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Commercial Times: Support an expansionary fiscal policy

Commercial Times: Support an expansionary fiscal policy

Finance Minister Chang Sheng-ford (???) recently said that because the tax revenue outlook is good this year, the Cabinet should adopt an expansionary fiscal policy next year to stimulate economic growth. We support Chang's opinion. The investment by our government has seen negative growth for six consecutive years, with the scale of government investment dropping from more than NT$500 billion (US$16.21 billion) in the 1990s to NT$400 billion at present. Last year, for example, major construction projects proposed by various agencies totaled NT$229 billion, but the Directorate General of Budget, Accounting and Statistics was only able to earmark NT$163.6 billion. Public construction as a percentage of domestic investment has fallen from 15-20 percent in the 1990s to 10 percent now. There are many reasons behind Taiwan's sluggish economy, and the decrease in the public construction budget is definitely an important reason. Expanding public construction is a top priority, no matter whether it is intended as a short-term stimulus or a long-term measure to improve the investment environment. In implementing an expansionary fiscal policy, there are several points to which the government needs to pay attention: First, the government should not borrow too heavily or it will worsen its financial crisis. Second, the government should raise the self-liquidation ratio of public construction projects. Third, projects that are unnecessary and excessive should be avoided. Fourth, do not increase social welfare spending. Over the past 10 years, the social welfare budget has expanded from NT$279.8 billion to NT$423.7 billion, obviously crowding out the budget for public construction and economic development. (Editorial abstract -- June 18, 2015) (By Y.F. Low)


Updated : 2021-09-25 08:25 GMT+08:00