Fri, May 23, 2008 - Page 12 News List

Lee finds funds for stimulus measures

STIMULATING THE ECONOMY Minister of Finance Lee Sush-der said the government would use up to NT$40 billion of the special budget and this year’s additional tax income

By Joyce Huang  /  STAFF REPORTER

Three days after taking office, Minister of Finance Lee Sush-der (李述德) said yesterday that the ministry has identified the financial resources to fund the Cabinet’s newly announced “three economic stimulus” measures.

At its first meeting, the Cabinet approved plans to expand domestic demand, to facilitate weekend cross-strait charter flights and increase the number of Chinese tourists, as well as schemes to stabilize consumer prices, all of which is estimated to cost NT$120 billion (US$3.95 billion).

Some NT$30 billion to NT$40 billion of the central government’s special budget reserves and this year’s additional tax income would be utilized to fund the measures, Lee told a media briefing yesterday.

The ministry also plans to generate income by speeding up the sale of shares in state-owned or government-controlled companies, sales which have been long scheduled, Lee said.

He refused to elaborate on which company shares the ministry plans to sell and the estimated income the sale would generate.

“But we will never borrow to fund these measures,” Lee said.

The ministry, in addition, plans to cut taxes on oil imports from 10 percent to 5 percent to ease inflationary pressure following the Cabinet’s planned hike of fuel and utilities prices.

Lee, formerly the Secretariat Director of Taipei City Government, said that he has no timetable for the privatization of government-run banks and financial holding companies.

As long as the price is right, rights of shareholders and bank employees are protected, sales of government-owned bank shares will be facilitated in an “open and transparent process” to provide a “win-win-win” situation, he said.

That principle also applies to the planned merger between state-controlled Chang Hwa Commercial Bank (彰化銀行) and Taishin Financial Holding Co (台新金控), which is the bank’s second largest shareholder.

“We won’t rule out the possibility that Chang Hwa could expand into a financial holding company via an open and transparent mechanism with potential buyers other than Taishin,” he told reporters after the media briefing.

Lee also threw his support behind Mega Financial Holding Co’s (兆豐金控) rumored China-bound expansion, on the precondition that such an expansion was in line with financial regulations.

“If such an expansion, with the appropriate approval from the financial regulator, is money-making and good for shareholders, why not?” Lee said.

Media reports have speculated that Mega Financial may acquire shares in China’s First Sino Bank (華一銀行), although the financial services provider has flatly denied the speculation.

The ministry, moreover, will set up a taxation reform committee to overhaul tax rates and the taxation system although the committee’s make-up is still in the planning stage, he said, vowing to come up with “tax reforms that most people will find acceptable, although not everyone will be pleased.”

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