The Executive Yuan would file for a constitutional interpretation regarding the amendments to the Act Governing the Allocation of Government Revenues and Expenditure (財政收支劃分法) the Legislative Yuan passed on Friday, Premier Cho Jung-tai (卓榮泰) said.
The amendments would undermine the government’s stability and be detrimental to its fiscal discipline, he wrote on Facebook on Friday evening.
In response to this year’s central government budget being cut, and being required to adjust and reduce NT$63.6 billion (US$2.04 billion), the Executive Yuan decided to cut general subsidies to local governments by 25 percent.
Photo: Taipei Times
The move incurred the ire of the opposition parties, who pushed the Chinese Nationalist Party’s (KMT) version of proposed amendments to the act 59 votes to 50.
The amendments stipulate that general subsidies from the central government to local governments should not be less than those of the previous fiscal year.
The amendments also stipulate that central government subsidies to local governments for projects should not be less than the average amount given to projects in administrative regions in the same income bracket over the past decade.
KMT caucus whip Fu Kun-chi (傅?萁) said the amendments were intended to correct mistakes and ensure that local governments receive their dues.
Taiwan People’s Party Legislator Vivian Huang (黃珊珊) said the cut to the budget should have been deducted from ministries, but the Cabinet instead deducted the sum from local government subsidies.
The Executive Yuan said it intended to propose a counter-amendment, but it has not yet been introduced, she added.
An Executive Yuan official yesterday on condition of anonymity said that the centrally funded tax revenues distributed to local governments for fiscal 2026 have already reached NT$416.5 billion, raising a debt of NT$299.2 billion.
If the government observes amendments passed on Friday and maintains the same level of subsidies, which stood at NT$545.5 billion this year, the government would have to raise NT$264.6 billion in debt, placing total government debt in fiscal 2026 at NT$563.8 billion, or 17.1 percent of annual government expenditure, they said.
Such an amount exceeds the legally mandated ceiling per the Public Debt Act (公共債務法) and undermines the government’s fiscal discipline, they added.
The Executive Yuan would introduce its own proposed version of amendments to the budget act as soon as Thursday, they said.
Democratic Progressive Party caucus secretary-general Chen Pei-yu (陳培瑜) yesterday said the Executive Yuan should first come up with its own amendments to see if the opposition parties were open to discussion.
Were such attempts to fall through, “it is possible the president not to promulgate the amendments [passed on Friday], or the premier not to cosign the amendment,” she said.
Chen also urged member of the public to contact Legislative Speaker Han Kuo-yu (韓國瑜) and demand him not proceed the amendments.
Additional reporting by Lee Wen-hsin
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