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New Party legislator wants budget adjusted for EDAC

"The government estimated the economic growth rate at 6.18 percent. However, this year's GDP is very likely to register 0.37 percent negative growth."

Lai Shyh-bao, New Party Legislator

Opposition New Party Legislator Lai Shyh-bao (賴士葆) said yesterday the government should revamp its budget for fiscal 2002 to provide for recommendations reached at the recent Economic Development Advisory Conference (EDAC).

Lai said that next year's budget plan, sent by the Cabinet to the Legislative Yuan last week for scrutiny, fails to reflect Taiwan's economic reality and does not set aside funds for implementing proposals forwarded by consensus at the Aug. 24 to 26 conference.

For instance, Lai said the budget bill estimates the government's tax revenues at NT$950 billion (US$27.54 billion) based on a projected economic growth rate of 4.16 percent for the coming year.

"In the fiscal 2001 budget bill, the government estimated the economic growth rate at 6.18 percent. However, this year's GDP is very likely to register 0.37 percent negative growth. Against this backdrop, how could our GDP shoot up so quickly next year?" Lai said.

According to Lai, if Taiwan's GDP grows only 1 percent next year, the government should lower its projected annual tax revenues by more than 1 percent.

Moreover, Lai said, since the Cabinet has decided to adopt a proposal reached at the conference to halve the land value increment tax for two years, the government's overall tax revenues would also be affected. The tax-cut plan is now pending legislative approval.

As the government's plans to privatize state-run enterprises have not proceeded as smoothly as expected in the past couple of years, Lai said, the Cabinet's estimate of revenues from sales of its stakes in those companies may be too optimistic.

In his view, Lai said, the Cabinet has overestimated its revenues for the next financial year by at least NT$20 billion.

On the expenditure side, Lai said, the budget plan didn't earmark funds for implementing some proposals unanimously agreed upon by the 120 conference members, including paving the way for opening direct links across the Taiwan Strait and setting up a special task force to craft measures for easing the "no haste, be patient," policy on China-bound investment.

Lai urged the Cabinet to finalize a detailed plan for implementing major proposals recommended by the conference as soon as possible to enable the Directorate General of Budget, Accounting and Statistics to revise the budget bill accordingly. Otherwise, he said, the legislature may decline to screen the bills in its coming session, which will begin in the middle of this month.

Commenting on the recent controversy over proposed lavish spending on Vice President Annette Lu's (呂秀蓮) residence in the Cabinet-drafted budget bill, Lai said he suspected that the unusually detailed spending plan might reflect internal strife in the Presidential Office. He said he would urge his legislative colleagues not to screen this part of the 2002 budget plan to avoid involvement in political wrangling.

In response, the DPP's legislative caucus leader Tsai Huang-lan (蔡煌瑯) said that it was too late to revamp the Cabinet's budget bill for implementing the conclusions of the Economic Development Advisory Conference.

"There are other alternatives to earmark funds for the [conference's] conclusions, and it's not necessary to reflect this on the Cabinet's budget bill," Tsai said.
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