Against the gloomy economic backdrop, and just days after finalizing plans to take out loans valued at NT$82.9 billion (US$2.5 billion) to provide consumer vouchers, the government is set to announce another measure aimed at boosting the economy — a NT$100 billion loan for each of the next four years to boost public construction.
The government is scheduled to request a special budget from lawmakers on Monday with a provisional meeting arranged for that day to finalize a special draft piece of legislation covering two projects.
“Because of the global economic situation, it is hard to see any economic rebound anytime soon. I will continue my efforts and I hope the legislature can push through the [approximate] NT$500 billion budget,” Premier Liu Chao-shiuan (劉兆玄) told reporters yesterday.
Liu made the remarks in response to President Ma Ying-jeou’s (馬英九) apology over the economic downturn during a TV interview broadcast on Thursday night.
Calling the schemes a “new economic stimulus plan,” the government said it expected to see an increase of 1.64 percent in next year’s GDP figures.
Since the government took office in late May, it has proposed a series of measures aimed at propping up the economy — a NT$235 billion program to stabilize commodity prices in May and a NT$58.3 billion budget to help local governments facilitate construction projects in June. In September, the Cabinet presented a NT$122.6 billion package of measures and incentives to promote exports, consumption, employment, real estate, public infrastructure, private investment, tax reform and care for the disadvantaged, that it said could drive NT$1 trillion in investment by the year’s end.
The annual budget earmarked for economic development in next year’s budget request statement, which was written in August and is pending legislative approval, stood at NT$265 billion, or 14.5 percent of the government’s total projected expenditure.
The government also implemented a NT$26.68 billion plan aimed at creating 200,000 job opportunities over four years and a more than NT$1.6 trillion bailout program for businesses.
It has now put forward the nearly NT$500 billion plan that it hopes will be funded by the special budget.
Funding the plan with a special budget will save the government from being subject to regulations on how it spends borrowed money and ceilings on government debt.
Article 23 of the Budget Law (預算法) requires the government use funds raised by loans in capital spending, while Article 4 of the Public Debt Act (公共債務法) caps the national debt at below 15 percent of the sum of the government’s annual budget and special budget.
The idea of incorporating the two loan programs into a special statute, however, was not well received by several KMT lawmakers, including Legislative Speaker Wang Jin-pyng (王金平).
“We know it’s difficult to ask for a special budget at the moment as the annual budget [for next year] is still under legislative review. Wu wouldn’t have done this if we were not in harsh economic times,” Liu told the KMT caucus at a specially arranged meeting designed to solicit support for the plan.
Under the plan, the government will accelerate the pace of public construction and urban regeneration, create incentives for private investment and boost industrial development, while continuing to take care of the disadvantaged, Liu said.
Earlier yesterday, Wang again suggested the Executive Yuan separate the NT$400 billion loan project from the NT$82.9 billion loan plan for consumer vouchers on concerns that they would arrive too late for the Lunar New Year.
“Everyone hopes to get the vouchers before Lunar New Year. [The NT$400 billion special budget request] will only make it more difficult for the voucher plan to pass,” Wang said.
KMT lawmakers remained divided on the issue after the meeting.
Democratic Progressive Party caucus whip William Lai (賴清德) said he would propose a bill offering each person NT$3,800 in cash instead of NT$3,600 in vouchers in the legislature on Monday. The caucus said it opposed the Cabinet’s packaging of the vouchers bill with other economic stimulus plans, insisting the vouchers bill be reviewed alone.
ADDITIONAL REPORTING BY RICH CHANG
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