Inspired by the US National Debt Clock, the Ministry of Finance launched a “national debt clock” on its Web site and electronic bulletin boards, to be updated on the seventh day of each month as of Dec. 7. The clock is to serve as a reminder to government agencies to increase revenues and reduce expenditures to help reduce the national debt, as well as to introduce some transparency to the debt situation.
Ministry figures show the central government’s debt totals NT$4.3218 trillion (US$144.6 billion), while temporary debts totaled NT$235 billion by the end of last month, with an average debt burden of NT$197,000 per person. In other words, every newborn baby in this country is already in debt, courtesy of the last generation. Since the government does not have enough ready cash, it is spending the next generation’s money, and it is spending more and more.
Exactly how was the figure of NT$197,000 per person reached? Such a figure was strongly challenged when it was announced. The Fair Tax Reform Alliance says amount of debt per person has tripled to NT$600,000, while the Democratic Progressive Party (DPP) says it is more than NT$900,000. The DPP’s figure was very worrying, as it takes into account the central government’s nonprofit funds of NT$579.5 billion and both the central and local governments’ hidden debts of NT$15.4471 trillion
Who should be responsible for this build-up of debt? The national debt accounted for 27.8 percent of GDP when former president Lee Teng-hui (李登輝) of the -Chinese -Nationalist Party (KMT) stepped down in 2000 and 30 percent when former president Chen Shui-bian (陳水扁) of the DPP stepped down in 2008 — an increase of 2.2 percentage points in eight years.
Since President Ma Ying-jeou (馬英九) took office two years ago, it has increased by another 4 percentage points. History will not be kind to his administration unless he does something to reduce the debt.
Nobody seems to know exactly how the government is trying to stimulate the economy by raising the debt. What does seem quite clear, however, is that Ma is recklessly wasting money in the interests of boosting his re-election chances.
The Taipei City Government spending more than NT$10 billion on the Flora Expo is a good example of this. The government seems intent on a spending spree, but what happens when the money runs out? It could try tax hikes to generate revenue. The second--generation national health insurance (NHI) program now before the legislature is a case in point. It shows how the government treats salaried workers and the disadvantaged.
Health insurance is a key index of the medicare and social insurance system in an advanced country. No one objects to reforming the existing NHI structure to ensure its healthy development and survivability. However, are the proposed reforms in line with the principle of fairness and justice?
Perhaps this is the key to whether the proposed NHI reform can obtain majority support in society and be run efficiently and sustainably. A cursory look at the design of the so-called “virtual income” in the draft proposal is enough to reveal how ruthless Ma’s government is being.
The concept of a basic premium based on a virtual income is designed to target the 8 million people who do not declare taxes — after all, surely some of them have the financial means. As a result, the government has come up with a virtual monthly income of NT$17,280.