Thu, Nov 18, 2010 - Page 8 News List

Large debts make vows difficult to implement

By Yang Chung-hsin 楊重信

Local governments in Taiwan’s five major cities and counties already have a serious amount of debt. The future mayors will need to have the skills to increase local finances or they will have to rely on funds and subsidies allocated by the central government, otherwise it will be very hard for them to deliver on the election promises they have been making. So why do they keep making these lofty promises?

For irresponsible political hacks, this is an easy matter to deal with. In the past, we have seen these types of politicians either fail to deliver on their election promises, blaming the central government, or borrow money to meet their promises, allowing future generations to pick up the tab.

How much money do the governments in Taiwan’s five largest municipalities owe? The figures that have been printed in the media about some of the administrations only reported the unpaid balances of those governments’ public debt; however, all cities and counties also have large “hidden deficits.”

Using information from an audit report prepared by the National Audit Office about total expenditures for city and county-level governments throughout the country, it is possible to calculate and produce statistics about the unpaid balance of public debt in all five special municipalities, as well as their hidden debt, to show a clear picture of overall debt and government debt per capita. This accurately shows the poor financial state that the country’s main cities and counties are in, which lets voters see how past governments have performed financially and indicates to candidates what sort of financial situations they will take over if they are elected.

Last year’s audit report revealed that up until the end of last year, of the eight cities and counties that will make up the soon-to-be five special municipalities, Taipei City had the highest overall debt at NT$291.7 billion (US$9.58 billion), followed by Kaohsiung City at NT$211.2 billion, Taipei County at NT$108.1 billion, Taichung County at NT$48.5 billion, Tainan County at NT$44.5 billion, Tainan City at NT$31.7 billion and Kaohsiung County at NT$26.4 billion. Taichung City had the lowest overall debt at NT$7.2 billion.

When we express these figures as government debt per capita, Kaohsiung City has the highest amount of government debt per capita at NT$138,245, followed by Taipei City at NT$111,873, Tainan City at NT$41,167, Tainan County at NT$40,263, Taichung County at NT$31,033, Taipei County at NT$27,899 and Kaohsiung County at NT$21,201. Taichung City again had the lowest government debt per capita at NT$6,725.

If we calculate these numbers based on the soon-to-be five special municipalities, we can see that Taipei City will have the highest level of government debt per capita at NT$111,872, followed by Greater Kaohsiung at NT$85,741, Greater Tainan at NT$40,634, Sinbei City at NT$27,899, while the lowest government debt per capita would be in Greater Taichung at NT$21,132.

With the elections little more than a week away, I would like to urge each candidate to face up to the financial problems in their respective governments and quit relying on the central government or future generations to pay their bills. They should come up with concrete and feasible plans to pay back their debt, as well as plans to raise funds for city and county development, as soon as possible. They should also promise to reach these goals during their tenure in office, otherwise they should promise to step down at the end of their term.

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