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June 23, 2017

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Gov't shrouds wealth gap, gives more cause for concern

Amid Taiwan's tepid economic recovery, stagnating growth in wages and rising costs of housing and goods prices, the Ministry of Finance yesterday announced that it would spare the public the details of Taiwan's widening wealth disparity, as the gap between the incomes of the top and bottom five percentile of the wealthiest and poorest households in 2012 is anticipated to expand beyond the one-hundredth-fold benchmark.

According to a bulletin by the Directorate General of Budget, Accounting and Statistics (DGBAS), the Ministry of Finance will no longer be publishing the tallied statistics on the wealth disparity of Taiwan in full detail.

The Ministry of Finance previously published informative statistics on the current state of wealth distribution among the Taiwan populace. Following the change, the information will no longer be quantified through the statistical measurement of the vigintiles (20-quantiles) and deciles (10-quantiles) by tallying the income tax declarations submitted by Taiwan's 5.6 million tax paying households. Instead, the ministry will now only publish the information in quintiles (5-quantiles), depriving the public a crucial data set for study and discourse.

The ministry stated that the move is aimed at "elevating Taiwan to meet international conventions, and promote transparency."

The change, however, will bring little transparency as the broader strokes of quantifying data by quintiles instead of deciles and vigintiles will obscure the details of Taiwan's distribution of wealth, and the concentration of wealth among the top five percentile.

The quantification of information by vigintiles ranks the 5.6 million tax paying households in 20 categories, with each representing about 5 percent or 280,000 households, which allows analysts to track pace of growth in wealth in much greater detail, in particular of those fortunate enough to make the top five percentile.

From 2005 to 2011, tax declarations indicate that income among the top five percentile grew markedly from an average of NT$3.969 million to NT$4.635 million, while the middle-class households, represented by the 10th quantile, saw their incomes grow at a much lesser pace from NT$527,000 to NT$549,000. Following the change to cease the publication of data in 10 and 20 quantiles representation, analysts may no longer track changes in income of the aforementioned demographic with comparable precision.

Incidentally, the government in August last year lauded a report published by the DGBAS indicating that the average annual disposable income of the richest families last year was 6.13 times higher than that of the poorest families, a figure slightly lower than the 6.17 times recorded in 2011, and the lowest level seen since 2008.

Meanwhile, commentators have since stated that the change represents a continuation of President Ma Ying-jeou's habit of expending more efforts on salvaging his languishing public approval rating than on tackling the issues at hand. Most notably, the decision to exclude the publication of the data when the outcome is anticipated to be unfavorable, along with the government's hollow explanations is blatantly questionable. The move will only draw the ire of scholars and analysts, who are poised to scrutinize the issue more carefully in the absence of published data.

In addition, Ma's aversion to addressing the issues at hand extends to the government's recent announcement to halt construction on the Fourth Nuclear Power Plant. Instead of hanging the specter of rising costs of energy and hampered industrial sectors on the populace, the government should first examine Taipower's (台電) long list of operational inadequacies that has resulted in mounting annual losses, not to mention rampant malfeasance and corruption among the company's leadership, such as questionable procurement deals, investment bids and the slew of unfathomably unfavorable contractual agreements it entered into with a number of private energy companies.

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