strengthen economic innovation

1. Encourage industrial innovation, create a digital nation

The government is now promoting the "five plus two" innovative industries program to spur industrial innovation and consolidate limited resources. This program will transform Taiwan's economic structure by applying technological innovations to existing industrial foundations, and linking resources across disciplines to add greater value to all industries.

On November 24 last year, the Executive Yuan passed the Digital Nation and Innovative Economic Development Plan, or DIGI+, to capitalize on digital-era opportunities and help businesses find innovative ways to tap into the digital economy. The plan will invest NT$170 billion (US$5.3 billion) over nine years to create a solid foundation for digital innovations and applications, with the goal of growing the digital sector's annual output to NT$6.5 trillion (US$201.1 billion) by 2025.

2. Create a quality work environment, strengthen retention system

The government has begun deregulating recruitment laws because Taiwan needs to modernize its regulatory framework, and attract and retain bright people to promote industrial innovation and transformation. Last October 19, we approved a plan to create an overall environment that will help us retain professionals, including 27 reform strategies that will help create a more international living and work environment.

The NDC is also promoting a bill on recruiting and hiring foreign professionals, and has begun assessing possible changes to the Company Act.

3. Revitalize capital markets, create a sound tax structure

We approved an investment expansion plan on September 13, 2016 to accelerate Taiwan's economic recovery, including measures to create a NT$100 billion (US$3.1 billion) industrial innovation and transformation fund through the National Development Fund, and plans to set up a national-level investment company.

The Ministry of Economic Affairs (MOEA) also established the InvesTaiwan Service Center on October 6 as a one-stop service window for major investment cases. For companies leasing land in the Changhua Coastal Industrial Park and four other industrial parks, the MOEA offers rent-free land leases for the first two years. The Ministry of Science and Technology has also lowered rent for lots in the science parks by 8.99 percent.

The Ministry of Finance is planning tax reforms to forge a system that is both fair to citizens and beneficial for the economy. After holding two tax reform forums in February to gather public feedback, the ministry is expected to present a reform proposal before the end of May.

4. Reinvigorate the tourism industry, improve travel quality

The number of visitors to Taiwan from the 18 countries targeted by the New Southbound Policy during all of 2016 rose 15.3 percent over the previous year after Taiwan offered simplified visa procedures to the Association of Southeast Asian Nations (ASEAN) and South Asian countries in August 2016. The total number of visitors from all countries for the year 2016 also broke the 10 million mark on December 11.

The Tourism Bureau is helping tourism and travel operators cater to more diverse travelers. Last October 24, the bureau announced a measure to subsidize tour guides or translators who speak Southeast Asian languages, with the guides receiving a subsidy of up to NT$10,000 (US$309) per tour group.

The government also budgeted NT$300 million (US$9.7 million) to stimulate the domestic tourism market and encourage citizens to travel at times other than weekends and holidays. Approximately 6,600 domestic tour groups and 233,310 people will benefit from these subsidies, creating economic benefits and business opportunities worth NT$1.4 billion (US$45.3 million).

As for this week's tour bus crash, we will take this painful experience to heart and conduct a thorough review of the structural problems to come up with solutions as quickly as possible.

B. Expand public works, promote urban-rural co-prosperity

1. Improve national infrastructure, boost domestic demand

To help get the economy moving, starting this year the Executive Yuan will do a comprehensive review and accelerate infrastructure investments in a way that also maintains fiscal health and stability. This will include increasing investments in state-run businesses as well as earmarking multiple-year special budgets for forward-looking infrastructure such as railroad lines, water resources, green energy, digital technology, and rural and urban infrastructure.

For railway infrastructure, we will be augmenting the country's railroad systems over the next four years as part of our long-term vision to link the entire island into one community. In water infrastructure, our goals are to provide reliable water supplies, strengthen flood prevention and soil protection efforts, and improve water quality. For green energy, our plans include investments in solar power, wind power and smart electricity meters over the next four years. In digital technology, we will promote smart broadband internet, infrastructure for information and communication hardware, and facilities for scientific and technological research and development.

Once finalized, these budgets will be submitted for legislative review, and we look forward to receiving your assistance and support.

2. Implement land use plans, balance regional development

The Ministry of the Interior (MOI) promulgated the Enforcement Rules of the Spatial Planning Act on June 17, 2016 to promote sustainable land use, and has drafted 20 subsidiary laws and a nationwide land use plan. The MOI continues to promote city and township landscape improvement programs in the spirit of joint regional governance, approving 237 projects and selecting 34 cross-regional demonstration zones last year. Community road projects and other transportation systems are also being implemented to improve local transportation and drive regional prosperity.

