The Ministry of Finance is mulling the creation of a financing and investment platform to consolidate national resources and channel idle funds to public works projects, Deputy Minister of Finance Chang Sheng-ford (張盛和) said yesterday.
Chang said that although the state coffers have seen shrinking tax revenues while debts have escalated in line with the nation’s economic performance, there were still plenty of idle funds.
The ministry has said it is unlikely to meet its fiscal goal this year, as the economy is expected to contract 2.97 percent.
In the past, the government made up the deficit with bonds or surplus tax revenues from previous years.
The nation’s treasury is dwindling, with debts hitting 33.7 percent of GDP, Chang told a news conference.
“Yet huge national funds and assets are not being utilized,” he said.
STATE ASSETS
To address the issue, the deputy minister said his agency was seeking to learn from Japan or Singapore to set up a financing and investment institution, in the form of a fund or a bank, to better manage government assets.
The institution, whose formation would require legislative approval and oversight, would draw its funding from existing funds, government debts or other resources, Chang said, adding that the idea was still being studied.
The Japanese financing and investment fund was created in 1951 on government bonds to help raise money for public construction programs and underwrite loans for small and medium enterprises, the ministry said.
The global investment company in Singapore has a capitalization of more than US$100 billion devoted to managing the city state’s foreign exchange reserves, the ministry said.
12 PROJECTS
Chang said the ministry was seeking to raise NT$4 trillion (US$114 billion) to finance the “i-Taiwan 12 Projects” over the next eight years.
The program, intended to strengthen the nation’s infrastructure, is expected to play a key role in boosting GDP to 6 percent during the period.
The proposed institution could help raise money for construction, Chang said, adding that self-financing government funds would be prioritized.
In return, the institution would pay interest, the deputy minister said, adding that it would differ from bonds in that the latter could not be used for investment.
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