Ministry of Finance denies Miaoli appeal for help with debts
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.