The plan received highly positive responses from both the business community and the public as it imposes on restrictions on the status of the recipients regardless of income level.

Liu told a news conference that the program is expected to raise the country’s gross domestic product (GDP) growth by 0.64 percentage point for 2009 if all the coupons are used for shopping.

Under the program, each citizen holding the nation’s ID card will get NT$3,600 in coupons that will be valid until the end of 2009, to purchase goods, Liu said.

Wealthy citizens can opt to donate the coupons to charity organizations and get a tax deduction, he said.

The Cabinet led by Liu decided not to exclude the rich from the program because it is not intended as a kind of social assistance.

“The policy is aimed at stimulating consumption, a measure based on economic consideration,” Liu said.

He said the Cabinet hopes the program could be implemented as early as possible, preferably before the beginning of the Chinese New Year holidays in late January.

Distributing the consumption vouchers is one of the economic and financial avenues to help the people cope with the global economic downturn, he said.

The Legislative Yuan, which is dominated by the ruling Kuomintang, has agreed to ratify the special bill and budget in time.

Taiwan’s GDP growth reached 5.72 percent in 2007 and the figure is expected to slow to between 3.5 percent and 4.8 percent this year due to the global economic turmoil.

An increasing number of economists and analysts now predict the GDP expansion will slow down further to under 2 percent in 2009.

Distribution channel

The coupons will be issued to citizens through the departments of domicile affairs at local administrative offices, according to Chen Tain-jy, chairman of the Council for Economic Planning and Development.

The vouchers can be used in any retailing outlets, restaurants or any commercial facilities with business registration certificates.

Providers of products and services may deposit the vouchers they received from customers directly into their bank accounts after placing corporate or store chops on the coupons.

Consumers, however, will not be able to use the coupons at the traditional markets, eateries or street-side vending stalls because they usually do not have the business registration certificates issued by government agencies, Chen said.

No change will be given to shoppers who do not fully use the amount denominated on the coupons because the key purpose of the vouchers is to encourage spending, he said.

Support

Consumers welcomed the premier’s announcement, describing it as a “red envelope” gift for the New Year holidays from the government. Many started toying with a shopping list since a family of three will get an equivalent of more than NT$10,000 in cash.

Business and industry executives said the shopping voucher plan will bring a timely relief for many struggling companies.

Some enterprises have started working out marketing strategies and promotion campaigns to lure more holders of the coupons to buy their products.

An economist commented the plan is on a right track because it does not exclude people with higher incomes from getting the coupons.

The plan will certainly help to boost some spending over the next couple of quarters, although it will need extra measures to boost the economic growth numbers, he said.

Chairman Hsieh Tien-jen of the Consumers Foundation also backed the plan. But he suggested the government overcome obstacles to implement the measure as early as possible.

The government should also consider allowing shopping at street vendors or eatery operators because they are in greater need of a helping hand than the large chain stores and food giants.

Opposition

The Democratic Progressive Party maintained its opposition to the plan, saying the government should give people tax rebates or cash as a way of spurring spending instead of wasting money printing the coupons.

But if the Legislative Yuan eventually approves the voucher program, the senior officials should donate their vouchers to charities, said DPP lawmakers.

Some environmentalist organizations also voiced criticism at the purchase coupon plan. They said the government should help promote resources conservation rather than encouraging consumption.