While the Executive Yuan and local governments are still trading fire over cuts to local subsidies, Chinese Nationalist Party (KMT) lawmakers, who command a slim majority in the legislature, on Tuesday passed a bill raising military allowances, fueling a new wave of contention over budget allocations.
The opposition-controlled Legislative Yuan in January slashed the central government’s proposed budget by NT$207.5 billion (US$6.996 billion), or a record 6.6 percent of the total. That was far larger than the 1.1 percent to 1.3 percent annual cuts over the past decade. On top of the NT$143.9 billion cuts for specific expenditure items in the central government’s budget, the Executive Yuan was left with NT$63.6 billion and had to choose which budget items to remove.
To avoid more cuts that would seriously impact spending for national defense, diplomacy and education or reduce interest payments for debts that would result in breaches of contracts and loss of international trust, the Cabinet on May 22 announced that it would cut subsidies to local governments by 25 percent. Several KMT-ruled local governments responded by filing administrative appeals, but the Cabinet said it had no choice and that it was the only way it could follow the opposition’s mandate to cut its budget.
According to Article 69 of the Local Government Act (地方制度法) and Article 30 of the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法), the central government must provide subsidies to local governments and has the legal authority to decide the amount of subsidies.
Although general subsidies would be reduced, most cities and counties would still see an increase in their over-all subsidies from last year, including the four KMT-governed special municipalities: Funding would increase by NT$8.2 billion for Taipei, NT$6.8 billion for New Taipei City, NT$4.6 billion for Taichung and NT$5.3 billion for Taoyuan.
The subsidy reductions should come as no surprise after opposition lawmakers slashed the central government’s budget and their arbitrary action would most likely backfire. However, to add salt to wound, opposition legislators have proposed a slew of bills that could worsen the nation’s financial situation and cause more political unrest. The KMT has proposed a cash handout of NT$10,000 to each taxpayer, which is estimated to cost NT$230 billion. On Tuesday, it passed a bill increasing volunteer soldiers’ allowances to NT$30,000, which would cost about NT$30 billion. That is ironic, given that the opposition had cut the defense budget by NT$8.4 billion, which could hinder President William Lai’s (賴清德) policy starting in April to raise the monthly salaries of military soldiers.
The budget proposals are obviously moves to win over the public amid a massive campaign to recall KMT lawmakers. However, they would not only crowd out budgets for public welfare, but also trigger more political controversy amid disputes over the constitutionality of the proposals. The Budget Act (預算法) and the Fiscal Discipline Act (財政紀律法) state that legislators are not to propose increases to the expenditures in the Executive Yuan’s budget bill and should not infringe on the power of the administration to allocate budgets.
The opposition lawmakers’ controversial legislations have sparked a nationwide recall campaign. More reckless manipulations of the national budget would only add fuel to the public discontent, and spur many more to seek a change to the state of the legislature.
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