The crisis-struck Miaoli County Government is unable to pay its staff, resulting in the Executive Yuan effectively taking over the county’s finances. This problem is not unique to Miaoli. Yunlin County is also under fiscal pressure and might face a deficit of NT$1 billion (US$31.9 million) in October. If the central government does not find ways to control the situation, this could well be the first in a series of similar events.
That local governments find themselves in difficult fiscal situations is nothing new. Data from the National Treasury Administration show that both Miaoli and Yilan counties have exceeded their debt ceilings. Yunlin, Nantou, Chiayi, Pingtung, Hsinchu and Hualien counties, along with Hsinchu City, are also in dire financial straits, as their debts exceed 40 percent of their respective budgets.
More than half of all counties and municipalities are in financial difficulty. Industry is not sufficiently developed, tax revenue is too low and expenditure continues to rise. Personnel costs for civil servants and public school teachers alone make up over half of county government expenditure. Furthermore, some county commissioners lack fiscal discipline.
Former Miaoli County commissioner Liu Cheng-hung (劉政鴻) is a case in point. He clearly knew the county’s treasury was running low, but he was fond of grandiose projects and used the funds of various government foundations to organize fireworks displays and international concerts and to construct buildings that are underused. As a result, his successor is complaining that the county government cannot pay staff salaries.
Despite Liu’s absurd record, the county council passed the government budget almost untouched year after year, while Liu was given a five-star rating in media polls. He was the role model for Chinese Nationalist Party (KMT) local rule, and was praised by the Cabinet on several occasions. Miaoli County Commissioner Hsu Yao-chang (徐耀昌) used to be a KMT legislator representing the county, but he never questioned local-government finances. In other words, while many people might have found the situation odd, everyone played along and in the end the bottom fell out. This is a structural problem, and while it is necessary to pursue Liu’s possible legal liabilities, he is not the only one under suspicion of wrongdoing.
Liu may be a negative example, but in the final analysis, he has contributed to Taiwan: His failure has made the central and local governments pay attention to fiscal controls, perhaps helping to put an end to the deteriorating fiscal situation at central and local government level.
The economic outlook for the next six months is looking worse than last year. House prices may fall, which means local government fiscal income from a variety of property-related taxes would also fall. If local governments want to develop land to increase revenue, low land prices and difficulties in selling would cause their finances to deteriorate further.
If the government fails to initiate pension reform due to election concerns, and perhaps even increases salaries for military personnel, civil servants and public school teachers in an attempt to win votes, this will only add to the fiscal burden of the central and local governments. If that happens, the next president will accuse President Ma Ying-jeou’s (馬英九) administration of destroying government finances and emptying the national treasury.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
RSS