Thu, Mar 14, 2019 - Page 8 News List

No surprise that local governments have no cash

By Chang Kuo-hui 張國輝

The Ministry of Transportation and Communications has announced a summer travel subsidy program, following on from its “warm winter” promotions, subsidizing travel to locations in Taiwan to the tune of about NT$30 billion (US$970.6 million). It is spending another NT$8 billion on subsidizing taxi upgrades. The government keeps pulling all this money out of its hat as election sweeteners.

Given the budgets being submitted by local governments following the changing of the guard in most of them after the local elections in November last year, it seems the new mayors and county commissioners have worked out that the proverbial cupboard is quite bare.

With this comes the distinct possibility that many of the checks they signed with their campaign promises will bounce. This is perhaps the reason behind the Changhua County Government declining to take responsibility for hosting next year’s Taiwan Lantern Festival, for which it elicited appropriate ire from the online commentariat.

Government finances are a constant headache at the central and local government levels, especially over the past few years. Local governments have been offering sweeteners, such as welfare initiatives for elderly people or child subsidies, and it could be said that the trend is on the rise.

In the case of Taichung, for example, residents have had the provision of free bus services, which did not come with a sunset clause from the beginning, and which — due mainly to election considerations, no doubt — have even been expanded, further eating away at the local government’s limited resources.

Another example is free entry to the Taichung World Flora Exposition, which has now been extended to all Taichung residents.

Governments at all levels have at their disposal ways to expand their sources of income, while finding new ways to economize on expenditures. The central government can rely on state-owned enterprises to turn on the income tap, but local governments have long had to rely on borrowing, selling off land or securing subsidies from the central government to pay for administrative commitments or commission construction projects.

Perfectly valid and legal policies to boost finances have one after the other been snatched away by elected representatives; welfare is provided universally, even to the well-off who do not need it; and sometimes tax is not collected from those who should rightly pay.

One of the clearest examples of this is the waiver of payments for the use of cremation facilities, initially offered as an incentive for people in the proximity of the funeral parlor, but extended by local councilors to all city residents. The local government will lose hundreds of millions of New Taiwan dollars every year for this reason alone.

Over the past 20 years, local governments have been vying with each other for a larger piece of the fiscal pie under the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法) or for more leeway to borrow according to the provisions in the Public Debt Act (公共債務法).

However, if one were to look at the local governments’ self-governance regulations, one would be hard pressed to find any regulations on sourcing income or economizing on expenditures, which is why it is so difficult to achieve and why local governments continue to fritter away money.

This story has been viewed 2216 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top