Fri, Aug 25, 2017 page8

• Review state-run enterprise budget

  • By Lau Yi-te 劉一德
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  Following the major power outages that affected many areas of Taiwan on Tuesday last week, the finger of blame is being pointed at the Ministry of Economic Affairs, Taiwan Power Co (Taipower), CPC Corp, Taiwan and even contractors.

  The Legislative Yuan should share the blame. A look at its recent history of reviews of the budget for state-run companies reveals that the Legislative Yuan has not been properly performing the duties entrusted to it by the public.

  The legislature’s long-running negligence in overseeing this budget might make it the real culprit behind power outages that could turn into a national security crisis.

  It would be difficult for the legislature to shrug off the blame.

  Article 51 of the Budget Act (預算法) states: “The general budget proposal shall be forwarded to the Legislative Yuan for review and approval one month prior to the beginning of a new fiscal year.”

  The legislature’s customary practice used to be to review the central government’s general budget for the next fiscal year during the second half of the preceding year and then to use the first half of the next year to review that year’s budget for state-run enterprises.

  However, the legislative review of the state-owned company budget for 2012, which should have been completed by the end of June that year, did not receive its third reading until the middle of December.

  The next year — 2013 — the legislature did not finish reviewing the budget at all.

  In 2014, 2015 and last year, it took until December to pass the budget — half a year later than the customary date.

  Now it is August, and the state-run enterprise budget for this year is still sitting in the legislature.

  The pattern of the legislature’s handling of the huge budget in recent years has been that it either does not finish reviewing it at all or it reviews the budget at the end of the year, as if it were the final account.

  With such poor legislative oversight, it would be surprising if state-run companies did not have problems.

  A comparison of the legislature’s regular and extraordinary sessions highlights the problem.

  The Legislative Yuan’s current session, a four-month-long regular session, had only 15 yuan sittings — plenary sittings as opposed to committee meetings — which took place over a total of 27 days.

  However, during the three-month period when the legislature was supposed to be in recess, three extraordinary sessions were held, adding up to 33 days.

  More time was spent holding extraordinary sittings than regular ones. This is a typical example of slacking during regular sessions and then using extraordinary ones to rush things through.

  Even so, the legislature has set aside the long-delayed budget for state-run enterprises — a regular annual budget amounting to more than NT$5 trillion (US$165.21 billion) — so that it has still not been reviewed.

  Instead, the legislature hurriedly approved the budget for the Forward-looking Infrastructure Development Program, which at about NT$400 billion is less than one-10th the size of the enterprises’ budget.

  Such priorities are hard to comprehend, and to call the legislature negligent would be putting it mildly. It is difficult for the public to believe that a legislature that cannot keep tabs on a regular budget can do a proper job of overseeing a special one.

  To avoid disrupting the nation’s governance and impeding its development, the Budget Act provides a remedial measure in Article 54, which basically says that if a review of the general budget proposal cannot be completed within the given time limit, administrative departments have the power to disburse funds according to the standards agreed upon for the previous fiscal year.

  This means that budget items that have not been reviewed are not deleted, so administrative departments can go ahead and use them up.

  This dubious practice has been going on for many years, opening a big back door to walk through when the Legislative Yuan fails to review budgets on time and allowing belated budget reviews to gradually become the normal state of affairs.

  Consequently, the legislature’s power to review budgets has gradually ebbed. On the one hand, it does not oversee budgets effectively, while, on the other hand, it has failed to prevent special budgets from being drawn up one after another.

  The Legislative Yuan long ago became a mere rubber stamp as far as budgets are concerned.

  Article 63 of the Constitution says: “The Legislative Yuan shall have the power to decide by resolution upon statutory or budgetary bills or bills concerning martial law, amnesty, declaration of war, conclusion of peace or treaties and other important affairs of the state.”

  This shows that the power to review budgets and bills is one of the important functions and powers of the legislature. This power must not be surrendered, as only by exercising it can the legislature provide checks and balances to the ever-stronger executive branch of government.

  In 2013, the US House of Representatives, by not reviewing and approving the government’s budget within the time limit, forced many government agencies to suspend operations for 16 days. The shutdown ended when then-president Barack Obama’s administration made concessions to Congress on a number of policies.

  In Taiwan’s case, closing the back door that exists when budget reviews are not completed on time and removing ministries’ and agencies’ power to spend money according to previously agreed budgets would make the Legislative Yuan more responsible and effective at reviewing budgets.

  As this is integral to the basic democratic principle that the legislature should provide checks and balances to the executive branch. Realizing such a change is an urgent task for the legislature.

  In the third extraordinary session held during this year’s recess period, the legislature invited Premier Lin Chuan (林全) to report on last week’s power outages, and rightly so.

  However, the legislature should still promptly review the budget for state-run industries for fiscal year 2017 — better late than never.

  In so doing, the legislature could thoroughly investigate negligent practices that Taipower, CPC Corp and other state-run enterprises have been getting away with. It would also satisfy their duty to the public, thus polishing the legislature’s tarnished image.

  Lau Yi-te is chairman of the Taiwan Solidarity Union.

  Translated by Julian Clegg
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