President Ma Ying-jeou’s (馬英九) administration has ignored the severity of Taiwan’s worsening fiscal situation, while the discrepancy shown in the draft budget plan for next year poses major concerns for the administration’s fiscal outlook, academics said yesterday.
“Our suggestion is that not only are financial reforms necessary, but a new budget drafting process and method might be equally as important,” said Chen Jin-ji (陳錦稷), a researcher at the Taiwan Brain Trust think tank which organized a forum to examine next year’s budget.
The estimated budget deficit for next year is NT$214.4 billion (US$7.16 billion) — the largest since 2004 — and this is not solely attributable to the global financial crisis, but is the result of poor fiscal discipline, including thoughtless tax cuts, the squandering of public funds and the misallocation of resources, Chen said.
The government should face the reality of a difficult fiscal situation and try to generate concrete measures to resolve the problems, rather than making up numbers to deceive people, Chen said.
With Taiwan’s public debt reaching its ceiling of 40 percent of the average GNP of the previous three years, amending the Public Debt Act (公共債務法) and raising the debt ceiling could be an option to resolve short-term fiscal problems, said Su Chien-jung (蘇建榮), a professor at National Taipei University.
“However [the amendment] should go hand-in-hand with a more transparent report on the national fiscal status ... because there have been too many hidden debts that the government chose not to reveal in the past,” Su said.
In examination of the draft budget plan of the Executive Yuan, Su said that the discrepancy was intriguing.
“The estimated revenue from individual income tax increased by NT$50 billion when the economy was slowing. Is that possible? Revenue submitted by state-run companies’ decreased by NT$6.8 billion despite the raising of fuel and electricity prices this year. Does that make sense?” Su asked.