President Chen Shui-bian (陳水扁) yesterday called on the opposition parties to support the government's proposal to push forward a bill that would allow the government to expand the limits of public debt in order to promote public construction projects and reduce unemployment.
"Compared with the United States, Germany, Japan and Singapore, [Taiwan's] government still has room for public debt," Chen said, "The government's move is to expand public construction projects and to reduce unemployment."
In the weekly "A-Bian e-paper" issued yesterday, Chen noted the government is making all efforts to expand domestic demand and to increase employment in a move that he described as "hatching gold eggs for gold hens."
He took the example of building a mass rapid transit system from Taipei to Chiang Kai-shek airport to explain the urgency of expanding public works.
He said the cost of constructing the airport MRT system was estimated at around NT$70 billion. If that money was deposited in the bank, he said, the government would receive less than 1.5 percent interest. After adjusting for inflation, the interest would be almost zero.
The money would be better spent on an MRT system, Chen said.
"If the government uses the money to build the MRT, it will create hundreds of thousands of jobs and more than 1 million commuters will be able to enjoy the convenient service. It will also bring prosperity and development to the area along the line," he said.
The Ministry of Finance warned this week that, because of the slowing down of the country's economy, as well as the increasing unemployment rate, the government could face a shortfall of around NT$60 billion in tax revenues this year. It based its prediction on the tax revenues in the first four months of the year.
"But if the outbreak of SARS cannot be brought under control soon, the nation could face a tax-revenue shortfall of up to NT$100 billion, Minister of Finance Lin Chuan (林全) told lawmakers at the Legislative Yuan.
The president therefore made his appeal to the public and the opposition parties yesterday while the government claimed that the outbreak of SARS is being gradually brought under control.
Chen said Taiwan currently has loanable funds totaling NT$2.2 trillion sitting quietly at banks and generating interest, but Taiwan's government debt is only 33.3 percent of GDP, far lower than Japan's 142.7 percent, Singapore's 100.7 percent, Germany's 62.4 percent and the US' 60.7 percent.
Taiwan therefore still has room for floating debt for aggressive investment in public construction, which would not only create large numbers of jobs but also improve the quality of living significantly, Chen said.