The Executive Yuan on Monday said that the government would increase childcare allowances by NT$1,500 (US$46.49) per month starting next year in a bid to boost Taiwan’s birthrate.
However, Premier Chen Chien-jen (陳建仁) said that, despite the government’s budget for such measures being raised over the past seven years from NT$15 billion in 2016 to a projected NT$120.1 billion next year, birthrates continue to decline.
An increase in monthly subsidies to NT$7,000 from NT$5,500 would be welcomed by lower and middle-income families who already have children in daycare or kindergarten, but it would not encourage anyone on the fence about having children to take the plunge.
New Taipei City Mayor Hou You-yi (侯友宜), the Chinese Nationalist Party’s (KMT) presidential candidate, said that the low birthrate is driven by people getting married older and having children later, as well as by soaring housing and childcare costs.
Hou is partly right, but he neglected to mention that availability of childcare options is too limited in many parts of the country, particularly Taipei and New Taipei City. Parents hoping to put their children in a public kindergarten have to enter a lottery system. There are even waiting lists to get into private institutions.
As most couples — especially those in large cities where rent is higher — are both forced to work, sending their children to daycare or kindergarten is the only option. Many have moved from elsewhere in the country, meaning that they live far from family who might otherwise help with childcare.
Another issue is the high cost of housing. To his credit, Hou has promised that if he becomes president, he would implement a one-time housing subsidy of NT$1 million for households in an income tax bracket below 30 percent with three or more children and who do not own property.
This is more in the right direction than what the Executive Yuan is proposing, but is too limited in scope to really tackle the issue.
The government needs to rein in housing prices and speculation. A report on March 7 cited Sinyi Realty Inc as saying that average home prices in the previous quarter had topped NT$10 million in major cities, despite a slowdown in transactions amid economic uncertainty. Thirty-year mortgage costs would be roughly 33 percent of a household’s monthly income for the average family, the report said. That would be a heavy burden for a young couple also facing childcare costs.
Moreover, the average down payment on such a mortgage would be about NT$2 million, which is likely to be out of reach for many.
Rent offers little respite, with a July report showing rents in major cities were up about 2 percent year-on-year this year, which, combined with high inflation, is more than the increase in real income.
There are too many barriers preventing the average couple from raising children in Taiwan. Cities are not family-friendly, with a lack of sidewalks that can accommodate strollers, many buildings have no elevators or ramps, as well as too few family parking spaces and a lack of parking overall.
Combined with a lack of affordable housing and childcare facilities, and work environments that remain unfriendly toward parents — particularly mothers — the situation creates little motivation for couples to conceive.
If the government is serious about tackling the declining birthrate, it would need a multifaceted approach that provides more housing and childcare options, mandates flexible work environments, and fixes problems with pedestrian infrastructure and parking. If it does not make these changes, the birthrate is unlikely to increase any time soon.
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