C. Build a just society, create a social safety net

1. Provide social housing, speed up urban renewal

The MOI will provide 200,000 rental units under the social housing policy within the next eight years by constructing new units or subleasing existing units, and helping local governments find more resources for social housing. And, in line with its objectives to care for the disadvantaged, connect local communities and promote green buildings, the government will ensure the quality of building construction while improving management and marketing efforts.

In urban renewal, the Executive Yuan has submitted to the Legislature a bill on using incentives to expedite the reconstruction of dangerous and old urban buildings. Once approved, it will offer practical incentives for reconstructing buildings, encourage wholly and partially state-owned banks to offer loans for urban renewal, and boost domestic demand for architectural design and construction services.

2. Reform the pension system, promote integrated care

Regarding the progress of pension reform, the Pension Reform Committee held 20 meetings and completed discussions on Taiwan's 13 different pension programs before holding regional forums in northern, central, southern and eastern Taiwan to collect public feedback. The Office of the President then held a press conference on January 19 to outline the reform plan, and the vice president convened a national conference on January 22. The Executive Yuan is now drafting pension law amendments to be forwarded to the Legislature during the current session, and we hope we can count on your support.

As Taiwan grapples with a rapidly graying population and declining birth rate, we are pushing a three-pronged care policy to promote child care, long-term care and job creation. I mentioned the results of our long-term care efforts earlier. As for child care, we will inject about NT$6.2 billion (US$200.6 million) by 2020 to help local governments increase the number of public preschool classes by 1,000.

3. Strengthen food safety controls, combat illegal drugs

Under the government's five-point food safety policy, in December 2016 the Environmental Protection Administration (EPA) established the Toxic and Chemical Substances Bureau as the first point of control, responsible for regulating chemical substances in food products at the source. We also set up and expanded a mandatory traceability system for food makers, and strengthened oversight of school lunch ingredients to promote the use of local organic produce.

Illegal drugs are a scourge on our citizens and society, and we must combat drug-related crime at the source. The government is collaborating with schools to set up a user-friendly reporting system to track the flow of narcotics and help drug users. Last year, the Taiwan High Prosecutors Office launched five series of nationwide raids that led to the largest drug haul in Taiwan's history last October. We also have plans for the Ministry of Health and Welfare (MOHW) to work with correctional facilities and provide inmates with professional addiction treatment services.

4. Achieve transitional justice, strengthen democracy

The Executive Yuan has designated August 1 as Indigenous Peoples Day in Taiwan, and we will amend the Status Act for Indigenous Peoples to restore the rights of the Pingpu ethnic groups. We also established a task force on October 14 last year to investigate the decision-making process for nuclear waste storage on Lanyu Island. When the task force reports its findings within the next six months, the government will use their report as the basis for communicating with the Yami people of Lanyu, determining compensation and achieving reconciliation.

In addition to passing the Act Governing the Handling of Ill-gotten Properties by Political Parties and Their Affiliate Organizations on August 10, 2016, the Executive Yuan established the Ill-gotten Party Assets Settlement Committee on August 30. As of February 15, 2017 the committee had received 292 petitions and reports and has launched investigations for all the cases that are within its jurisdiction.

Political documents are important records and assets that chronicle Taiwan's democratic development. To gather, manage and release political documents to the public, and thereby guaranteeing their right to know, we approved a three-year plan that will inventory, gather and catalog the documents to be used by the government and private sector for research and education in the field of transitional justice.

To highlight the importance of freedom of speech while commemorating the contributions of democracy pioneer Cheng Nan-jung, the Executive Yuan on December 9 last year designated April 7 as Freedom of Speech Day in Taiwan.

D. Reform government operations, build a sustainable homeland

1. Improve government efficiency, promote open government

The focus of government efficiency reforms is to reduce manpower and paperwork, so we will cut the central government's budgeted personnel by 1 percent this year, allowing human resources to be distributed more fairly and improving operating efficiency. We are also easing and simplifying procedures for overseeing and evaluating government programs and subordinate agencies.

In July last year, the Executive Yuan set up an interministerial task force to reform government evaluation systems, streamlining paperwork and eliminating the longstanding formality of numbers-based assessments. We also simplified procedures for government subsidy reimbursements, and will first apply those changes to social welfare and academic institutions before expanding to other types of organizations.

To promote open government and bring policies in line with the public's expectations, on October 1 last year we extended the public announcement period for proposed laws and regulations from 14 days to 60 days. Starting January 1, we have also uploaded these announcements to a public policies participation platform where the public can leave comments and get responses from the responsible agency.

