In the nine years former Miaoli County commissioner Liu Cheng-hung (劉政鴻) was in office, the county council’s debt soared from NT$20.2 billion to NT$64.8 billion (US$658.4 million to US$2.11 billion at current exchange rates), an increase of NT$44.6 billion. Such a hefty debt means that Liu’s successor, Hsu Yao-chang (徐耀昌), has been saddled with NT$600 million a year in interest payments.
Hsu came into the job facing the problem of not being able to pay year-end bonuses, a problem he was able to solve only by appealing to the central government.
What happened? Liu was once a media darling, with his approval ratings, not debts, doing the soaring, as one of the most popular county commissioners around. This changed on his departure, leaving both his successor and his former charges furious. Investigators have also discovered a litany of dodgy dealings he was allegedly involved in during his time in office.
Liu liked to splash out. If he did not have the cash at hand, he would borrow it, bringing the already strapped county within spitting distance of bankruptcy. He was known for his ostentatious fireworks celebrations and lantern festivals, spending NT$520 million on a 12-day Republic of China centenary lantern festival, and another NT$290 million on 22 fireworks displays for the 2012 Double Ten National Day celebrations — 10 times the amount other local governments spent on fireworks displays — a total of NT$810 million in a single year.
Another expense was inviting world-class tenors Placido Domingo and Jose Carreras, as well as soprano Sarah Brightman, to the Miaoli International Music Festival and the Miaoli International Arts Festival. The performances were free to the public, but cost the county at least NT$200 million.
The Hakka Roundhouse in Miaoli was initially funded by the Hakka Affairs Council, but that was halted in the legislature by the Democratic Progressive Party, which felt that it was not a national-level initiative. Instead, the Miaoli County government spent NT$120 million building it.
Liu did not bat an eyelid. Next, the county government organized the “Dream Plan,” arranging for selected groups to visit Miaoli on a two-day, one-night trip, at a cost of NT$60 million. Before Liu left office, the county organized the “County Government Experience,” inviting 18 local wardens and representatives, community development associations, various civic groups, community leaders and fishermen’s association representatives for a day out, blowing another NT$16 million, in what was criticized as an exercise in shoring up political support among local leaders and grassroots groups.
Liu’s reputation came crashing down following the public uproar resulting from the Miaoli County government’s forced expropriations and demolitions of people’s properties. The summer residence of his brother, Liu Cheng-chih (劉政池), which stood on public land on Yangmingshan (陽明山) in Taipei, was held against him, too, further tarnishing his reputation.
The central government is not much better. The Ministry of Finance posted a figure last month showing per capita national debt of NT$240,000, and many suspect that the ministry was revealing only the debt it is required to report under the Public Debt Act (公共債務法). Statistics show central and local -government-concealed debt, as of the end of last year, stood at more than NT$18 trillion. If you add to that the central and local governments’ long-term liabilities and short-term borrowings, the total debt exceeds NT$25 trillion, more than NT$1 million for every Taiwanese.
The government is worryingly in the red, and efforts to mitigate this have so far proven ineffectual. In addition, legislation on pension reform is languishing in the legislature and President Ma Ying-jeou (馬英九) has less than a year left in office. Soon it will be Ma’s turn to “pull a Liu” and leave a gaping hole in the public finances for his successor to deal with. The likelihood is that his own reputation will take a huge hit, just as Liu’s did.
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