A major task of the legislative session that concluded on Tuesday was to review and approve the national budget for this fiscal year, but legislators ended the session a day early to focus on their election campaigns.
Except for holding one last meeting on Tuesday to pass the Anti-infiltration Act (反滲透法), lawmakers bolted to cover party and personal interests, leaving behind the government’s general budget — NT$2.102 trillion (US$69.82 billion), which had only been through a preliminary committee review — as well as a completely untouched subordinate unit budget of more than NT$4 trillion.
By law, the general budget for the last fiscal year should have passed the legislature by December 2018, but it was not passed until Jan. 10 last year, while the budgets for subsidiary agencies and nonprofit subsidiary agencies were delayed until November last year, when they passed a third reading, completing the review procedure.
In other words, the NT$4 trillion subordinate unit budget was perfunctorily examined at a time when almost all of the money had been spent.
Many people are unaware of this, but an examination of the review periods for the subordinate unit budget over the years shows that such procrastination has become deeply rooted in the legislature, no matter which party has the majority.
The operating subsidiary agencies for the last fiscal year were the 15 state-owned enterprises — including CPC Corp, Taiwan (CPC), Taiwan Power Co, Taiwan Sugar Corp and the Taiwan Railways Administration (TRA) — which were budgeted NT$2.54 trillion in operating expenditure for the year.
However, the funding was used before the budget was passed by the legislature, causing the enterprises to operate with low efficiency and drawing public criticism.
When scandals and cases of embezzlement broke — for example, the TRA’s Puyuma train procurement scandal and CPC’s oil leaks — state-owned enterprises seldom adopted improvement measures.
Together, the operating and the nonprofit subsidiary agency budgets covered 117 units in the last fiscal year. While the operating subsidiary agencies are the state-owned enterprises, the nonprofit subsidiary agencies include the National Development Fund, the Construction Fund, the National Health Insurance system, the pension program and the Operations Fund.
In the last fiscal year, the nonprofit subsidiary agencies were budgeted NT$1.713 trillion in expenditure. Similarly, the funding was used at the beginning of last year before the budget passed a legislative review in November.
More planning should have gone into the subordinate unit budget so that the more than NT$4 trillion could have been better utilized, thus saving a substantial amount of money from being wasted.
The budget for the nonprofit subsidiary agencies includes endowment funds for 49 national universities, which amounts to hundreds of billions of New Taiwan dollars. As in other years, the government subsidized public universities by NT$55 billion, but the review was postponed and the money was spent before a review was completed.
Making matters worse, Article 7 of the National University Endowment Fund Establishment Act (國立大學校院校務基金設置條例) stipulates that full-time auditing personnel are subordinate to the university president, allowing the president to spend money before auditing personnel are in place so that time can pass without having a supervising mechanism.
Spending taxpayers’ money without supervision runs contrary to the principle of fairness and justice. To distribute higher-education resources effectively among all faculties and students, the two major political parties should speed up the annual review of the university endowment budget.
Legislators should immediately amend the law, restoring the practice of university affairs boards appointing auditing units that supervise the fund management committees, with the university president serving as committee convener. This move would reform higher education and boost economic development.
Legislators need to scrutinize the Construction Fund, focusing on the Central Urban Regeneration Fund, with its renewal projects and the reconstruction of older, unsafe buildings.
Nationwide, 4.23 million households live in apartments that are more than 30 years old. Accelerating reconstruction and building safer housing not only improves people’s quality of life, but also creates economic opportunities for the construction sector.
When the US Congress fails to review the national budget, the government is shut down. In Taiwan, Article 54 of the Budget Act (預算法) allows the government to continue disbursements past its review deadline by following authorized budget plans or keeping a number of budgets used in the previous fiscal year.
Voting wisely is the way to resolve the procrastination that has hold of the Legislative Yuan, allowing the Chinese Nationalist Party (KMT) and the Democratic Progressive Party to spend taxpayers’ money unsupervised.
Legislators who have the vision and willingness to perform their duties should receive the most votes and the public should urge them to include a time limit in the Budget Act for reviewing the budget for subsidiary agencies.
Without this amendment, a budget of more than NT$4 trillion tax dollars can be spent each year without proper supervision.
Lin Hui-lin is a professor emeritus and Lee Hsien-feng is an adjunct associate professor at National Taiwan University’s department of economics.
Translated by Chang Ho-ming
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