Premier Wu Den-yih (吳敦義) yesterday defended a plan to increase salaries for government employees, teachers and military personnel from July 1, saying he could not withhold the proposal under the pretext that it would alleviate the national debt and deficit.
“The national debt of NT$4.6 trillion [US$158.76 billion] is a problem that has accumulated over the past 50 to 60 years,” he said. “If the pay raise proposal has to wait until the government deficit is resolved, it could take several decades.”
The national debt clock showed an average debt burden of NT$210,804 per person.
Photo: Liao Chen-huei, Taipei Times
The amount represented about 34 percent of the nation’s GDP, which stood at NT$13.43 trillion last year.
When the central government’s hidden liabilities, mainly debt incurred to cover deficits in pension programs and non-profit government funds, and local government debt were added, the national debt was estimated at more than NT$15 trillion, the legislature’s Budget Center said in a report last August.
At yesterday’s Cabinet meeting, where the guidelines for drafting the budget for fiscal year 2011 were discussed, Wu instructed Cabinet members to keep in mind that the nation would be in financial difficulties next year.
Approached by reporters after the meeting, Wu said the pay raise issue needed to be moved up the public agenda despite budget constraints.
“Doubtless, the country is in fiscal trouble. That’s why I had to ask my Cabinet to realize the difficulty so they can draft their budget in the spirit of zero-based budgeting [to avoid unnecessary spending]. As a premier, could I tell them that you might just as well pad your budgets because the fiscal situation remains slack?” Wu said.
If the plan to offer a 3 percent pay raise for about between 800,000 and 900,000 government employees is approved, as it is expected to be next week, the government would have to earmark an additional NT$22 billion per year.
The premier promised not to take out new loans to cover the expenses, but to fund the program from three revenue sources.
“First, there will be a significant increase in surplus from state-owned enterprises and state-owned shares, as well as tax revenues in the wake of the economic boom … We will also [sell] idle military camps,” Wu said.
Government agencies have been working on calculating the exact revenue from the source before a detailed plan is presented to President Ma Ying-jeou (馬英九) for final approval next week, he said.
Meanwhile, Democratic Progressive Party (DPP) lawmakers continued to oppose plans for the pay raise, saying the money should instead be used for welfare subsidies and tax relief for lower-income families.
DPP lawmakers unveiled a plan to spend as much as NT$10 billion to increase minimum salary tax deductions by NT$56,000, a move they said would provide “immediate benefits” for most wage earners.
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