01 · INSIGHTS
Universal Cash Handout—So What?
Universal Cash Handout—So What?
Universal cash handout itself is not the problem—the problem is the distribution structure behind it where "accounting growth, but workers don't feel it." Giving everyone money collected from excess taxes or borrowed debt once is festival-style almsgiving; what really needs to be done is correcting the entire structure of low labor share, exchange rate policies suppressing workers, and long-term low labor conditions and minimum wages.
I. Universal Cash Handout—How Does the Government Explain It?
On October 23, 2025, the Presidential Office announced the "Central Government Special Budget Act for Strengthening Economic, Social, and Livelihood National Security Resilience in Response to International Situations," and the Executive Yuan immediately announced a universal cash handout of NT$10,000 per person. Registration began November 5, ATM cash withdrawal opened November 17, deadline April 30, 2026. The official narrative for this money was "strengthening livelihood resilience in response to international situations," distribution method followed the 2023 NT$6,000 model, no means-testing.
Less than a year later, on August 17, 2026, President Lai Ching-te approved again, announcing the 116th fiscal year (2027) central government general budget will add NT$235.7 billion in expenditures, NT$10,000 universal cash handout per person. The slogan changed to "AI dividends, shared by all," emphasizing promotion under balanced revenues and expenditures, zero real borrowing. Executive Yuan sources revealed if the Legislative Yuan can pass the general budget in third reading before end of 2026, citizens could receive funds before Lunar New Year 2027.
But the Audit Office pointed out this case "lacks planning and benefit evaluation," noting the government still has NT$869.6 billion pending borrowing, heavy fiscal burden. The Audit Office as early as June 2024 wrote to Ministry of Finance requesting research on establishing universal cash handout effectiveness evaluation mechanism, but last year's operations still not included.
The government's framework is clear: both times use "economic growth dividends → shared by all" as narrative axis. 2025 emphasized "strengthening livelihood resilience," 2026 put on "AI dividends" new clothes. Both emphasized "balance, no borrowing" to defuse "cash handout = money printing" criticism—2025 used special budget, 2026 used added expenditures "revenue-expenditure balance." But Audit Office already pointed out "still pending borrow NT$869.6 billion, lacks benefit evaluation" these two weaknesses.
II. Policy Vote-Buying, or Returning Money to People?
The pro side says this is returning taxes to people, sharing prosperity with all. 2025 round, government said this was strengthening livelihood resilience in response to international situations; 2026 round, slogan is "AI dividends, shared by all." The con side says this lacks planning and benefit evaluation. Audit Office pointed out lacks planning, lacks benefit evaluation mechanism, finance still has NT$869.6 billion pending borrowing. Academia also says universal cash handout may not be used for promoting domestic demand or improving structure, is one-time rhythmic stimulus.
Turn the lens to workers' side. Ministry of Budget, Accounting and Statistics data shows 113th year (2024) employee compensation as % of GDP 43.1%, historic low. Central Bank March 2024 special report same caliber approximately 43.9% (note: that report caliber is 2022). Early 1990s, Taiwan labor share maintained above 50% for 7 consecutive years; recent decade mostly below 45%. International comparison more obvious: US 52.2%, South Korea 52.1%, Japan 52.6% (Storm Media 2024 July 15 Ji Fan viewpoint compilation), Taiwan approximately 8-9 percentage points lower. Central Bank special report also points out: Taiwan cumulative economic growth rate higher than US, Japan, Korea, but real hourly wage cumulative growth rate lower than Korea.
113th year employee compensation YoY growth 7.27% wrote 27-year high, but same year corporate operating surplus YoY growth 16.29%—capital took far more than workers.
Maybe it was our money originally. That is to say policy vote-buying and returning money to people, appear to both be true simultaneously. Taiwan workers long suppressed with low wage treatment (see Chapter 4 exchange rate and share structure), therefore now receiving ten thousand, six thousand, essentially partly is "repayment for undervalued labor," another part is "election-year rhythmic policy almsgiving." But if it's just "repayment," shouldn't use "government benevolence" gratitude narrative packaging—otherwise this becomes "return what's owed to me, still want me to be grateful."
III. Universal Cash Handout = Inflation?
Fisher's Equation of Exchange writes clearly: M×V = P×T, i.e., money supply times velocity equals price times transactions. When productivity not improved, if circulating money excessive (M rises but T not increased), price P will rise, this is inflation. Friedman had a famous quote: "Inflation is always and everywhere a monetary phenomenon." Money's essence is a kind of IOU, used to purchase services or labor results, itself doesn't create output.
Under normal circumstances, productivity not improved, resources not at full capacity, if massively increase circulating money while total supply not increased, will push prices up. Extra issued money doesn't truly improve per capita purchasing power, just makes nominal money more, real purchasing power diluted. Excess money issuance won't solve productivity bottlenecks. Even if everyone gets extra cash, if production capacity unchanged, your extra money is just competing for limited "good things," finally prices bid up, purchasing power not improved. Therefore, "universal cash handout = directly boosting everyone's purchasing power" is illusion; it must be built on premise "has corresponding real output, and won't be eaten by prices." If this premise doesn't hold, it has no improvement to everyone's real purchasing power, may even cause inflation.
