Addressing Challenges

Over the past three years of the COVID-19 pandemic, the Democratic Progressive Party, DPP government has issued triple stimulus vouchers, quintuple stimulus vouchers, and finally, a cash payment of 6,000 NT dollars under the pretext of economic revitalization. Behind these apparent blessings, there have been special budget allocation schemes, leading to a continuous increase in national debt.

The Tsai administration’s fiscal discipline has deteriorated. In six out of seven years in power, the DPP government levied more taxes than budgeted, resulting in a total surplus of 1.2499 trillion NT dollars. The government packaged this surplus as a sign of robust economic performance. In reality, this tax revenue surplus only signifies unbudgeted taxes that were not incorporated into governance planning. The Tsai administration's fiscal management has been inefficient, further complicated by the use of "special budgets" to evade scrutiny.

The "Forward-looking Infrastructure Development Program", with a budget of 840 billion NT dollars, was initially allocated without specific project plans, which blatantly violated budgeting principles. Similarly, the "Special COVID-19 Budget" of 840 billion NT dollars did not prevent Taiwan from facing shortages of vaccines, masks, and rapid testing kits.

Fiscal discipline has been compromised, and fiscal numbers are mismanaged.

Continuous overcollection of taxes indicates a failure in fiscal management. From 2014 to 2022, the central government excessively collected taxes, totaling 1.5465 trillion NT dollars, in which an astounding 1.3529 trillion NT dollars of that amount occurred during the Tsai administration alone.

Continuous over-collection of taxes implies inaccuracies in tax revenue predictions and fiscal mismanagement. Taxes that are not part of the budget signify inefficiency in the government's budgeting process and administrative incompetence. Overcollection represents a "phantom" tax revenue, adding an inexplicable financial strain on the public.

Special budget irregularities circumvent legislative oversight. During Late President Lee Teng-hui's tenure, only a special budget of 80 billion NT dollars over three years was allocated, following the 921 Earthquake. In comparison, Former President Chen Shui-bian allocated 780 billion NT dollars and Former President Ma Ying-jeou allocated 820 billion NT dollars over their eight-year tenure respectively. However, during President Tsai Ing-wen's eight-year term, the special budgets have exceeded 2.4 trillion NT dollars, avoiding scrutiny by the Legislative Yuan and surpassing the total sum of her predecessors in Taiwan's post-democratization era.

Solutions

Fiscal Discipline – No More Reckless Spending

Excess tax revenue should be used for debt repayment to maintain fiscal discipline, and Taiwan should refuse further debt.

The current Budget Act, Article 83(4), stipulates that "Major political event that takes place irregularly or once every few years" can be used as a condition for proposing special budgets to provide flexibility for policymaking. However, the vague definition of this condition may lead to abuse. Therefore, it should be removed.

Putting an end to the normalization of special budgets is crucial to prevent "cart-before-the-horse" budgeting practices. Strengthening the review and oversight mechanisms for special budgets is essential to ensure compliance with fiscal discipline and the public interest. Developing clear budget execution plans and regularly disclosing fiscal information will enhance fiscal transparency. It is also necessary to restrict the conditions for using special budgets explicitly, reserving them for wartime, significant crises, or major national economic emergencies. Any proposal for a special budget should require approval from the legislative body to avoid blank authorizations.

The formalization of the special budget procedures is essential to prevent obscure political appeals for "returning taxes to the people." This will help eliminate the ambiguity and ensure that finance and accounting units do not control tax revenue without adequate legislative oversight, thereby averting concerns about the deterioration of fiscal discipline.