For months, the government has been scratching its head to find ways to deliver on a two-year-old promise to implement a national pension plan. The problem has been one of funding, given the rising budget deficit and the political impossibility of raising taxes, especially just months before the presidential election.
But now it would appear that the 921 earthquake could help the government out of a tight spot.
Premier Vincent Siew (蕭萬長) told lawmakers yesterday that the government is weighing its policies to give priority to national reconstruction. This will, he said, entail the postponement of a decision on the national pension plan for another year -- beyond the March 2000 presidential election.
"The financial burden that disaster reconstruction requires is much heavier than expected," Siew said.
Liu Yu-lan (
The government is considering additional fund-raising plans, including inviting corporate funding and channeling income into reconstruction from the upcoming sale of nationally issued welfare lottery tickets.
Siew said the government can raise approximately NT$120 billion by issuing government bonds, readjusting the government budget, and drawing funds from the government's own reserves.
Though the Ministry of Finance is still calculating estimated reconstruction costs, some economists have estimated that the total cost of reconstruction will eventually amount to over NT$300 billion (US$9.5 billion).
In addition to plans to issue up to NT$80 billion worth of government bonds to meet financial needs, the government has decided to postpone or freeze the budgets for items that are now considered to be less urgent.
One of these is the national pension plan, which has its roots in the 1997 election campaign for city and county chiefs, when the KMT declared its intention to implement a national program that would give a pension to all citizens over the age of 65.
It was denounced at the time by the DPP as a ploy to sway voters that lacked serious substance. Nevertheless, the KMT-controlled central government pushed ahead with its plans, under heavy criticism from financial analysts who pointed out that it would be extremely difficult to fund such a program given Taiwan's relatively small income-tax base and increasingly graying population.
Numerous funding schemes were proposed, probably the most controversial of which was a national welfare lottery, which turned into a bitter legal battle between the central and Kaohsiung City governments over the right to issue lottery tickets.
The central government had been preparing to launch the lottery by the end of the year to finance the pension plan and various other welfare schemes -- including the National Health Insurance Plan, which has been operating at a deficit since its 1995 launch.
But the earthquake has led to a revision of priorities.
Yet while the government is obviously not blind to the political gains to be reaped from the massive spending associated with reconstruction, it clearly recognizes that it cannot shoulder the financial burden alone.
Siew said yesterday that the build-operate-transfer (BOT) format can also be introduced in reconstruction projects to solicit investment from the private sector, thereby reducing the government's financial burden.
The premier said that the government has tried to integrate relief donations from the private sector by setting up a donation management committee chaired by Straits Exchange Foundation Chairman Koo Chen-fu (
Currently, there are a total of 44 government donation accounts and 72 private ones. While the government accounts have received over NT$1 billion, the private accounts are estimated at over NT$10 billion.
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