The Executive Yuan today passed a motion to seek presidential approval for a reconsideration request regarding partial amendments to the fiscal planning law passed by the legislature earlier this month.
Amendments to the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法) that passed the third reading on Nov. 14 are difficult, if not impossible, to implement, the Cabinet said in a news briefing this morning.
The amendments would impair the central government’s ability to adjust subsidies to local governments, exceed the annual borrowing ceiling and hinder the smooth implementation of various central government policies, it said.
The Cabinet is to request the Legislative Yuan to reconsider the amendment bill after the motion is approved by the president in accordance with Article 3-2-2 of the Additional Articles of the Constitution (憲法增修條文), the Ministry of Finance said in a news release.
Calculations by the Directorate-General of Budget, Accounting and Statistics based on the third-reading text showed that central government subsidies to local governments must not fall below NT$545.5 billion (US$17.4 billion), the ministry said.
This would require an additional NT$264.6 billion to be borrowed in the next fiscal year, pushing the central government beyond its statutory debt ceiling, it said.
The revisions would also severely undermine the central government’s capacity to manage national finances, balance the economy and carry out key initiatives, eventually harming the public interest, it said.
The local government financial capacity tiers stipulated in Article 37-3 of the third-reading text are based on the version of the act prior to its amendment on Mar. 21, making it impossible to accurately reflect actual fiscal conditions in local governments and defeating the law’s original purpose of equalizing fiscal surpluses and shortfalls among local authorities, it said.
To ensure sustainable national development, public welfare and the goal of a “balanced Taiwan,” the Executive Yuan has already submitted its own draft amendments to the act for legislative review, it said.
The Cabinet’s version strikes a balance between central and local government needs by meeting basic local fiscal requirements while preserving sufficient fiscal resilience of the central government, it said.
The Cabinet’s version would achieve equitable adjustment of local finances, balanced regional development, improved quality of life, more reasonable vertical distribution of financial resources and authority, fairer horizontal allocation between urban and rural areas, stronger local autonomy and enhanced central-local partnership, it said.
The ministry expressed hope that the Legislative Yuan would review the bill and discuss the Executive Yuan’s draft.
