Min­istry of Fi­nance de­nies Miaoli ap­peal for help with debts

The China Post - - LOCAL - BY ENRU LIN

The Fi­nance Min­istry ( ) yes­ter­day de­nied the Miaoli County Gov­ern­ment’s ap­peal for help with a NT$ 64.8 bil­lion debt.

Miaoli County Mag­is­trate Hsu Yao-chang ( ) has ap­pealed to the Min­istry of Fi­nance for fi­nan­cial sup­port, say­ing his ad­min­is­tra­tion is in dire fi­nan­cial straits partly due to the cen­tral gov­ern­ment’s un­fair al­lo­ca­tion of tax rev­enues.

The public debt stands at ap­prox­i­mately NT$64.8 bil­lion and the county is be­hind on pay­ments to gov­ern­ment per­son­nel and project con­trac­tors, Hsu said.

At a public hear­ing at the Leg­isla­tive Yuan, the Fi­nance Min­istry turned down Hsu’s re­quest for a bailout and said lo­cal debts must be shoul­dered by lo­cal gov­ern­ments.

Fi­nance Min­istry Re­port

The Leg­isla­tive Yuan’s Ju­di­ciary and Or­ganic Laws and Statutes Com­mit­tee held a public hear­ing on the Bank­ruptcy Act ( ) yes­ter­day.

In a re­port re­leased at the public hear­ing, the Fi­nance Min­istry made it clear that it will not take steps to bail out the Miaoli County Gov­ern­ment.

Both the Bud­get Act ( ) and the Lo­cal Gov­ern­ment Act ( ) stip­u­late that lo­cal and cen­tral fi­nan­cial bod­ies are in­de­pen­dent and self-man­aged, the re­port stated.

The cen­tral gov­ern­ment has limited re­sources and can­not ab­sorb the Miaoli County Gov­ern­ment’s debt, the Fi­nance Min­istry said.

A county gov­ern­ment’s out­stand­ing short- term and longterm debts can­not ex­ceed 30 and 50 per­cent of an­nual ex­pen­di­tures, re­spec­tively, ac­cord­ing to the Public Debt Act ( ). In Miaoli County, the out­stand­ing short- and long-term term debts are reach­ing 70 per­cent of an­nual ex­pen­di­tures -- far in ex­cess of the legal limit.

Once a lo­cal ad­min­is­tra­tion’s debt hits 90 per­cent of an­nual ex­pen­di­tures, it must sub­mit a fis­cal im­prove­ment plan to the cen­tral gov­ern­ment, the re­port con­tin­ued.

At the public hear­ing, Demo­cratic Pro­gres­sive Party Leg­is­la­tor Wu Ping-jui ( ) said the Public Debt Act au­tho­rizes the cen­tral gov­ern­ment to re­strict lo­cal spend­ing when there is the like­li­hood of a fis­cal cri­sis.

Wu said Miaoli County’s debt can be cred­ited to long- term mis­man­age­ment by f ormer Mag­is­trate Liu Cheng-hung (

), who had been able to act unchecked by the cen­tral gov­ern­ment.

“Has the Fi­nance Min­istry not failed its re­spon­si­bil­ity?” Wu said to Fi­nance Min­is­ter Chang Sheng-ford ( ).

Chang replied that his min­istry is set to send a fis­cal re­struc­tur­ing team to Miaoli and will af­ter­ward pro­vide a com­pre­hen­sive re­port on the county’s fis­cal his­tory.

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