Meanwhile, the debt incurred by Taiwan's government is over NT$21 trillion, according to the Alliance for Fair Tax Reform (公平稅改聯盟) as may be inferred from
this report by Amy Su in the Taipei Times today. The Ministry Of Finance's calculation made available to the public puts that figure at NT$4.85 trillion - however, the Alliance argues that the ministry's figure should include something called "potential debt" (which I guess means unfunded spending commitments) as well as "non-enterprise funds" which Amy Su describes as
"...used by the government to support infrastructure projects and social welfare programs."
Apparently, those two sources of debt add up to NT$15.71 trillion and NT$579.5 billion respectively, which, together with the NT$4.85 trillion, adds up to over NT$21 trillion or NT$919,000 (US$31,365) per person. That is enormous. To get a sense of perspective, let's look at the budget figures for 2011 (available as an excel download from the Central Directorate's
website), total annual expenditure is given as almost NT$1.79 trillion with a budget deficit of NT$159 billion. The four largest items in that expenditure are given as "Education, Science & Culture" at just over NT$357 billion; Social Welfare at almost NT$347 billion; National Defense at just over NT$287 billion; and "Expenditures for Economic Development" at almost NT$226 billion. Even were the government to completely eliminate spending on each of those items (NT$1,217 trillion) it would take just over 17 years to pay off the national debt. In a far less ambitious alternative, the government would need to run a budget
surplus of NT$159 billion every year for
132 years in order to pay off the national debt, which is insane. In researching her report, Amy Su called a certain prof, Thomas Lee (李桐豪), at National Chengchi University to whom the obvious conclusion appears to be:
"The ministry should come up with more measures to collect money for the country...”
I doubt that such measures as a tax on overseas Taiwanese could ever bring in more than a few tens of billion a year -
therefore, if the people of Taiwan are to significantly reduce their exposure to financial risk and the implications of that for the overall economy over the long term, then the inescapable conclusion is that the government in Taipei must begin cutting "public spending" seriously, aiming for substantial surpluses in the hundreds of billions of NT$ every year for the next half century or so.
Shockingly an issue that doesn't get enough play in Taiwan, China or Japan. I know city and county debt is a problem that has gone largely unnoticed. You also have a very large percentage of the workforce working for state-run NGO's.(oxymoron)
ReplyDeleteI honestly don't expect this to get dealt with till it falls apart. As it is now most people don't realize where most govt revenues come from. They are VAT, import/export duties, income tax, and traffic tickets.
These are the same people that think you can run a highly industrialized/mechanized society on wind and solar power and just decommission nuclear power plants on a whim. I'm not expecting them to pick up "Atlas Shrugged" in Chinese any time soon.
"They are VAT, import/export duties, income tax, and traffic tickets."
ReplyDeletePlus the State monopolies.
"I'm not expecting them to pick up "Atlas Shrugged" in Chinese any time soon."
I haven't even read Atlas Shrugged.
Since I started my blog, my entire attitude has been framed by the consideration that it is the Left in Taiwanese politics (the pan-green camp) that must be challenged and criticized because they are the most obviously "westernized" and as such, their failures will likely be more damaging to the Liberal* cause than those of the pan-blues. Also, the pan-blues are too steeped in Chinese cultural proclivities to have much sympathy for Liberal criticism.
*I use the term "Liberal" with a capital "L" with the original sense of the term in mind - I can't stand it when U.S. conservatives cede this word to the commies.