Yu says extra budgets needed

Premier Yu Shyi-kun said yesterday the slow global economic recovery and a looming US-led war against Iraq render two extra budgets necessary in order to boost domestic demand and curb unemployment.

Yu's explanation, however, failed to speed up review of the two bills, as the legislative caucuses decided later in the day to put them on hold until legal obstacles have been removed.

The delay is meant in part to appease opposition lawmakers who insist the two budget plans, aimed at funding two job-creation programs at a cost of NT$70 billion, were hastily put together.

Yu, making his second address to the legislature in three days, reiterated that the economy is no longer in the doldrums as GDP rose 3.5 percent last year, compared with negative growth of 2.18 percent in 2001.

Private investment, which contracted by 29.17 percent in 2001, posed a modest growth of 1.56 percent last year, he added.

But faced with the specter of war in the Middle East, among other unpredictable external factors, the government must take steps to prevent efforts to turn the economy around from being disrupted, Yu stressed.

To that end, the Cabinet has formulated two one-year measures that are expected to push up GDP by 0.38 percent and bring the jobless rate down to 4.5 percent this year.

The latest official statistics show that the unemployment rate for last month was 5.03 percent, compared with 5.04 percent for December.

The premier said the slight improvement lent support for the two stimulus packages.

"Unemployed people who are aged between 45 and 64 have the most difficulty rejoining the work force," he said. "The job-creation measures are designed to provide temporary relief for this group lest they lose confidence and withdraw from the work force for good."

The legislature approved the public service program in the last session under which 80,000 jobless people aged between 35 and 65 may work for various government agencies for a monthly salary of NT$20,000.

The other program, comprised of 100 small public projects, has met with more resistance partly because the Cabinet wants to pay for it with bonds not subject to the debt ceiling and partly because opposition lawmakers suspect it will be used to trade political favors.

TSU Legislator Huang Chung-yung (黃宗源) said he failed to see how the Cabinet could create more job opportunities by earmarking NT$590 million for purchasing new police cars.

"Shouldn't the budget be included in regular fiscal spending?" Huang said. "Likewise, I don't understand how the Council for Cultural Affairs can help reduce unemployment by requesting NT$200 million for new books."

PFP Legislator Sun Ta-chien (孫大千) shared Huang's concerns, saying at least 24 planned public projects are irrelevant when it comes to boosting the economy.

A cross-party meeting later agreed to halt review of the budgets until the public construction bill is also passed.