TAIPEI - WITH the Year of the Ox only a week or so away, the government spread festive cheer yesterday by handing out shopping vouchers to the island's 23 million citizens.

Young and old alike each received NT$3,600 (S$160) in vouchers in the NT$85.7billion move aimed at spurring domestic spending to boost the economy.

In scenes reminiscent of a polling day, thousands queued up, identity cards in hand, at 14,202 centres across the island to get the vouchers.

By the time collection ended at 5pm yesterday, officials estimated that nine out of ten had collected their gifts.

Urging the public to spend and save the economy, government leaders, including President Ma Ying-jeou and Vice-President Vincent Siew, went on their own shopping sprees. Carrying about NT$14,400 worth of vouchers, including those for his wife and two daughters, Mr Ma left Taipei for Kaohsiung and Pingtung counties in the south, where he bought NT$16,888 worth of goods.

He said the vouchers had been given out before Chinese New Year so people would not have too miserable a New Year amid the economic downturn.

'It's not just for the economy, it's also to let the people feel the government's concern for them,' he said.

Many countries were waiting to see if Taiwan's move worked, he added.

But some Taiwanese have questioned whether the vouchers can boost gross domestic product by the envisaged 0.64per cent, given that surveys have consistently shown that two in three intend to use the vouchers on their usual daily necessities and not on anything extra.

Security guard Shih Tzu-an, 72, is one such sceptic. He said: 'I will just use the vouchers to buy household goods like oil or salt so that I can save.'

Indeed, Taiwanese tend to save their spare money for a rainy day - so the hoped-for multiplier spending effect of the coupons might not be realised. Taiwan's economy is also unlikely to benefit if people spend on imported goods.

Yesterday, economists and leaders urged the public to do their bit by spending on Taiwanese goods and to use the vouchers as soon as possible, so as to maximise their impact.

They also advised people to use the vouchers to buy from hawkers and other businesses that are not among those allowed to exchange them for cash, and thus have to use the vouchers in turn, generating further rounds of spending.

To cash in on the coupons, businesses rolled out various special deals, with one supermarket offering free breakfasts and shuttle services to ferry people from collection centres to its store.

While some electronics stores reported increased sales yesterday, hawkers at a Chinese New Year fair had no such luck. Some said they could not compete with supermarkets, which tie hefty discounts to the vouchers.

'I feel there's not much impact today,' said dried goods hawker Chang Wei-sheng, 48.

Yesterday, reports on the vouchers eclipsed the release of a new book - Taiwan's Cross - by former president Chen Shui-bian, who is detained on corruption charges and likely to spend the New Year behind bars. He is due to appear in court today for a pre-trial hearing.