2. Promote energy transformation, create a nuclear-free homeland

Our campaign to install low-voltage smart meters across the nation has begun with the goal of completing 200,000 installations by 2018, 1 million installations by 2020 and 3 million installations by 2024. The meters will give us detailed power usage information down to the day, hour and minute for over 80 percent of the country. When combined with the time-of-use rate programs for households and small businesses that we launched last October, these meters will effectively reduce electricity usage during peak periods.

In the field of renewable energy, the MOEA launched a two-year solar power promotion plan in 2016 that will increase the nation's solar power capacity to 1,520 megawatts and spur investments of up to NT$91.2 billion (US$3.0 billion).

Taiwan's first offshore wind turbine was installed off the coast of Miaoli County's Zhunan Township last October 27, marking a shift in wind power generation from land to sea.

3. Promote new agriculture, ensure sustainable development

The government is promoting a "new agriculture" policy that will create a new agricultural paradigm and ensure agricultural safety. The policy consists of 10 objectives: pay farmers for agricultural practices that are beneficial to the land, stabilize farmer incomes, enhance the competitiveness of the livestock and poultry industries, expand eco-friendly crop-cultivation practices, utilize agricultural resources sustainably, develop innovative technological advantages, enhance food security, ensure agricultural product safety, increase domestic and overseas distribution channels, and raise the added value of agricultural products and services.

To protect farmers against financial losses due to natural disasters, this year the Council of Agriculture extended an insurance pilot program to cover rice yield and sugar apple income. This is expected to provide stronger protection for agricultural operations.

Given Taiwan's geography, increasingly extreme climate patterns, and history of excessive land development, we must exercise caution to ensure the sustainable development of our natural environment.

To monitor environmentally sensitive and disaster-prone areas, in 2016 the MOEA created a database containing 444 stratigraphic position measurements and 1,225 engineering geological prospecting studies, and completed the demarcation of four types of geologically sensitive areas—active faults, landslide and debris-flow areas, groundwater recharge zones and geological relics. A small-scale map of areas prone to soil liquefaction was also released through a cloud-based application environment for use in disaster prevention, conservation and research.

To tackle air pollution, the EPA launched major policies to curb PM2.5—particulate matter measuring 2.5 micrometers or less. In addition to implementing a clean air action plan, it proposed 10 measures to control exhaust and dust pollution, and has set a target to reduce PM2.5 red alerts by 20 percent.

E. Enhance cultural education, respect ethnic diversity

1. Improve education quality, reinforce industry-academia cooperation

As part of our effort to improve the quality of preschool and elementary education, we are increasing the number of teaching positions to reasonable levels, permitting teachers to be jointly appointed by more than one school, and encouraging experimental and innovative education for more diversified learning environments.

In secondary education, our vision is to someday eliminate all entrance examinations so that students can attend schools close to home. To do that, we will increase the exam-free admissions quotas for high schools, and make all admissions exam-free in selected school districts, cities and counties on a trial basis.

To increase educational benefits for children and youth, the government is expanding public childhood education and care systems. We will also launch an education development account program this year to provide subsidies for children from low and lower-middle income households and those in long-term foster care. About 10,000 children will enter the program each year, so the number of children benefiting from this subsidy could reach 180,000 by 2034.

Starting in August, we will also implement an education and employment savings account program on a three-year trial basis to encourage high school graduates to gain real-world work experience before pursuing further education. Around 5,000 people will be selected to take part in this program each year.

To bridge the gap between employer needs and graduate skills, the government is working to transform higher education and reform vocational education. In secondary education, the Ministry of Education (MOE) is providing a three-year tuition waiver for high school students who participate in cooperative education programs. Vocational high schools and technical colleges are also joining forces with the industrial sector to offer co-op programs combining classroom learning with practical work experience.

In higher education, we continue to encourage diversified development of colleges and universities. To help the noncompetitive or poor-performing schools, we are drafting a special law on transformation and exit mechanisms for those schools and setting up a NT$5 billion (US$161.8 million) fund.

To foster industry-academia cooperation, the government set up a board last July to strengthen links among industry, academia and the research sector. The board will help ease restrictions on utilizing the results of scientific and technological research, encourage universities to shoulder more social responsibility within their communities, and create a new mechanism for connecting businesses, universities and research institutions in innovative ways.

2. Develop cultural soft power, nurture cultural and creative industries

On July 5, 2016 the Executive Yuan established a cultural committee, with me as the convener, hoping that all government agencies will make cultural development part of their policy thinking and implementation.

