The nation’s debt and future government obligations have reached nearly NT$24 trillion (US$767 billion), which could impose a heavy financial burden on the government, the Taiwan Institute of Economic Research (TIER, 台灣經濟研究院) said yesterday.
The institute said public debt accumulated by the central and local governments stood at NT$5.25 trillion and NT$731.2 billion respectively at the end of last year, Ministry of Finance statistics showed.
The total debt — NT$5.99 trillion — was 37.2 percent of GDP last year, approaching the 40.6 percent ceiling imposed by the Public Debt Act (公共債務法), TIER president Jeff Lin (林建甫) told reporters.
That number compares favorably with other advanced economies, including Germany (with a government debt to GDP ratio of 78 percent in 2013), the US (101.53 percent) and Japan (230 percent).
More problematic, Lin said, are the government’s future obligations, which are not reflected in the government’s debt figures, such as pensions to be paid to civil servants, the labor insurance program and the cost of private land needed for public use.
The total of these obligations over the next 30 years would be an estimated NT$17 trillion to NT$18 trillion, which when added to the government debt totals nearly NT$24 trillion, or about 160 percent of the nation’s GDP.
Lin said the high debt level is not an issue the government can ignore and he appealed to officials to confront the problem.
The central government cannot afford to waste any time reviewing the pension system and other social welfare programs, such as the retirement schemes for veterans and civil servants, to put the programs and government finances on a sounder footing, Lin said.
An editorial published by the Chinese-language Apple Daily last week said that the pension program for retired civil servants is even more lucrative than the scheme in Greece and warned it could one day face bankruptcy.
Lin also urged local governments to rein in their borrowing to keep their debt from ballooning.
Saddled with debts of NT$64.8 billion, the Miaoli County Government has sought financial assistance from the central government after having difficulty paying NT$600 million a month on civil servants’ salaries and another NT$600 million a month in retired civil servants’ pension obligations.
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