In an effort to maintain a sound financial system, the Ministry of Finance (MOF) in two months will announce its plan to reduce the central government’s debt, Minister of Finance Christina Liu (劉憶如) said yesterday in response to requests from several members of the legislature’s Finance Committee.
However, Liu declined to provide specific figures about the ministry’s debt-reduction goals, but she did say that cutting the deficit would be a challenging mission for the ministry given the potential impact on the nation’s economy.
Ministry statics showed that the national debt increased to NT$220,000 (US$7,440) per person as of the end of last month, up NT$4,000 per person from the previous month and marking the second consecutive record-setting month since the government began publishing the data in December 2010.
The national deficit, which includes the central government’s long-term and short-term debt, amounted to NT$5.103 trillion as of the end of last month, up from NT$5.018 trillion a month ago, data showed.
Chinese Nationalist Party (KMT) Legislator Lu Shiow-yen (盧秀燕) yesterday said the ministry needed to establish a target figure for its debt-reduction goal and quickly tackle the nation’s deteriorating debt problem.
“I want to see the ministry wipe out an average of NT$100 billion in central government debt a year for the next four years, thus driving the per capita national debt down to NT$200,000 or less,” Lu said during a question-and-answer session.
Other lawmakers, including KMT legislators Alex Fai (費鴻泰) and Tseng Chu-wei (曾巨威), Democratic Progressive Party legislators Wu Ping-jui (吳秉叡) and Hsu Tain-tsair (許添財), and People First Party Legislator Thomas Lee (李桐豪), backed Lu’s proposal.
Liu said that it would be “quite difficult” to achieve Lu’s target, but promised that she would formulate the ministry’s plan within the next two months and bring it to the committee.
Meanwhile, Liu said her most important task this year would be pushing for amendments to the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法) and the Public Debt Act (公共債務法).
Amending the Act Governing the Allocation of Government Revenues and Expenditures would help create a framework for distributing revenue to the nation’s five special municipalities, as the current act is not applicable to three special municipalities that came into being in 2010, Liu said.
Liu said the Public Debt Act needed to be modified to raise the debt ceiling for local governments, as well as increase local governments’ ability to finance themselves.
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