Of course, quantity theory of money has stickiness in "funds sucked into wealth management without delivery" era; in "overcapacity, insufficient demand" recession scenario, increasing money issuance may not immediately cause inflation, may first be absorbed into investment or reduce deflationary pressure. 2026 Taiwan in "high growth, not lacking" scenario, conclusion closer to normal situation. Taiwan recent years CPI low (2024 around CPI YoY mostly around 2%), no fierce inflation seen—this shows large cash handout if conducted as "stock transfer/taxation → distribution" rather than "issuing base money," short term may not push prices. This point needs to distinguish "fiscal transfer (taxation → distribution)" from "central bank money printing" two things.
If government uses "existing excess tax revenue" or "government expenditure transfer" to universally distribute (not central bank money printing), then it's just "moving money from A to B," may not add total purchasing power, inflation pressure lower. But this also means "universal distribution's real weighting per person limited," again supporting "what received mostly is structural repayment, not new purchasing power." If financed by "borrowing, money printing," then really must bear inflation risk. Audit Office pointed out "still 869.6 billion pending borrowing," is warning signal in this direction.
IV. Why Is Taiwan Different?
As above, Taiwan employee compensation as % of GDP: 113th year 43.1% (Ministry of Budget, Accounting and Statistics), Central Bank same caliber 43.9% (2022). US, Korea, Japan approximately 52%, Taiwan lower 8-9 percentage points. 113th year employee compensation YoY growth 7.27% wrote 27-year high, but same year corporate operating surplus YoY growth 16.29%. 2024 average per capita monthly total salary approximately NT$60,984 (full year approximately NT$732k); salary median approximately NT$546k; per capita GDP approximately NT$1.088 million. Using average salary divided by average employed person (labor GDP per capita approximately NT$2.2 million) output, workers receive approximately one-third of their own output.
The Economist November 13, 2025 cover special "The hidden risks in Taiwan's boom" directly pointed out Central Bank maintaining export competitiveness, long-term suppressing NT dollar exchange rate, burying economic imbalance for Taiwan. Using GDP-adjusted "Big Mac Index," NT dollar undervalued approximately 55% vs USD. Past 5 years chip and server exports exploded 3x, but NT dollar long-term low equivalent to "invisible tax" on general public—households relying on imported food, energy, purchasing power eroded. Since 1998, Taiwan labor productivity doubled, salary growth clearly lagged; measuring worker compensation's "unit labor cost" declined 25% same period. Central Bank to suppress exchange rate, bought massive USD in forex market, injected huge NT liquidity, interest rates long-term low, excess money flowed into housing market; since 1998 Taiwan housing prices rose approximately 4x, Taipei housing price-to-income ratio median reached 16x, surpassing London, New York, Seoul. Financial risk aspect, current account surplus expanded, funds flowed into life insurance industry reinvesting in USD assets, once NT dollar sharply rises, will trigger financial systemic risk.
Central Bank November 30, 2025 letter to The Economist editor proposed 8 clarifications: since 1989 implementing managed floating exchange rate system, based on legal responsibility necessary to intervene to maintain dynamic stability, did not deliberately suppress. Some commentators (Business Insider) pointed out "Big Mac Index" academically rather sloppy, and Central Bank also needs to balance export-oriented maintaining growth.
But, Central Bank rarely quickly jumped out to clarify, wouldn't that make you feel like it's covering up? Taiwan is typical "export-oriented" economy, exports are growth engine. Therefore government (Central Bank) has strong incentive to maintain export competitiveness, suppress exchange rate, to avoid currency strengthening hurting exports. But exchange rate suppressed, equals "sacrificing import purchasing power and domestic demand workers," relatively "subsidizing exporters/capital." Consumers/workers receiving money, when buying imports and energy becomes less valuable, real purchasing power eroded, even if nominal salary slightly rose. This is "capitalists relatively profit, workers relatively lose" structure.
Ah-Bei famous quote: "Current government-business relationship is very elegant, I give you a convenience, then how do you repay during election? That's not directly into your account, so current government-business relationship, sometimes jokingly said, eating human flesh with knife and fork, all very elegant."
We don't care who said it, conglomerates eating human flesh with knife and fork, seems somewhat reasonable to a certain extent?
Returning money to people may really be true: Taiwan workers long-term unreasonably treated. Low labor share plus exchange rate policy suppression plus export-only direction, trinity, caused "striking economic data, empty pockets" structure. Therefore universal distribution 6k, 10k, essentially is "long-term suppressed workers' partial repayment."
V. But
Universal cash handout treats symptoms not root cause. Money is from taxes or transfers, didn't change "low labor share + exchange rate suppression + structural imbalance" fundamentals. If government truly has ability, should improve entire structure, but you shouldn't have expectations for government, never (government is composed of mediocre people, don't expect government to help solve your life difficulties, please focus on self-growth).
Increasing labor share is primary task. Employee compensation as % of GDP only 43%, should move toward international 50%+ direction—through improving real wages, tax cuts benefiting workers, improving employee contract structure. Labor Standards Act enforcement needs strengthening implementation of legal working hours, overtime pay, rest time, curb responsibility system, illegal contracting exploitation. Labor environment needs improvement, including occupational safety, occupational injury, middle-aged and elderly employment protection. Comprehensively review outdated unreasonable corporate subsidies, examine whether subsidies and preferences for capital side are reasonable, transfer resources to workers and domestic demand. Rethink monetary and exchange rate policy, re-evaluate "suppress exchange rate to protect exports" long-term costs, consider how to achieve balance between export competitiveness and worker domestic demand purchasing power.
If government has ability, should improve that entire set—labor share, labor environment, outdated subsidies, exchange rate policy. What's less taken far exceeds ten thousand, probably every year less taken not just 100k. This is justice that should naturally be realized, but packaged as government caring for people, buying affection story, can't be called very responsible.