The average per capita debt burden in the nation reached NT$977,000 (US$32,900) as of July, after both the central and local governments’ hidden debts were taken into account, Democratic Progressive Party (DPP) Legislator Chen Chi-mai (陳其邁) said yesterday.
According to the Executive Yuan’s proposal for the central government’s general budget for the next fiscal year, its outstanding debts are expected to reach NT$5.425 trillion by the end of next year, accounting for 38.7 percent of the nation’s average GDP in the preceding three years.
The Public Debt Act (公共債務法) stipulates that the debt ceiling for the central government is 40.6 percent of the average GDP for the past three years.
“Data indicate that the central and local governments accumulated approximately NT$15.5199 trillion in hidden debt as of July, which, if combined with the national debt and the governments’ outstanding debts with maturity of less than one year, adds up to NT$22.48 trillion, compared with the NT$21.4 trillion seen last year,” the legislator said.
That figure is equivalent to an average debt of nearly NT$977,000 per person, representing an increase of approximately NT$47,000 from the last fiscal year, Chen added.
The Cabinet’s budget proposal showed that the hidden debt — the sum of the central and local governments’ estimated future spending of NT$10.8415 trillion and NT$4.6784 trillion respectively — is made up primarily of labor insurance (NT$6.7 trillion), pensions for military personnel, civil servants and public school teachers under the old pension system (NT$5.7 trillion) and public service pension funds (NT$2.4 trillion).
Criticizing the Ministry of Finance’s debt reduction plans as a “blank check,” Chen said that the ministry last year stated in its debt reduction plan that the nation’s annual debt repayments must account for 7.5 percent of the government’s projected tax revenues for that year.
“Based on the ministry’s requirement, it should have allocated NT$95.3 billion to repay outstanding debts next year, but instead it has only allocated NT$64 billion, which accounts for just 5.03 percent of the government’s projected tax revenue for next year,” Chen said.
Fang Ching-feng (方清風), the director of the legislature’s Budget Center, raised similar concerns at a budget seminar yesterday over the central government’s outstanding debts, which he said have exceeded the debt limit imposed on it by 90 percent.
Feng said that the central government’s projected debt level for next year was NT$273.9 billion, higher than the NT$251.3 billion projected for this year, but it had yet to deliver a finance improvement proposal to the legislature, as required by an amendment made to the Public Debt Act on July 11.
Under the amendment, the central government will need to propose plans to improve its fiscal position when its outstanding debt exceeds 90 percent of the limit.
The amendment further stipulates that the debt the central government accumulates in any given year must not exceed the amount incurred the previous year without permission.