Legal constraints and public sentiment against tax hikes leave the government little room to reverse the nation’s deteriorating finances, so it must auction rights of superficies for state-owned land, Minister of Finance Chang Sheng-ford (張盛和) said yesterday.
“Governments on all levels have outspent their incomes for years ... Overall debts are approaching legal limits,” Chang said in a speech to the Third Wednesday Club, a trade group.
Despite there being no immediate risk of collapse, the government cannot take the situation lightly, Chang said.
Chang said personnel expenses alone amounted to NT$175.5 billion (US$6.03 billion) in 2011 for local governments, higher than their revenues at NT$172.2 billion, while payrolls at the five special municipalities accounted for 80 percent of their revenues, he said.
While state-owned land totals 2.25 million hectares, or 62.48 percent of overall land, existing rules ban the government from selling plots in excess of 1,650m2 nationwide and the ban extends to plots smaller than that threshold in Greater Taipei, he said.
Chang said he disliked the idea of incurring more public debt, alluding to the lingering eurozone debt crisis, but the public were against any tax hikes. As a result, the ministry has no choice but to auction off superficies rights of state-owned land, enabling private funds to take part in public works projects, he added.
The ministries of national defense, justice and other agencies plan to auction off superfices rights for land plots in prime districts of Taipei, which may generate handsome rental yields for the state coffers, he said.