Yu mulls options in funding battle

Premier Yu Shyi-kun's Cabinet is mulling two options in its strategy to deal with recent changes to a budget law that would give local governments an additional NT$150 billion from the central government's pocket annually.

The first option is to propose a revision to the changes, which would bog the plan down in a legislative process that could take months or even years to play out.

The other is to simply ask that the amendments simply be overturned. A final decision is expected tomorrow.

Should the government ask for the amendments to be overturned, the Cabinet must send a request to the president before Thursday before proceeding to the legislature, according to the Constitution.

Lawmakers are required to reach a final decision within 15 days of receiving the request.

Should one half of 225-member legislative body veto the request, the premier would have no choice but to accept the original changes to the budget law. The changes would then go into effect three days after they're promulgated by the president.

A vote in favor of the request would invalidate the changes, which were made by the previous legislature.

Still, the Cabinet could propose revisions to the amendments, sending them back to an uncertain fate in the legislature.

Yu said yesterday that the Cabinet will be cautious in the strategy it decides to adopt. "We won't opt for overturning the amendments unless there are no other alternatives," he said.

Yu said requiring the central government to give local governments NT$150 billion a year would cut into funding for other programs.

The money will go into the nation's tax redistribution fund, which is earmarked for local governments.

The allocation changes "won't result in any increase of the tax redistribution fund as the opposition parties claim," Yu said. "Instead, it will make the central government's financial situation more difficult."

The previous KMT-dominated legislature made the changes to the Law Governing the Allocation of Government Revenue and Expenditures during the final days of the last legislative session. Since then, the Cabinet has been criticizing the proposal and mulling a way to overturn the law.

Lawmakers made the changes at the behest of Taipei City Mayor Ma Ying-jeou (馬英九).

Compounding the problem is the central government's tight budget this year. The previous legislature reduced the government's revenue projections of NT$1.34 trillion by NT$81.2 billion. It also cut proposed spending of NT$1.59 trillion by NT$12 billion.

"It really makes things extremely difficult for us," Lin Chuan (林全), head of the Cabinet's Directorate General of Budget, Accounting and Statistics, said of the legislature's budget tinkering.

Lee Ying-yuan (李應元), Cabinet secretary-general, was busy yesterday soliciting opinions and support from the KMT and PFP legislative caucuses.

While the PFP caucus said it would help the DPP formulate a revision to the changes, the KMT said it would be inappropriate to overturn a two-week old law.

Diane Lee (李慶安), convener of the PFP legislative caucus, called on the Cabinet to make a "wise decision" to avoid partisan confrontation in the legislature.

She was also upset by the Cabinet secretary-general's remarks that the previous legislature had rushed the changes through.

"So are you suggesting that all the laws enacted during the previous session need to be overturned because we failed to do a good job?" she said.