Thu, Nov 27, 2003 page1

• KMT announces plan to outspend its rival

  STIMULUS PACKAGE The party released a plan for public construction four times as costly as a similar plan by the Cabinet, but argues it won't burden future generations

  • By Ko Shu-ling / STAFF REPORTER
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  Countering the Cabinet's five-year, NT$500 billion public construction package, the Chinese Nationalist Party (KMT) announced a four-year, NT$2 trillion spending plan yesterday, boasting that the government would not need to borrow money to fund the project.

  While the KMT criticized the Cabinet's plan to borrow money for its project, former premier and KMT Vice Chairman Vincent Siew (蕭萬長) unexpectedly threw his backing behind the Cabinet's plan.

  During the KMT's weekly Central Standing Committee meeting, Deputy Legislative Speaker and KMT Vice Chairman Chiang Pin-kung (江丙坤) proposed the four-year public construction project, which was estimated to cost just over NT$2 trillion, or NT$520 billion a year.

  "The main problems with government finances have a lot to do with the lack of government investment in public construction," Chiang said. "The plan is aimed at boosting the roughly NT$400 billion the Democratic Progressive Party (DPP) government spends annually on public construction projects to NT$520 billion each year."

  By increasing the government's annual spending, Chiang said, the government would not need to earmark a special budget to fund the project.

  The Cabinet officially approved the NT$500 billion plan yesterday and decided to borrow NT$400 billion in a special budget to exempt it from limits on the amount the government can borrow, while raising NT$100 billion by selling stakes in state-owned enterprises.

  The government also hopes to raise NT$203 billion from the private sector and NT$131.6 billion from local governments that, combined with other sources, would make the project worth more than NT$948 billion.

  Endorsing Chiang's proposal, KMT Chairman Lien Chan (連戰) criticized the timing of the Cabinet's plan.

  "The DPP government shouldn't have waited until four months before the presidential election to propose the spending plan if it had known the importance of increasing government spending on public construction," Lien said.

  "The ultimate goal [of the KMT's plan] is to make the nation a free-trade port zone, an operations center, a research and development hub and a leisure and tourism paradise in the Asia-Pacific region," Lien said.

  Despite Lien's and other colleagues' criticisms of the Cabinet's proposal, Siew defended the Cabinet's plan.

  "I don't think funding government construction projects with a special budget amounts to leaving debts to our children," he said.

  "Instead, I think it increases the competitive edge of the next generation. I support any well-thought-out plan with a comprehensive evaluation of its effectiveness once it's fully carried out, and I'm calling on you to throw your weight behind such a plan," Siew said.

  Vice Premier Lin Hsin-i (林信義) said the Cabinet is requesting a special budget for the project to expedite the plan.

  "The spending is needed now and I'm afraid if we don't do it now, we'll regret it in the future," he said.

  Minister of Finance Lin Chuan (林全) said that borrowing money to fund the project will not crowd out other government projects, as had been suggested by the opposition alliance.

  "They should have asked themselves this: Why would other plans be crowded out if we had more money at our disposal?" he said.

  Lin also assured the public that the government will not raise taxes if it fails to raise sufficient funds by selling stakes in state-owned enterprises.

  "I don't think we should have any problem raising NT$100 billion in five years, or NT$20 billion a year," Lin said. "Take this year, for example. We've sold over NT$100 billion worth of stakes in state-owned enterprises."
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