A pan-blue legislative majority is sure to cloud the Chen Shui-bian (陳水扁) administration's prospects of pushing forward its proposed economic and financial bills in the legislature, forcing the government to adopt practical strategies to overhaul its economic and financial policies, pundits said yesterday.
"The challenge facing the ruling Democratic Progressive Party [DPP] will be to urgently fine-tune its economic and financial policies so that the opposition alliance will give them the go-ahead in the newly elected legislature," said Steve Lin (
Among the DPP government's proposed economic and financial proposals, Chen has prioritized the financial restructuring fund (金融重建基金) bill, the Land Tax Law (土地稅法) and revisions to both the Real Estate Securitization Statute (不動產證券化條例) and the Securities Transaction Law (證券交易法) to be four of his top-10 most-important bills, all of which are stalled in the KMT-led legislature.
Since the ruling and opposition parties had previously reached a consensus to maintain the financial bill's size at NT$320 billion, it may be soon be passed, although the DPP was hoping to expand its size.
"A DPP legislative majority would have increased the room for the Cabinet to expand the fund's size from the current NT$320 to some NT$680 -- a figure on which it had previously insisted," DPP Legislator-at-large Lin Chung-cheng (
Lin said that he sees no reason for the Chinese Nationalist Party (KMT)-led legislature to continue to put these DPP-proposed economic and financial bills on the back burner since disagreements have mostly been ironed out.
After the land tax law's passage, the land value incremental tax will be permanently cut by 20 percent, reducing the top rate from the current 60 percent to 40 percent.
He therefore yesterday urged the newly elected KMT-led legislature to accelerate the bills' passage, which will greatly improve the local financial market's internationalization, as well as the nation's future economic prospects.
But Hsu Chen-min (
Although the likelihood is slim, Hsu said that Chen will face great pressure from the KMT-PFP alliance, which has, before the election, demanded to reshuffle the Cabinet and to nominate Chiang Pin-kun (
Although both Hsu and Lin agreed that Chiang will be a better candidate for the premiership, given his past credential and familiarity with the nation's economic affairs, they both believe Chen will never relinquish his right to nominate a pro-DPP Cabinet.
"Political instability is sure to linger on," both Hsu and Lin said.
Hsu expressed concern that such political instability will be detrimental to the nation's future economic outlook.
The government has forecast economic growth of 4.56 percent next year, down from 5.93 percent for this year.
But Lin said the opposition alliance could do a better job to facilitate an economic blueprint for the nation's development.
"At least, the nation's deficit won't grow so badly under the KMT-PFP alliance's supervision," Lin said, adding the deficit has quickly shot up from NT$2 trillion to an estimated NT$4 trillion in the past four years under the DPP's rule.