The Ministry of Culture (MOC) is continuing a program that helps people working in cultural fields realize their dreams of becoming cultural entrepreneurs. Sixty aspiring entrepreneurs received subsidies through this program last year to set up new cultural and creative companies. The ministry also offers preferential loans for cultural and creative enterprises, approving 35 loans in 2016 to help them get the funding they need.

And to connect individual cultural assets and other resources, the MOC is also promoting the restoration of historical sites. Fourteen historical restoration demonstration sites, organized by 13 local governments, have already been approved.

3. Build inclusive and diversified culture, promote ethnic identity development

On July 29, 2016 the Executive Yuan approved a plan dividing various policy tasks regarding indigenous peoples among government agencies, promoting 32 policies with 80 implementation tasks to ensure the rights of indigenous peoples. We have also sent the draft version of a law to promote and preserve indigenous languages to the Legislature for deliberation.

The MOHW is already promoting the relaxation of legal restrictions for immigrants to qualify for social welfare and assistance, while the MOE is advocating the recognition of academic credentials obtained by immigrants in their home countries and the preservation of their native languages. These initiatives will help immigrants assimilate into Taiwan society and provide opportunities to utilize their cultural and language expertise.

F. Ensure national security, expand external relations

1. Achieve defense self-sufficiency, shift to a volunteer military

The MND has made the domestic production of advanced weaponry, including military jets and naval cutters, a major goal. The ministry is thus promoting the domestic research, development, and manufacturing of military hardware, and planning military investment to support such domestic production to increase national defense self-sufficiency.

Progress has also been made in achieving the goal of an all-volunteer military, with 15,853 volunteer military recruits (105.7 percent of target) enlisting last year, and a 74.9 percent retention rate for volunteer enlistees.

To improve manpower efficiency, beginning this year military veterans with mid-to-high level occupational specialties who have been retired less than eight years will be recruited as volunteer reserve officers, forming a military reserve force that will continue to undergo training. This will allow the military to remain lean in normal times and quickly increase manpower in the event of hostilities.

2. Strengthen multilateral relations, promote New Southbound Policy exchanges

Upholding President Tsai Ing-wen's "steadfast diplomacy" approach, we are replacing the previous method of unilateral aid to other countries with bilateral dialogue and mutual assistance through cooperative programs. These programs will also incorporate elements that promote the development of Taiwan's industries and markets to create win-win outcomes.

Effective January 1, 2017 the Japan Interchange Association changed its name to the Japan-Taiwan Exchange Association, a milestone in Taiwan-Japan relations. Through the existing Taiwan-U.S. Trade and Investment Framework Agreement mechanism, the administration will also continue to push for a Taiwan-U.S. bilateral investment agreement, as well as a bilateral free trade agreement.

On September 5, 2016 we announced the promotional plan for the New Southbound Policy to diversify the nation's external reach and enhance links with ASEAN countries, South Asian countries, Australia and New Zealand, focusing on economic cooperation, personnel exchanges, resource sharing and regional connectivity.

In December of last year exports to New Southbound Policy target countries reached US$5.37 billion, so exports to the 10 ASEAN members are clearly on the rebound. The number of students from New Southbound Policy target countries enrolled in Taiwan educational institutions also grew by 2.1 percent last year to 29,145. In addition to growth from major ASEAN countries, the number of students from South Asia rose by 12.4 percent.

3. Maintain democratic freedoms, improve cross-strait trust and communication

The government has made "maintain the status quo" its core concept for handling cross-strait relations, and will remain committed to maintaining cross-strait peace and stability. Based on the principles of openness and transparency, public participation and legislative oversight, we will promote cross-strait interaction and negotiations, engage in positive dialogue on the basis of parity and dignity, and restore high-level discussions and negotiations to establish a consistent, predictable and sustainable cross-strait relationship.

III. United for a brighter future

The Executive Yuan appreciates the Legislature's support in passing 43 important bills that we submitted during the last session, including the 2017 budgets for the central government and subordinate units, and amendments to the Electricity Act, the Long-term Care Services Act and the Housing Act.

In the coming year, the Executive Yuan will continue to spare no effort, and requests that the Legislature continue its valuable support. Through the concerted efforts of the two branches, we hope to achieve many important reforms.

I respectfully request that you continue to give us your valuable counsel and suggestions, and want to express sincere thanks to our distinguished legislators, Legislative Yuan support staff, and friends in the media for their unstinting efforts.

Let me close by wishing one and all the very best of health, and success in all your endeavors.

Thank you!

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