Taiwan Would Need 62 Years to Clear NT$ 4 Trillion National Debt

Taiwan Would Need 62 Years to Clear NT$ 4 Trillion National Debt

Sources: All Taipei newspapers

July 29, 2010

The National Audit Office (NAO) under the Control Yuan yesterday released the 2009 Central Government Final Accounts of Revenues and Expenditures Report, stating that the government’s outstanding national debt reached a record high of NT$ 4.29 trillion. Even with no further increase in debt, taxpayers in the Republic of China would need 62 years to clear the NT$ 4 trillion national debt, the report estimated.

The difference between revenues and expenditures in 2009 was NT$ 161.1 billion because 2009 revenues dropped sharply. Expenditures surpassed revenues for the first time in the last three years. The NAO explained that the decline in revenues had been caused by the impact of the global financial tsunami and the tax reduction measures by the central government, with the fiscal surplus from previous years unable to make up for the drop in revenues.

The NAO pointed out that the governments at all levels had been short of funds for 11 consecutive years between 2000 and 2010. After the NAO submitted the report to the Control Yuan, its direct superior Constitutional organ, members of the Control Yuan questioned officials such as Lee Sush-der, Finance Minister, and Hwang Ding-fang, Director-General of the National Treasury Agency under the Finance Ministry. The Control Yuan members would not rule out the possibility of issuing corrective directives against the officials responsible for the fiscal imbalance.

In a review of the Finance Ministry, the NAO pointed out that the worsening fiscal situation resulted from the Finance Ministry’s various tax cut measures, leading to lower annual revenues and reduced burden of taxpayers, which had a significant impact on the national fiscal balance and might cause a controversy over whether the tax cut measures conformed to the principle of social justice. The NAO hoped that all the related agencies would begin to examine the untimely tax and levy cuts and would establish regular review mechanisms so that the long-term fiscal situation would not be affected due to the excessive or improper tax-cut policy.

According to the NAO report, the debts accumulated by the central government, excluding the 2009 debt, had increased from NT$ 2.64 trillion in the end of 2001 to NT$ 4.56 trillion in the end of 2009, a sharp rise of NT$ 1.41 trillion in national debt. The report also indicated that if the NT$ 240 billion in debt from last year was included, the total national debt would be as high as NT$ 4.29 trillion.

In response to the NAO report, Finance Minister Lee last night stated that he respected the NAO’s findings. However, he explained that since the implementation of the tax cuts had followed legal procedures, the Finance Ministry should not be the only one to be held accountable.

【Editor’s Note: The Republic of China is practically free of foreign debts.】

Attachment : none