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Jan 25, 2009

Growth forecast <1%

One line in particular caught my eye while browsing this Taipei Times article yesterday:

The Taiwan Institute for Economic Research (TIER, 台經院)
said government investment, which was estimated to rise 23.98 percent, would replace exports to sustain the minor economic growth....

Hong attributed the slow and modest recovery to the stimulus package that was expected to have an impact in the second half, if the government carried out various public works projects effectively.

Now I've complained before about both the way the KMT chocked the DPP's government for 8 years by denying it the life-blood (money) to make various important changes. I've also complained that I don't think the infastructure investment will help quite as much as the KMT expects it to, and considering the pace of construction here, will probably not be timely.

But an almost 25% increase? Wow! And infastructure spending is not the only priority; hiring a huge set of advisors is also back in style. Anyways, let's compare this budget to how things went down in the legislature over the last several years. No further comments. Just some quotes:

2008: The lawmakers approved a budget totaling NT$1.68 trillion for next year.

2007: While the Legislative Yuan is legally obliged to complete its review of the annual budget within a prescribed timeframe, the sixth legislature managed to delay the passage of the budget until the middle of June last year -- 197 days after the official deadline in late November 2006.

By the time the budget passed, it had been slashed by more than NT$34 billion (US$1 billion). In delaying its passage, lawmakers violated the Budget Act (預算法), which stipulates that requests must be completed in the legislature one month before the fiscal year starts and be promulgated by the president 15 days before that.

2006 flood control budget: KMT lawmakers blocked the budget for more than a year. In the end, however, the budget was passed in January 2006, in its third reading, after being boosted to NT$116 billion.

2006 general budget: The budget of the Mainland Affairs Council was cut by NT$100 million, and NT$280,000 meant for Government Information Office (GIO) Minister Pasuya Yao's (姚文智) salary was trimmed.

The legislature also slashed NT$40.2 billion from the second financial reform plan and voted in favor of conditionally lifting the ban on US beef imports.

Altogether, the legislature yesterday slashed NT$36.5 billion from the government budget and froze NT$246 billion. The cut is the largest in a decade.


Carlos said...

Hey man, just wanted to say thanks for all the information you keep feeding us, and happy niú year!

阿牛 said...

Thanks Carlos!