Economy

Government to unveil new fiscal policy guidelines

The Government will make better use of state-owned land, like Taitung County's Chulu Range in this file photo, as a way to increase revenue. (CNA)

• Publication Date：09/07/2009
• Source： Economic Daily News

The Executive Yuan will unveil Sept. 7 a new set of fiscal policy guidelines outlining how the government intends to increase revenues and limit expenditures during the next eight years from 2009 to 2016.

If all goes according to plan, the nation’s coffers should be able to save anywhere from between NT$600 billion (US$18 billion) and NT$1 trillion over the eight-year period.

The government must change its old notions of having a balanced budget, said Lee Sush-der, minister of finance. Not only should the government cut back on wasteful spending; it should also actively seek out new sources of income, and even try to make money, he said.

In terms of increasing revenues, the government has two main strategies: it will strengthen its management of state-owned assets, and make better use of state-owned land. It will consider selling and leasing state-owned land, appointing management companies to oversee its use, improving its functions, and so on. The government has set a goal of increasing revenues by NT$31.7 billion next year as a result of its new land policies, Lee said.

In terms of reining in spending, the Ministry of Finance under the Executive Yuan has devised a formula as follows: in the next four years the annual sum total of increase in revenue and the decrease in discretionary spending shall be no less than 2 percent of the 2009 fiscal year budget.

The budget for 2009 was NT$1.8 trillion, 2 percent of which is equal to NT$36.2 billion. This means that the sum total of increase in revenue and decrease in discretionary spending for each of the next four years should be no less than NT$36.2 billion.

The government will also try to strengthen its financial management policies in four particular areas: raising the government’s financial efficiency, guiding local governments in their financial management, strengthening the management of public debt, and enhancing control over public works expenditures.

In terms of taxation, the government will follow three broad strategies: implementing tax reforms, initiating custom duties reforms and reformulating the taxation information system.

The central government will also encourage local governments to increase their own sources of income, Lee said. Within four years, local governments should have increased their own income by 15 percent over that of 2009, he added. (HZW)