As of the end of last year, the central and local governments amassed more than NT$6 trillion (US$184 billion) in national debt, which will take the nation nearly 88 years to pay off, according to a Control Yuan report.
The report was compiled by an ad hoc group that spent a year investigating the government’s finances.
It was approved on Wednesday by the Committee on Financial and Economic Affairs of the Control Yuan, the nation’s highest watchdog organization, demanding that the Executive Yuan tackle the nation’s financial problems head-on and reflect on its errors.
According to the report, as of the end of last year, the central and local governments accumulated a total debt of NT$6.022 trillion, of which NT$5.2769 trillion was amassed by the former.
If not taking into account future debt increases and interest, and given that, based on past figures recorded between 2001 and last year, the central government will allocate about NT$60 billion to pay its debt, it would take the nation about 88 years to get out of debt, the report said.
The number of years required to pay off the debt is calculated excluding an estimated NT$17.74 trillion in hidden debt, the report added.
The report expressed concern that the nation could follow in the footsteps of some European countries, saying that if hidden debt is factored in, the per capita debt burden in Taiwan could reach NT$75,500, nearly three times the NT$23,200 debt per person estimated by the Ministry of Finance.
Also, gradual increases in the amount of expenses the government is obligated to pay, which accounted for 70 percent of the government’s total spending in 2014, have led to the nation’s financial straits, the report said.
In addition, as the government’s special budgets are exempted from regulations under the Budget Act (預算法) and the debt limit imposed by the Public Debt Act (公共債務法), the report found that nearly 96 percent of expenditures from special budgets between 2006 and last year were paid using borrowed money.
“Such practices have caused poor fiscal discipline, piling-up of national debt and generational inequality,” the report said.
The report also raised concerns about the government’s relatively low ratio of tax revenue to GDP, which it said have limited the nation’s sources of steady revenue.
The ad hoc group consisted of Control Yuan members Lee Yueh-der (李月德), Yang Mei-ling (楊美鈴), Kao Feng-hsien (高鳳仙), Chang Jen-hsiang (章仁香) and Chen Ching-tsai (陳慶財).
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